Free Republic

The Unemployment Insurance (UI) trust fund the California Employment Development Department uses to pay benefits is now “structurally insolvent” a new Legislative Analyst’s Office report states. The report – a reaction to the “May Fund Forecast” released by the EDD last week states quite bluntly that the “temporary” – now about 15 years and not the six or seven years the EDD originally projected – federal surcharge will be used to cover on-going bills before actually paying the $18 billion-dollar federal debt the agency incurred due to gross incompetence during the pandemic.

Florida Gov. Ron DeSantis raised some questions Friday when he suggested that Citizens Property Insurance Corp., the state-created insurer, has “not been solvent” and may be unable to pay all claims from a major hurricane.The head-scratching comments came just hours before the Citizens board of governors voted to spend more than $170 million over the next three years on $500 million in reinsurance bonds.DeSantis made his statement at a news conference in Fort Myers, a city that took the brunt of Hurricane Ian last September, and where many homeowners are now complaining that they’ve received little or no payouts on...

You can call everyone for dinner, because our goose is cooked. We are so deep in debt that the only way we can keep the entire system from collapsing is to keep borrowing even more money. Perhaps you have been through a similar scenario with your own personal finances. When you simply do not have enough money to pay your bills, borrowing more money can seem like a really easy short-term solution. Unfortunately, the U.S. government has been doing this for decades, and now our national debt spiral has reached a terminal stage. Even if we gathered up all of...

I did some analysis on the Federal Reserve and it looks like a Fair Value on their Net Worth is now considerably less than NEGATIVE 1 trillion US dollars. This means that if there was a "run on the bank" with them like happened to Bear Stearns, Lehman Brothers, FTX, and many other entities throughout history then they'd come up over 1 trillion short in meeting their obligations. If my math is off then please provide your numbers along with justifications so it can be fairly scrutinized.

Politicians have been hiding the hard facts of Medicare for decades, and the American people will not like it when they learn the truth.The recently released Medicare trustees report estimates the program’s Part A trust fund faces insolvency in 2028, two years later than last year’s estimate. Some might think that represents a major improvement in the program’s fiscal position. But a fact-checker—at least a politically honest one—might say the 2028 projection lacks important context.In reality, Medicare faces a series of financial challenges, many of them created by fiscal gimmicks, that make the program’s shortfalls much greater than the “official”...

The onset of the Covid-19 pandemic prompted a financial emergency for many Americans living paycheck to paycheck. Two years later, a similar event would still wreck budgets, a poll finds. Programs to let workers save through employer-provided emergency savings accounts could encourage workers to set aside more cash for unforeseen events. When the Covid-19 pandemic hit, many Americans felt the financial shock of a sudden drop in income. If the same kind of event were to happen today, many people would still struggle financially, according to a poll conducted by the Bipartisan Policy Center, Funding Our Future coalition and Morning...

Chicago has a simple financial choice: Stay in frying pan or get in the fire. That in simple terms is what Moody's Investors Service said in a report today about the difficult options the Emanuel administration faces over the city's woefully underfunded pension funds. The city must cut spending and raise taxes now or the risks of becoming insolvent will grow, forcing even harsher decisions later. The credit rating agency offers a sobering reminder of what's at stake in the eight-page report, which focuses on the pensions problems. ... A CUT ABOVE JUNK. Moody's, typically the most conservative of the...

It's highly unlikely that Congress will reform Social Security any time soon. But there is a near-term cash crunch in one part of Social Security that lawmakers must resolve in the next year or two. The trust fund for Social Security disability benefits, which is separate from the fund for retirement benefits, is on track to be insolvent -- most likely by the end of 2016 but no later than 2017. So unless Congress acts to replenish the fund beforehand, the program will only be able to pay an estimated 80% of promised benefits to 8.8 million disabled workers, plus...

California's unemployment insurance trust fund is $8.5 billion in the red ...The state is able to continue to pay benefits thanks to a federal loan. But starting in September, California will have to start paying hundreds of millions of dollars in interest on that loan.... fund is chronically imbalanced and the deficit keeps growing. "11.1 billion by the end of 2011. We forecast a deficit of 12.7 billion by the end of 2012 if we still have no solution. So it's a situation that can no longer recover on its own, no matter how strong the economy rebounds."

Treasurer Bill Lockyer says Newt Gingrich proposal to let states file for bankruptcy "cynical" and "intended to incite panic"California Treasurer Bill Lockyer had a message this morning for former House Speaker Newt Gingrich, who on Friday announced that Republicans will be pursuing legislation that would allow states to file for bankruptcy: Back off. (And for the record, California is not the only state that had this response. Looks like the Golden State and the Lone Star state do agree on at least one thing.) "This is a cynical proposal intended to incite a panicked response to a phony crisis," he...

The fund that doles out cash benefits to Pennsylvanians who have lost their jobs has cushioned the effect of the recession for untold numbers of state residents, but it has been operating in the red for some time, and the bill is about to come due. Taken on its own, the Unemployment Compensation Trust Fund’s shortfall would represent a massive challenge. To shore it up, Pennsylvania has borrowed $3 billion since March 2009 from the federal government, and starting in January businesses will begin seeing higher taxes to help pay it back. But add to the picture the recession-caused falloff...

I've been going through The Fed's "data dump" that the WSJ has linked and made "easier" for us. And I've got lots of questions.Let's, for example, look at "Bank of Amer NA", otherwise known as BAC.They used the TAF a lot.  Here's a snapshot: Pay particular attention to that pink column I highlighted.Why?Well, BAC borrowed $15 billion an awful lot.  Maybe the same $15 billion.  Look at the face value of what they posted as collateral.$127 billion - or in one case $185 billion - to borrow $15 billion?What was being posted there - that's a more than 90% haircut!That's...

President Obama said Social Security is not in crisis and only modest changes are needed to keep it solvent. The president acknowledged at a small town hall gathering in Columbus, Ohio, Wednesday that the pension fund "has to be tweaked because the population is getting older" but said Republicans' plans to drastically overhaul the program are wrong. "Social Security is not in crisis," Obama said. "We're going to have to make some modest adjustments in order to strengthen it." Social Security has become a significant campaign issue during the August recess — Democrats have attacked the GOP,

If any CEO in the USA presented his board with a budget that was one-third unfunded, he would be fired and tossed out of the boardroom immediately. President Barack Obama recently revealed a $3 trillion budget that had a $1.6 trillion deficit. The maximum deficit presented to Congress prior to this president was approximately a half-trillion dollars (in George W. Bush’s last year, $700 billion of his deficit was a loan, resulting in a net deficit of $500 billion). Our president has made anemic gestures to reduce spending in his budget in certain non-discretionary areas. However, these are not to...

As Illinois' fiscal crisis deepens, the word "bankruptcy" is creeping more and more into the public discourse. "We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency," says Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago. "Bankruptcy is the reality that looms out there," Republican gubernatorial candidate Andrew McKenna Jr. says.

Experts Warn Of 'Deluge' Of Insolvencies To Come In The UKInsolvency experts have warned that there will be a "deluge" of business failures next year. Begbies Traynor said 134,000 business are currently showing "material signs of distress", although this is a fall on the 149,500 in the previous quarter. It said the UK was at the "midpoint of a 'W'- shaped recession, with a deluge of business failures likely in 2010". By Rupert Neate Published: 5:39PM BST 20 Oct 2009 Ric Traynor, executive chairman of Begbies Traynor, said: "The UK may be in the eye of the storm. The well-intentioned...

Following up on the quick mention now that I have a story to cite from Amherst: Cure rates for these distressed loans remain low. Amherst noted a near 0% cure rate of all loans in foreclosure, 0.8% for 90 plus days delinquent, 4.4% for 60 days delinquent and 26.5% for 30-day delinquencies. All told, Amherst expects 12.42% of units (from the 13.54% of properties delinquent and in foreclosure) to eventually liquidate. Let's put some numbers on this. There are roughly 125 million single-family homes in the US. Of those, roughly 30% have no mortgage on them at all. This leaves...

Failures in 2009 Already Outnumber 2008 Tally WASHINGTON -- Four banks failed Friday in Georgia, Michigan, California and Idaho as the financial crisis continued its grip on small lenders across the country. The Federal Deposit Insurance Corp. estimated the failures cost its deposit-insurance fund a combined $698.4 million. The fund is rapidly depleting and Congress is trying to pass legislation that would allow the FDIC to temporarily bolster it by borrowing up to $500 billion from the Treasury. ... The 29 failures in 2009 are four more than the 25 that collapsed in all of 2008. Five banks have failed...

4. Outright government takeover (call it nationalization or “receivership" if you don’t like the dirty N-word) of insolvent banks to be cleaned after takeover and then resold to the private sector. Of the four options the first three have serious flaws: in the bad bank model the government may overpay for the bad assets – at a high cost for the taxpayer - as the true value of them is uncertain; and if it does not overpay for the assets many banks are bust as the mark-to-market haircut they need to recognize is too large for them to bear.

THE RELEASE ...Of all the entitlement programs, Medicare is on the most dangerously unsustainable financial course, squeezed simultaneously by rising health-care costs and an aging population. When Congress passed the Medicare prescription drug bill four years ago, it included a mechanism designed to call attention to runaway spending in the health care program for seniors and the disabled. Medicare is funded by a combination of payroll taxes (hospital costs) and general revenue (doctor's visits and prescription drug costs). ... That alarm sounded for the first time last year and was repeated again last week. The second warning requires that the...