KeNo's Housing and Economic Portal: Saturday October 16 Housing and Economic stories

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Calif. budget plan relies on accounting maneuvers - (finance.yahoo.com) California lawmakers got their first look Wednesday at a proposal that attempts to end the state's record-long budget impasse and close a $19 billion deficit, primarily through targeted spending cuts and a large dose of creative accounting. The deal, reached late last week between Gov. Arnold Schwarzenegger and the four Republican and Democratic leaders of the Assembly and Senate, does not contain new taxes or fees. Instead, it relies on a series of assumptions and accounting maneuvers that in all likelihood will punt many of this year's budget problems to the next governor. It also includes a plan to create a stronger rainy day fund and some pension reforms, both demanded by Schwarzenegger as a condition for his signing any budget bill. The agreement targets new state employees by rolling back lucrative pension benefits granted 11 years ago and would end a practice in which government workers could boost their pensions by getting raises during their final year of service. The pension rollback would not apply to current employees. "We always said that there were no good (budget) solutions left, which is why the governor was so adamant about getting the reforms necessary to fix our system," said Schwarzenegger spokesman Aaron McLear. He said the cuts and reforms "will absolutely help future leaders of this state govern more efficiently."

Dim Outlook for Holiday Jobs - (www.nytimes.com) As the economy sputters, prospects are dimming for unemployed workers who were banking on a seasonal retail job to carry them through the holidays. After a disappointing back-to-school season, many retailers say they intend to barely increase their seasonal jobs from last year, when hiring was among the lowest in the 14 years tracked by the National Retail Federation. Some big national chains — like Wal-Mart and Best Buy — say they will not hire any more workers than last year. And even some of the more bullish retailers say the growth will not be significant. “It’s a slight increase, it’s not a huge increase,” said Jim Sluzewski, a spokesman at Macy’s, which expects to hire 65,000 seasonal workers. The recruiting firm Challenger, Gray & Christmas, forecasts that retailers will add up to 600,000 jobs in October, November and December, compared with a net gain of 501,400 holiday jobs over the same three months in 2009.

At Flagging Tribune, Tales of a Bankrupt Culture - (www.nytimes.com) In January 2008, soon after the venerable Tribune Company was sold for $8.2 billion, Randy Michaels, a new top executive, ran into several other senior colleagues at the InterContinental Hotel next to the Tribune Tower in Chicago. Mr. Michaels, a former radio executive and disc jockey, had been handpicked by Sam Zell, a billionaire who was the new controlling shareholder, to run much of the media company’s vast collection of properties, including The Chicago Tribune, The Los Angeles Times, WGN America and The Chicago Cubs. After Mr. Michaels arrived, according to two people at the bar that night, he sat down and said, “watch this,” and offered the waitress $100 to show him her breasts. The group sat dumbfounded. “Here was this guy, who was responsible for all these people, getting drunk in front of senior people and saying this to a waitress who many of us knew,” said one of the Tribune executives present, who declined to be identified because he had left the company and did not want to be quoted criticizing a former employer. “I have never seen anything like it.” Mr. Michaels, who otherwise declined to be interviewed, said through a spokesman, “I never made the comment allegedly attributed to me in January 2008 to a waitress at the InterContinental Hotel, and anyone who said I did so is either lying or mistaken.”

Illinois Pays More Than Mexico as States Sell Abroad - (www.bloomberg.com) Illinois capital-markets director John Sinsheimer and Citigroup Inc. bankers took a globe-girdling trip from the U.K. to China in June to persuade investors that the state’s $900 million of Build America Bonds were a bargain. The seven-country visit worked. The state sold one-fifth of the federally subsidized securities abroad the next month, tapping investors who are the fastest-growing source of borrowed cash for U.S. municipalities. Illinois, with the lowest credit rating of any state from Moody’s Investors Service, dangled yields higher than Mexico, which defaulted on debt in 1982, and Portugal, which costs more to insure against missed payments. “U.S. states are among the cheapest sovereign credits in the world,” said Patrick Brett, a Citigroup banker who marketed the Illinois securities overseas. “You’re actually picking up a good amount of spread for arguably better credits relative to equivalently rated corporates and sovereigns.”

The Republican Party, As We Know It, Is Dead - (www.businessinsider.com) Was listening to a radio commentator. He said, "The Republican Party was given up for dead, and yet here it is again.". He is right and wrong at the same time. The Republican Party as we knew it is dead. If it isn't, we are all in trouble. Since the Republicans have been ushered to the woodshed, changes have happened. Rick Santelli's rant on CNBC in March of 2009 touched off a movement that had been in undercurrents for a long time. The Tea Party has existed since at least the 1992 election. 19% if that vote went to Ross Perot. There is your Tea Party right there. Democrats were summarily defeated in 1994. Republicans ran on fiscal conservatism with a strong dose of conservative social values. They lost their way. The tea party listened to the Democrats in 2006 and their message of fiscal conservatism and transparency brought them to power again. Obama had the same message, unless he spoke at random to people like Joe the Plumber! But, given the extreme amount of debt the Democrats have piled up since 2006, they have lost all credibility. They will be defeated again.