Saturday, August 4, 2012

California Bet 2% Of Its Budget On Facebook's Stock Price Remaining High

Here's a great example of why California is teetering on the edge of bankruptcy and will likely end up in bankruptcy a few years out.

The state is running its budget like an out of control gambler.

The state's projection for 2012 revenues is $91.3 billion, but that was made on the assumption that Facebook insider sales would bring in $1.9 billion in tax revenue. With the price of Facebook stock collapsing, tax revenues from Facebook stock sales are not going to come anywhere close to projections.

Thus, another leaky hole in the states projected revenue stream. Either, Bernanke starts printing very aggressively, which will allow states like California to pay off their debt in cheap dollars (which will of course be price inflationary for all of us) or states like California are going to have to default. Illinois will probably be first.


  1. Fucking inept financial MORONS!

  2. How long before California or Illinois fail to make retirement payments? Other states?

  3. Never count your chickens before they hatch.

  4. Is California teetering on the edge of bankruptcy or is it just more political theater to cover government fraud?

    Anyone familiar with California's CAFR would question the claim that we, I live in Ca., are $15.7 billion in debt. Other's have researched the state's CAFR (Comprehensive Annual Financial Report) and wonder why it shows $577 billion in investment fund balances that aren’t being reported by the California State Government on its budget report. Is Governor Brown lying? Is this truly a case of fraud through omission? Are these funds actually sitting idle and the politicians staying mum?

    I want an answer.

    My info has come from links included here:

    All economists should be taking a hard look at this and explain what's going on to the dummies like me.