Mish's Global Economic Trend Analysis

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• Obama Admits Democrats Could Lose House Majority
• Why New York City (and NYC Taxpayers) are Broke
• Sunday Funnies 2010-07-11: Shared Sacrifice, How Not to Find a Good Book; Unusual Things that Benefit the New Zealand Dollar

Obama Admits Democrats Could Lose House Majority Posted: 11 Jul 2010 06:42 PM PDT I have some excellent news in this bleary economic news environment: Obama's chief spokesman says Dems could lose House majority. President Barack Obama's party could lose its House majority in this fall's elections, his spokesman said Sunday, perhaps trying to jolt Democratic voters with the specter of GOP lawmakers rolling back White House policies. "I think there's no doubt there are enough seats in play that could cause Republicans to gain control. There's no doubt about that," press secretary Robert Gibbs told NBC's "Meet the Press." Democrats now hold a 255-178 edge in the House, with two vacancies in the 435-member chamber. Anywhere from 40 to perhaps 60 House seats could be competitive by the fall. Republicans would need to take back about 40 seats to slip into the majority, placing the current GOP leader, Ohio Rep. John Boehner, in line to replace Rep. Nancy Pelosi, D-Calif., as speaker. Gibbs said retaining House control would depend on strong campaigns by Democrats. "I think we have to take the issues to them," he said, adding that the primary argument would be how Republicans would govern as the majority party. His remarks could be intended to light a fire under Democrats who are dispirited after about 18 months of Obama's presidency and motivate them to work hard to maintain their majorities in both the House and Senate. The party in power typically loses seats in the first midterm elections under a president, and Democrats are defending a slew of districts they picked up in 2006 and 2008. The White House also could be working to lower expectations in case Democrats do lose the House majority. I am not sure what angle the president is playing but I suspect both lowering expectations while hoping to light a fire with Democrats. However, if any fire is lit, it will be for energized Republican to get out the vote and stop the Obama administration insanity. Last week I placed mental odds of about 60-40 the Republican take the House based on economic conditions that in my estimation are clearly getting worse and will stay that way for some time. Regardless, here is the really good news .... Whether or not Republicans take control of the House, Democrats are guaranteed to lose enough seats in the House and Senate to make the administration's socialist policies dead on arrival in the next Congress. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Why New York City (and NYC Taxpayers) are Broke Posted: 11 Jul 2010 11:13 AM PDT Public pensions and public union benefits are increasingly under attack in the media, and justifiably so. Here is a case in point regarding NYC. Please consider City taxpayers foot 90% of municipal pensions. Taxpayers kick in an average $8.60 for every dollar that city employees contribute to their pensions, a sweet deal costing the Big Apple a bundle. Taxpayers' share of city pension costs has skyrocketed more than 900 percent in the last decade -- from $703.1 million in 2000 to $6.5 billion in 2009, according to the city comptroller's annual reports. The cost is expected to hit $7.6 billion this fiscal year and $8.7 billion next year. Teachers get the biggest bang for their pension contributions -- the city puts in $15.50 for every $1 they contribute. Taxpayers pay $10 for every $1 firefighters put in, $9 for every $1 from cops and $5.60 for every $1 from transit, sanitation and other civil servants, the 2009 report shows. TEACHERS Average pension: $54,268 Taxpayer contribution: $15.50 to $1 FIREFIGHTERS Average pension: $53,347 Taxpayer contribution: $10 to $1 POLICE Average pension: $41,319 Taxpayer contribution: $9.13 to $1 SANITATION, TRANSIT, OTHER Average pension: $24,889 Taxpayer contribution: $5.60 to $1 "The cost has risen because employee benefits were dramatically increased in 2000, just as the [stock] market began to collapse," said John Murphy, former executive director of the New York City Employee Retirement System, NYCERS, the largest city pension fund. "In retrospect, it was one of the most irresponsible things to have done," he said. Amazingly, unions have the gall to demand still more benefits at a time the private sector and ordinary taxpayers are getting hammered. The article appears to be about NYC. It's not. It's about every public union in the country. Also consider Padded Pensions and What to do About Them It's what the system promised, said Mr. Tassone, now 47, adding that he did nothing wrong by adding lots of overtime to his base pay shortly before retiring. "I don't understand how the working guy that held up their end of the bargain became the problem," he said. "The working guy that held up their end of the bargain" Yeah right. This is what the bargain looks like. Public union greed and arrogance is off the scale everywhere, as they perpetually bitch and whine and moan about how much they are contributing (and about everything else, too). The only solution is to privatize everything, totally eliminating public unions along with their greed and arrogance. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Sunday Funnies 2010-07-11: Shared Sacrifice, How Not to Find a Good Book; Unusual Things that Benefit the New Zealand Dollar Posted: 11 Jul 2010 09:49 AM PDT Shared Sacrifice Looking for a good book? If so make sure you go to the right book store, not the Wong Fook Hing Book Store Numerous references to the above. I am not sure who to credit. JayWalking with Jay Leno http://www.youtube.com/watch?v=RkQ6XgXeNuY&feature=youtu.be If that does not say something about education in the US, what does? Things that Benefit the New Zealand Dollar Yahoo!Finance reports something I did not realize: New Zealand Dollar Benefits From S*** in Market Sentiment Sadly, the above document has now expired for inexplicable reasons. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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