Comments on: Earnings season coming

By: Vipul

Vipul — Wed, 01 Jul 2009 20:25:36 +0000

As I posted in the innocent frauds thread:

US Constitution:
Section 10 – Powers prohibited of States

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Missouri tried this very thing back in 1830! The Supreme Court ruled it unconstitutional:

http://www.blackwellreference.com/public/tocnode?id=g9781577180999_chunk_g97815771809995_ss1-316

http://press-pubs.uchicago.edu/founders/documents/a1_10_1s21.html

But the Supreme Court reversed itself in 1837 (After Chief Justice Marshall died)

http://www.answers.com/topic/briscoe-v-bank-of-the-commonwealth-of-kentucky

The key difference was Kentucky created a state bank, and then used its notes instead of directly issuing them itself. So for California to do this legally, it would first need to create a State Bank of California.

Not sure how the federal income tax issue would be dealt with, since there was no income tax in 1837.

By: warren mosler

warren mosler — Wed, 01 Jul 2009 16:56:54 +0000

there are a few complications

i’d just call them tax credits if they go that route

still the issue of whether fed income taxes are due on cal tax credit income.

By: Jim Baird

Jim Baird — Wed, 01 Jul 2009 11:40:26 +0000

Bill Mitchell has a pretty good analysis of the CA IOUs here:

http://bilbo.economicoutlook.net/blog/?p=3145

By: zanon

zanon — Wed, 01 Jul 2009 03:49:12 +0000

California may go the IOU route. If that works out, I guess it settles the argument over whether states can (should) issue their own currency.

By: Dave Begoka

Dave Begoka — Tue, 30 Jun 2009 23:06:45 +0000

Everybody I know is out of work or suffering major pay cuts!

Ebay sales are way down and i just heard a bunch of Health Care workers are getting the axe too.

By: Mike S

Mike S — Tue, 30 Jun 2009 22:20:15 +0000

Word at every company I’ve talked too is either that revenues are down but not much, or that they are doing well but are not hiring. I’ve talked with dozens of firms – or desks within banks – and many are scared but overworked.

By: warren mosler

warren mosler — Tue, 30 Jun 2009 21:52:34 +0000

agreed!

By: Jim Baird

Jim Baird — Tue, 30 Jun 2009 19:15:25 +0000

So, I’m wondering – what do you think of CA paying in IOUs? It could be a good thing, if they do it right (but it’s California, so they won’t…)

By: Art Cashin

Art Cashin — Tue, 30 Jun 2009 13:04:08 +0000

Art Cashin was just on CNBC, for the uninitiated, he is a 45 year veteran trader old wiseman. He said the bar is set SO LOW, lower than a limbo bar, that companies can’t help but to beat expectations. He said not to use that as a predictor though, because it would not be a good one going forward how healthy these companies are.

Phil Grande often talks about this SCAM that is pulled on the public of setting the earnings expectations so low, then when they beat the street by a penny, dumping that garbage on dumb sheeple investors. Phil often says recently they have set the bar about 2 feet under the ground, so how can you help but not to get over it? LOL!

Nothing has changed, the same old wall street crooks and tricks are still in play.

Warren you or no one else here has convinced me how with women stopping to have babies globally at the level they had them the past 50 years, how we keep our socieites and economies growing?

EDIT