HALF OF MUNI BONDS NOT REPORTING FINANCIALS

If you're holding municipal bonds, you probably won't know of any problems until it's too late.

The Wall Street Journal commissioned a study by DPC DATA, a specialist in municipal disclosure, to expose how poor the financial reporting is for municipalities. The report shows the problem has worsened since the company's previous 2008 study. Of the 17,000 bond issues studied, more than 56% filed no financial statements in at least one year between 2005 and 2009. More than one-third skipped three or more years (up from 40% in 2008).

As Peter Schmitt, CEO of DPC DATA, puts it, "This works out to insufficient ongoing disclosure information for more than $2 trillion of the $3 trillion in outstanding bonds."

The analysts and brokers saying the municipal bond crisis is nothing to worry about probably aren't basing that opinion on fact. Hardly any financials are available. And when the public borrowers do file financial records, the documents are "often so confusing or spotty that even professionals can't make sense of them."

Here are a few examples from the WSJ article:

The Clay Gas and Utility District of Clay County, Tennessee, didn't file disclosures for 10 years, until one in November saying it didn't expect to make future payments.

Helen Kirkpatrick, a retired journalist in Chevy Chase, Maryland, spent $25,000 10 years ago on Maryland Health and Higher Education bonds. She said she checked regularly for updates online and didn't see anything amiss. But then in October, she was stunned to get a letter from a broker offering 50 cents on the dollar. The letter said the issuer could not promise to pay more in the future. She searched for information and found none and couldn't reach the issuer. Confused, she took the deal.

Chowchilla, California, defaulted on its bonds used to renovate city hall earlier this month. The city, which bills itself the "Gateway to Prosperity," had never filed documents notifying investors that a default was coming. The city's most-recent financial statement currently on file is for the fiscal year ending in June 2009.

Man Breaks In Courthouse, Raids Mental Health Services

Sean McGuire Stripped, Tore Up The Office, Peed Over Rotunda Balcony

Waco – When newly elected DA Abel Reyna hit his office at the McLennan County Courthouse about noon on Sunday, he could hear a burglar alarm ringing - somewhere.

Mr. Reyna first found a pile of clothing, a wristwatch draped over it, on the rotunda balcony, then noticed a puddle of urine on the first floor,

Sean McGuire, a 35-year-old transient, had broken in the glass door of the second floor, situated at the top of the steep stone staircase on Columbus Ave., then burglarized and vandalized the Mental Health Court Services office.

He tore up computers, smashed scanners, overturned files, then blithely strolled out to the rotunda and urinated over the balcony, sending the stream cascading down to the floor below.

He broke in at 5 a.m. He had been there 7 hours before Mr. Reyna arrived.

No one heard the alarm.

It's not hooked up to an automatic telephone system that summons law enforcement uniformed officers in case of emergencies such as burglary or fire.

So, it was up to the State of Texas' Chief Law Enforcement Officer in the jurisdiction, the District Attorney, Abel Reyna, to apprehend the burglar. He had only by chance visited the courthouse to catch up on some office work.

Mr. Reyna summoned officers, who found Mr. McGuire urinating, once again, in a public place, this time outside the building.

Police charged him with disorderly conduct and burglary.

Before the Commissioners' Court will be able to order a newer, more efficient burglary alarm system, they will first have to seek the approval of the local historical commission.

Social Security To Run Deficit of $45 Billion This Year

Congressional Budget Office says trust fund will be drained by 2037

Washington – Unless Congress acts to shore up the system, the Social Security Trust fund will be drained much earlier than originally projected. Congressional Budget Office revised its estimate to show permanent annual deficits beginning this year.

The system will pay out $45 billion more this year than it takes in through payroll taxes. Previously, the accounting office showed no such permanent deficits until 2016

Economists blamed a weak economy, lagging payroll taxes and an increased number of applications for the benefits, added to an increased number of baby boomers taking retirement.

Willie's Place Bankrupt - Trustee Appoints New Operator

From the time I could walk, he'd take me with him
to this old place called the Green Frog Cafe.
There were old men there with beer guts and dominos
lyin' about their lives while they played.

I was just a kid, but they all called me sidekick,
like desperados waiting for a train, desperados waiting for a train.

Carl's Corner - The owners of Willie's Place, named after legendary country singer and Abbott native Willie Nelson, will close for business on January 31st.

Featuring a gas station and truck stop, convenience store, restaurant, theater, and saloon, the 15-acre complex was operated by WN Truck Stop, Inc., LLC..

The problems started when they couldn't find a bank to help them refinance a loan, estimated to be the the $5 to $6 million range.
In May 2010, an attorney for a New Jersey based lender filed a foreclosure suit. According to the Hill County Clerk's Office, the foreclosure suit was filed on April 12th.

Oh, well, the old boy tried to open a filling station with a show room and a saloon out on the old Bobbit Ranch at Mountain Springs. It didn't work out too good, but that's the way the mop flops.

Oh, I could tell y'all about a place called Mountain Springs. It's out on the Old Dallas Highway, the one y'all don't know anything about. Cuts across the top of the mountain where there's fresh water, springs, plenty of wild hogs, deer, everything.

I could tell y'all about the Green Frog Cafe and some people who came from Tennessee after that Civil War, how they got to farming out there.

I could tell you about Maude and how she would have one of her girls drive her out there from the Dark Mansion in the Model A, way back, during the Depression, and have a cold drink and listen to them pick those guitars and everything. I could tell you all about that.

I could tell you all that stuff, but you wouldn't believe me. You'd just think I'm another old man with a beer gut and dominoes, lying about my life while I played.

But if y'all go out there, you're gonna see them green frogs a'danicin' on top of old Carl's place, now. Count on that, y'all.

Play, dawg.

And I said that.
- The Legendary

GOP v. Central Texas Tea Party: Infighting In Bell County

Belton – When April 15 rolls around, the Tea Party won't be allowed to participate in the GOP victory lap in this distinguished old cotton town in the rich blackland bottoms of the Lampassas River and Cowhouse Creek.

A funny thing happened to the outfit on their way to the Bell County Expo Center in making preparations for the by-now traditional Tea Party Tax Day rally.

The “establishment” Republican Party snookered the upstarts, according to the tribe's chief, West Point grad Wes Riddle, chairman of the Central Texas Tea Party, unsuccessful congressional candidate, and author of the daily political blog, “Horse Sense.”

Here's how it shaped up, and it's just the latest episode in a long-standing feud between the Tea Party and the firstest with the mostest old-line GOP types.

Mr. Riddle told Tea Partiers all about it last night at his downtown Beltonian Theater.

It's a newly remodeled downtown picture show with loge seating, tables at every row, and a full menu of snacks, beer and wine to go with the movies. Nifty place. European in its décor and ambience.

In a classic exercise in creating confusion, GOP stalwarts organized as the Bell County Conservative Club announced an April 15 rally the day after the Tea Party announced a Tax Day for the 16th.

When the Tea Party approached them in the spirit of unity, they acquiesced and the two organizations made plans to share the arena at the Bell County Expo Center on the 15th, but then, an even funnier thing happened.

Except no one is laughing.

There has been a change in plans. The speakers who were originally scheduled to appear at the Tea Party rally will not be allowed to participate in the April 15th Tax Day celebration.

Cute.

“What's going on here is an out-and-out attempt to co-opt the Tea Party,” Mr. Riddle said.

After “They spread the rumor that we seized the Tea Party from (Bell County co-founder) Judy Brady,” the GOP hierarchy made various bids to create further confusion in the minds of the public by “making the Tea Party the target of an organized Republican challenge.”

Nevertheless, the two-year-old organization has scheduled a full round of speakers and seminars to educate voters on the finer points of redistricting the state's Congressional seats according to the 2010 Census. A full discussion of the particulars may be found at www.centraltexasteaparty.com


“This is not what the Republican Party wants to see,” Wes Riddle stated, to scattered applause, even some laughter.

The original Tea Party mailing list was a copy of e-mail addresses gleaned from Republican Party records before the organization began its last Tuesday evening of the month get-togethers at libraries and classrooms, the theater and other venues for educational programs, speakers and political rallies. They quickly built their own new database and membership roster. It's a Tea Party now, not just an adjunct of the Republican Party.

Number one Tea Party priority: Oust Obama in 2012.

“We are an independent conservative American voice.”

The Tea Party is predicting a court challenge to each evolution of the Legislature's redistricting process.

“By July 4th, we should know where the new boundary lines will be drawn.”

They'll be waiting and ready in Belton, it appears.

Though he was a novice in the latest go-round, Mr. Riddle got his share of experience with dirty tricks from his own party, the party of Lincoln.

Two unhappy events shaped his ill-fated 2010 campaign for House Of Representatives.

1. The Republican Party “sent a staffer down to say” if he didn't quit his primary race, he would never have a future in the Republican Party of Texas.

2. His campaign manager was an individual from Williamson County who was told that if he didn't quit, he would never get political work in Williamson County again, and would probably never get any other business off the ground in that county, either.
“I don't want to always be the Chairman of the Central Texas Tea Party,” he concluded. Soon, the Party will adopt new by-laws and restructure its executive committee. “Then they can vote the rascals out if they want to.”

The crowd thinned out immediately when the lights went down to air President Barack Hussein Obama's State of the Union Speech, which was simulcast on the theater's screen. Eventually, the Beltonian will become a center for corporate meetings and presentations.

The President held forth for 62 minutes, was interrupted by standing ovations 82 times, and succeeded in underwhelming the Chiefs of Staff of the Army, Navy and Marines when he bragged that “for the first time in history,” people who love their country enough to defend it won't be discriminated against “because of who they love.”

While the politicians stood and applauded this hyperbolic celebration of the end of “Don't Ask, Don't Tell” in the case of gays and lesbians serving on active duty, the generals and admirals sat, stone-faced and stolid, unsmiling, eschewing all signs of applause.

They won't happy, as they say back in old Virginny, Arlington, that is.

The sparse crowd in the theater was similarly unmoved by the President's braggadocio claims that “The stock market has come roaring back,” and when he said of the economic troubles and joblessness of the nation's work force, “This is our generation's Sputnik.”

Response, in contrast to the wild applause and repeatedly enthusiastic ovations given the President by the professional politicians on the screen, was as flat as yesterday's Dr. Pepper left out overnight on a hot summer patio, complete with soggy cigarette butts and the odd fly and moth and mosquito carcasses.

Derisive snorts and snickers greeted his pronouncement that “The rules have changed!” and it was all the Vice President and Speaker of the House could do to hide their embarrassment and disgust as the President plodded through the fodder of his uncouth remarks about medical malpractice reform and the “need to take on challenges that have been decades in the making.”

People yawned at the promise that there will be 1 million electric vehicles on the road by 2050 and that by 2985, 80 percent of America's electricity will come from solar power.

Hostile remarks greeted the President's announcement that No Child Left Behind will be replaced with Race To The Top in the field of education.

When the Fox News network commentator abruptly announced, in a rather rude tone of voice, “That was President Obama's State of the Union Address!” the thin crowd lurched to its feet and fled the theater, clearly embarrassed to have witnessed the sorry spectacle.

This Tea Party got gritty and rolled up its sleeves, suddenly appalled by the low rent spectacle of a nation in trouble with its befuddled executive leadership and lopsided Congressional balance of power.

It's going to be a long decade.

Cheerio.

Read my lips, and other words to that effect.

“Operation Gunrunner” Nets ATF 17 Arrests – IG Criticism

Draft report cites “significant weaknesses” in agency's intelligence, gun sales reporting system

Phoenix – Top federal gun cops announced 17 arrests following a 53-count indictment of area gun runners accused of making straw purchases of more than 700 firearms such as AK-47 assault rifles and shipping them to Mexico – often as many as 40 at a time. The indictment also details the purchase of “cop killer” 5.7 mm handguns that shoot projectiles able to pierce body armor.

Authorities are seeking an additional 3 named in the indictments.

At the same time, the U.S. Attorney and a draft report of the Justice Department's Office of the Inspector General leveled harsh criticism at the agency for its lack of reporting of multiple gun sales from the region's 8,500 gun dealers spread out across Arizona, California, New Mexico and Texas.

“From our perspective...you have this incongruity in the law, where for handguns there's a reporting requirement for multiple purchases, but for long guns...no. There no sense to that. It's arbitrary,” said Dennis K. Burke, U.S. Attorney for the Southern District of Arizona.

In the IG report, the inspectors wrote, “We found that ATF does not systematically exchange intelligence with its Mexican and some U.S. partner agencies. In addition, some ATF field agents reported that they do not find investigative leads provided to them by ATF's Field Intelligence Groups to be timely and usable. We also determined that intelligence personnel in ATF's Southwest border field divisions do not routinely share firearms trafficking intelligence with each other. ATF could better implement its Border Liaison Program to improve information sharing and coordination between its U.S. and its Mexico personnel.”

Last week, fed-up ATF field agents operating in Mexico came forward with confidential information for Senate Judiciary Committee staffers, seeking whistleblower status in exchange for their testimony about top ATF officials approving “Operation Gunwalker.” In this alleged scheme, they say, guns under ATF control have been smuggled across the Mexican border to “pad” the record.

Some reports allege that the gun used to kill Border Patrolman Brian Terry was one such.

It's all part of an ongoing hassle with Senate Judiciary Committee members over an NRA-backed bill titled “Reform and Modernization Act” that would oppose an emergency ruling requiring the reporting sales of 2 or more semiautomatic rifles with detachable magazines to the same person within any 5-day period.

Brady Campaign Against Gun Violence operatives have also criticized the Obama Administration's lack of enforcement of gun sales laws and blame the perceived lax treatment for the deaths of some 34,000 people inside Mexico during the past 4 years of the Felipe Calderon Administration's war on drug traffickers.

The Obama Administration has failed to nominate a permanent director of ATF for consideration by the Senate.

Said Department of Homeland Security Director Janet Napolitano, “With respect to not having a permanent head of ATF, that issue has not been raised to me as an issue – of course ATF is not in DHS, it's one of the departments that isn't.” She added that ATF is a partner with DHS in “some areas.”

Secretary of State Hillary Rodham Clinton is on record blaming Texas and Arizona gun dealers for the firearms violence south of the border. She met with President Calderon Foreign Minister Patricia Espinosa in Mexico yesterday afternoon.

Dollar's Decline - Money Changers Urge Diversification

U.S. Dollars are just a whisper away from losing a century's status as the world's reserve currency.

What's more, under federal coinage law, there is no legal barrier to the creation of alternative currencies within the borders of the nation. None.

Personal money managers are urging people to place their assets beyond government control, to invest in precious metals and investment assets you don't have to report.

Strong talk, but it makes sense. Why?

Because the government could easily seize control of banks, 401K retirement accounts, pension funds, and securities should the dollar lose its status as the premier currency requiring no exchange rating, money managers are cautioning an economic crash that would dwarf the debacle of 2008.

All the executive orders are in place to seize communications, manufacturing, transportation, fuel, groceries and manpower and bring them under emergency executive control.

How would it take place?

Should the OPEC nations refuse to increase production and the U.S. government continue to block development of petroleum refinement capacity because of environmental regulation, the U.S. dollar would come under huge pressure. The Federal Reserve would be forced to increase the money supply, thereby devaluing the basic unit of currency.

If the Treasury's foreign creditors such as China, which never brings dollars back into their economy, but invests them in the deepest, most liquid pool available, the Treasury Bond market to keep their value as high as possible, should call their debts, the U.S. Treasury would be deep in the dip.

About 150 alternative currencies are presently used in the U.S., including privately backed certificates issued by banks and merchants, Yen, Yuan, Euros, Swiss Francs and a new currency called the khaleeji, or “of the Gulf”, or the karam, which means “generosity,” scheduled to be released soon by the Gulf Cooperation Council.

It's a coalition of petroleum-producing states in the Persian Gulf region, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. With a gross domestic product growth rate gauged by the IMF from $717.8 billion in 2006 to a predicted $1,212,112 billion for 2009, the region is an economic powerhouse, to say the least.

Yemen wants in, but the top dogs such as Qatar resist full membership for the desert republic. The United Arab Republic is out, but Iraq is a strong prospect for membership. So it goes.

The United States' unfavorable balance of foreign trade in manufactured items and components, clothing, tools, appliances, textiles – the works - could easily persuade top exporting countries that presently prop up the dollar's worth by buying into Treasury bonds flying the coop for greener pastures overseas.

The cascade would be spectacular to behold as it falls from its dizzying heights of trillions stacked upon trillions.

Meanwhile, America continues to export its mineral wealth in the form of coal, which the Chinese liquify and hoard against the prospect of the inevitable energy crunch to come.

The equivalent of a gallon of gasoline in liquefied coal fuel is said to have a carbon footprint about 18 times that of gasoline.

There isn't much chance the Chinese are interested in the reduction of greenhouse gases or the greening of anything much besides their bank accounts.

Is there a way out?

Yes, but it's probably only a beginning. It won't be easy and it won't be attractive, but there are alternatives.

First, stop the government's hostility to business investment.

Restore the oil depletion tax allowance.

Allow the development of new refineries on full depreciation schedules to meet the increased demand for hydrocarbon fuels.

Erect new and reasonable trade barriers that will require manufacturers to produce their goods on American shores using American workers.

Painful?

You bet, but it's nowhere near as painful as watching kids starve or having to keep an armed guard over your home, larder and gardens.

By the way, did Lindsay Lohan ever get out of rehab? Or what?