Citizen’s Federal Tax Dollars Are Already Bailing Out State Governments The amount of federal tax dollars that flow to s...

Citizen’s Federal Tax Dollars Are Already Bailing Out State Governments The amount of federal tax dollars that flow to states including their governments is a stunning amount even before the various stimuli dispersions. Food Stamps, Temporary Assistance for Needy Families, Medicaid, Medicare and a host of other federal programs send massive amounts of funding to states. Direct disbursements to states even without the influx of stimuli funds can be a huge part of the state g...

from Citizen’s Federal Tax Dollars Are Already Bailing Out State Governments The amount of federal tax dollars that flow to s...

As new data comes in we find out some things most already suspected on the CoVid crisis. 1) NYC and the surrounding area...

As new data comes in we find out some things most already suspected on the CoVid crisis. 1) NYC and the surrounding areas outbreak was made worse by a reduction in the schedule of their mass transit system which created a crowded environment. No doubt the dark and dank environment of the NYC subway system provided the perfect environment for the virus to stay active on inert surfaces. 2) Nursing home residents have been the hardest hit. In Iowa 50 percent of the deaths and... in the most populous county in Kansas it is a whopping 70 percent. 3) Several studies now point to a fatality rate more consistent with the flu but as a much more contagious virus those fatalities have been incurred over a shorter time span. 4) The economic crisis created by our leader's reactions will be much longer lasting than the virus. A host of oil companies have or will be filing bankruptcy, estimates as high as 50 percent of all non-chain owned restaurants will never re-open, some old classics like Nieman Marcus and J. C. Penny are in bankruptcy, roughly $300 billion of corporate debt may go into default putting pension systems and retirement accounts in peril and ---in my opinion a factor that is impossible to calculate but really important---a huge number of start-ups will be lost due to the leverage and lack of cash flow those entities usually have. As in life every bad thing that happens to you can be a learning experience and let us hope that we learned that next time we identify at risk groups earlier and let everyone else practice individual responsibility.

from As new data comes in we find out some things most already suspected on the CoVid crisis. 1) NYC and the surrounding area...

A little logical though on why business and the general public can't cede the country to the medical profession. 1) The...

A little logical though on why business and the general public can't cede the country to the medical profession. 1) The medical profession has some extremely admirable goals with the primary one being limiting the loss of life. Admirable but at some point counterproductive. How could I say such a horrible thing? Take this to its logical extreme---we take every resource of the country and focus it simply on saving lives. Now the only jobs are those supporting this goal a...nd every dollar is spent for the same. Mankind's only advancement becomes prolonging life. It will not take long before we discover that the quality of life has deteriorated to the point that life may not be all that worth living. 2) They have not shown us that they can: 1) produce a model that actually predicts morbidity and 2) for all the money thrown at cancer it and many long time nemesis of man still kill millions worldwide. No the medical community is not full of near 'gods' at all and while we may admire them they are not who we want running our country. China is the great Satan here but I will argue that listening to the medical 'experts' on how to deal with what China unleashed on us has created a scenario that will send the world into a great recession if not depression. The damage done economically will certainly send us into a recession but it may be far worse for the poor on this globe. Energy and agriculture are key industries for the survival of man. Both of those areas of the developed world's economy have been damaged severely. The developing and poor nations of the world depend on the largess of the developed world to avoid famine and pestilence. Unless something changes dramatically AND quickly that assistance will not be available in the quantities it has been prior to this for those most needing it. No I am afraid that the "hiding in place" that the Fauci Fear Train scared this country into will kill far more than it ever saved. Just a heads up from one of those in the high risk categories i.e. elderly; if you planned to live forever there always has been some serious flaws in your plan.

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The people I feel for in this oil price crash is not the speculators in the put and call world holding options on margin...

The people I feel for in this oil price crash is not the speculators in the put and call world holding options on margins. It is the little drillers and producers---and in the long run the consumers of energy. Drilling operations are being crushed by the price and the huge fall off in demand both world wide and in the US. Unit Drilling a long time stalwart out of Tulsa filed for bankruptcy this week. For decades they were a entity I played on the market due to their sh...rewd management reputation. That is how bad this hit is on the drillers. I have heard any of them with debt are already talking to bankruptcy attorneys about the best avenue. Producers are in their own conundrum. You can't shut a well in and just open it up. Some of the zones you have to be careful about even the concept of limiting production or they will close up. With no storage capacity or limited at best you can produce only so much before you have a hard choice. I think some misinterpreted my thought on allowing the private sector to store in the strategic reserve with a maximum price they would have to begin selling at as a "take care of the industry concept". Actually it is the consumers of energy---both industry and individuals---who are the biggest beneficiaries. If you force their stored reserves to be liquidated at $50 bbl it will put a cap on energy prices. The other alternative will be that the oil producers will be devastated and end up shutting in wells so there will be very limited capacity for supply to meet demand at some point. We have seen that in the past when oil ran up to a $100 bbl and the per pump price exceeded $4 a gallon.

from The people I feel for in this oil price crash is not the speculators in the put and call world holding options on margin...

What one hopes Oklahoma's Governor realizes is that there is opportunity here even as the current economy in Oklahoma is...

What one hopes Oklahoma's Governor realizes is that there is opportunity here even as the current economy in Oklahoma is being devastated. I won't mention Kansas in this equation as Governor Kelly is not only without any business experience I genuinely believe she dislikes the private sector. Cheap energy should be the mantra he pushes with every industry, manufacturing plant and agricultural processing plant that might be thinking about relocating. A special pitch toward...s those industries that might be coming back from overseas would be a good place to start. Even without the CoVid this should have been his mantra on economic development with the abundant natural gas supplies. Natural gas's pipeline cost to deliver any distance has been a limiting factor on its usage and price. Bring the industry to the supply is the solution and that is a winner for all involved. Yet Oklahoma has not been able to capitalize on their price advantage. Now the idea of moving HQ and operations to a more 'rural' setting may have appeal to their workforce that it did not have prior to the CoVid. A good place to start on oil/gas would be to soften some of his image with the tribes by working with them to bring refineries and LNG plants to Oklahoma. The tribes can fast track refinery building---the last new refineries built have all been on tribal land---and the end market opportunities are huge. Port of Catoosa as a shipping point for a strategically located LNG plant on tribal land would be HUGE for the gas industry. A jet fuel refinery could be a win for OKC and Tulsa airports. Let us see if he can capitalize on the opportunity.

from What one hopes Oklahoma's Governor realizes is that there is opportunity here even as the current economy in Oklahoma is...

I hope someone in the White House proposes a more free market approach to the oil price free fall. Here is my idea. I ...

I hope someone in the White House proposes a more free market approach to the oil price free fall. Here is my idea. I do think a strategic reserve has some appeal BUT I think a sounder idea would be to let the private sector use it as storage. Charge a small fee i.e. a percentage of realized profits when the price comes back up based on some reasonable price level. Say $20 BbL and then fix a price they must start selling at---say $50 Bbl. Only fully American owned compan...ies should be given this option and not BPS, EXXON etc. Who gets allocation of storage capacity should be based on 'bids' over that fixed price with the concept that all charges are put off into the future. The oil companies will not be made whole by this since they are forgoing current revenues for future revenues. Even with that only those with the cash flow to weather this or ability to reduce their "burn rate" would likely make it. Although possibly you could get loans or speculators to invest in your new ready to go reserves. The shake out will be painful on those who don't. However, we don't crater the whole industry and threaten US energy independence. Not being dependent on the Middle East and Russia for oil should be a standard American defense strategy. Consider the effect on other energy dependent industry and the consumer. If we allow a free fall collapse there will be a period where demand is restored but will have to wait for supply to catch up with it. Once you shut in a well you just can't reopen it. Normally I am for a totally free market but this abnormal event creates the need for abnormal approaches. The consumer---and industry--- will get whipsawed by the effect beyond any normal market adjustment. If you allow the companies to store and then to sell when it hits a certain price you will take much of the dip and rise out of the oil market. Reasonably stable energy prices will do more for a full economy than any other single thing they can do. A big plus is it has no cost to the taxpayer unlike buying for the strategic reserve.

from I hope someone in the White House proposes a more free market approach to the oil price free fall. Here is my idea. I ...

I have been involved in crisis budgeting at the state level a few times and in my private business life when my oil comp...

I have been involved in crisis budgeting at the state level a few times and in my private business life when my oil company was wiped out in the 80's oil bust. I will say just offhand the government is much better structured to handle a crisis but for all the wrong reasons. Here would be my short list for both Kansas and Oklahoma: 1) Stop the direct payments to the OTRS and KPERS for one year. It is about $300 M to OTRS and $400 M to KPERS. The present value of a dollar... calculation makes this palatable fiscally. 2) Delay capital improvement projects across the board INCLUDING road and bridges unless they are in critical condition. Remove the revenues from anything but fuel taxes and direct federal payments. This will give the states several hundred million to work with---more in Kansas's situation than Oklahoma's but still sizable. 3) A voluntary buy out of older employees to reduce the costs of operation without harming those older employees. The structure is reasonably easy to design. Point it at 65 and older since they will qualify immediately for Medicare thus not putting them at risk health wise and not forcing the state to pay their health costs (one of the usual techniques). A simple five years of additional 'service' which amounts to a 10% increase in retirement for most of those long term workers. Once it again it is a present value of the dollar calculation and sadly an actuarial as many will die before they collect much of that 10%. However it is a fair deal for both sides as these are the higher salaried workers in general. 4) Review EVERY program and reduce or stop funding the ones that are feel good or special interest only. This is tougher than it sounds as every group will claim their "feed bucket" is essential. Legislators need to put those lobbying them in the public domain so voters can decide come this falls elections. 5) Review the Tax Expenditure report in both states to look at credits, deductions and just plain giveaways. Any that do not generate a net positive revenue or at least break even should be considered for the chopping block. If you really did all the above we are talking over a billion dollars easily. Let us see how much grit the legislatures and governors have.

from I have been involved in crisis budgeting at the state level a few times and in my private business life when my oil comp...

State, city and county budgets in oil producing states will now take a double hit. However, I hope our Governors and Ma...

State, city and county budgets in oil producing states will now take a double hit. However, I hope our Governors and Mayors understand that their citizens are getting hit harder than they are---and I think they are in for a shock when they see their own revenues. There is a fix for state budgets---I have walked into a state with a $550 M shortfall with a negative ending balance of nearly $30 M and in 18 months had $700 M in ending balance---and I will put out a range of op...tions tomorrow for Oklahoma and Kansas legislators to consider. There are two things they can do right now: 1) open up every county with low or falling rates of new infections and ask the at risk to self isolate and 2) assure taxpayers that budgets going forward will NOT balance by raising taxes. Having been one of those who saw my own oil and gas company wiped out in the '80's bust I have a real sense of dread for the many people in the industry. They have acquired home mortgages and other debt just as every other person in our states and now in one quick move with no warning they are being wiped out. I know how it feels! One day I was walking on air and within a few months I was wondering how I would pay bills. However, I was lucky to not be leveraged and I saw many who were lose everything including their marriages. The fix for the states' budgets are not all that difficult and some of it has needed done. The good times have let the liberals swell the budgets with bad and/or inefficient programs and poor allocations of resources.

from State, city and county budgets in oil producing states will now take a double hit. However, I hope our Governors and Ma...

No surprise to any of us who looked at the phony models' assumptions that were used by WHO, the MSM and those in the var...

No surprise to any of us who looked at the phony models' assumptions that were used by WHO, the MSM and those in the various health bureaucracies who wanted their 15 minutes of fame. Many of us have have been saying what now is being backed by the data as it trickles in. Stanford University professor of medicine Dr. Jay Bhattacharya: "Per case, I don't think it's as deadly as people thought. The World Health Organization put an estimate out that was, I think, initially 3....4 percent. It's very unlikely it is anywhere near that. It's much more likely, much closer to the death rate that you see from the flu per case." How did these phony models shut down the country? There was two parts to this and neither party and their behavior are immune from participation in this debacle. First---and this is the norm for government---the states and federal government were largely unprepared even though they have known since SARs and were warned again in 2007 that another CoVid crisis was coming. Government, in general, reacts to a crisis instead of preparing for one. I, for one, was not at all surprised there was no emergency equipment for ICU back ups. Consider that even if they had put in place in 2003 after SARs the equipment to readily create multiples of current ICU beds that equipment would likely be 'dated' by now. Dollars for reoccurring replenishment of 'inert' items in any agency's budget would be tough to manage ESPECIALLY since bureaucracies like to spend their money on salaries for the bureaucrats. Second---and I suggest you always consider this with politicians---is there is no upside that justifies the risk of being wrong on these sort of crisis issues. If a politician had said what I have been saying all along had they been wrong and it was more deadly they would have been roasted and likely defeated in their re-election. Picture the "you killed my grandma" ads that would have been run by your opponent. By going with the 2.2 million projection they can justify their over reaction and do what every politician from Mayors to Governors to the President is claiming--"thanks to me you didn't see this death loss". Politicians will ALWAYS take the stance that makes them look the best and has the least risk. As voters we need to remember your Mayor and/or Governor who put you in lock down and consider whether you think that destruction of your local and state economy was justifiable.

from No surprise to any of us who looked at the phony models' assumptions that were used by WHO, the MSM and those in the var...

Some of the longer term potential economic fall out from the shutdown If the New Green Deal's alternative energy push wa...

Some of the longer term potential economic fall out from the shutdown If the New Green Deal's alternative energy push was not already in trouble the oil price plummet has taken the wind out of its sails. Similar thing happened in the '80's when the price of oil took a nose dive. If you are an investor I would look for an opportunity to take profits or minimize my loss. Between the stored oil glut and how long it will take to get the world's economic engines back to consumi...ng large amounts of it I suspect the price doesn't see $50 for WTI for a long while. Cruise lines are an area I always avoided buying stock in largely because something like the Legionnaire's disease outbreak seemed likely to repeat itself at some point. I suspect that there will be a lot more like me as far as stock investment and a drop off in those actually taking a cruise. NYC and the concept of high density population lifestyles i.e. sky scrapers and mega apartments/condominium may take a hit. I know I would not want to own real estate in NYC right now. Their mass transit system seems the perfect breeding ground for a virus outbreak. At least in SF the BART is above ground and gets sunlight doused where as the subway in NYC is a dark, moist tunnel for most of its run. All the high percent of death per million state residents is in crowded metro areas. There is much to love about where I live with five acres, a large orchard, garden and green space between myself and neighbors. Maybe it is time for corporate America to look to less populated areas where their employees can experience living like something other than in a rat colony.

from Some of the longer term potential economic fall out from the shutdown If the New Green Deal's alternative energy push wa...

Here is some proof for those still on the fence that Fauci has advised Trump poorly and it is time to start to re-open p...

Here is some proof for those still on the fence that Fauci has advised Trump poorly and it is time to start to re-open parts of the country subject to local discretion. The attached link has data sorted in some very useful ways that expose that there are exogenous variables that make some parts poor guides to the rest of the country. See NYC, New Orleans metro, Detroit etc. The key column is Deaths per 1 M population. NY 513 NJ 265... MI 149 LA 180 CT 155 MA 111 No other states are close to 100 per 1 M populations with bottom NC, NE 9 UT, HI, MT 6 WV 5 SD 7 TX 10 CA 17 See any patterns? Dense populations, mass transit, Mardi Gra. We were panicked by people whose math skills were so poor in building models that key assumptions were left completely out as they theorized that NYC was the epicenter of the spread. Facts seem to point to other issues especially since NYC continues to run mass transit since car ownership is expensive even if you can find a place to park. Maybe a good time to move to a bit more open air and less mass transit ! https://www.worldometers.info/coronavirus/country/us/…

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Maybe things should not go back to 'normal' after this virus settles down. I encourage people to read this incredibly ...

Maybe things should not go back to 'normal' after this virus settles down. I encourage people to read this incredibly detailed and well cited study published in Hong Kong in 2007. As an author I hate to ruin an ending but here are the last two lines: "The presence of a large reservoir of SARS-CoV-like viruses in horseshoe bats, together with the culture of eating exotic mammals in southern China, is a time bomb. The possibility of the reemergence of SARS and other novel viruses from animals or laboratories and therefore the need for preparedness should not be ignored." WHO and China are indirectly complicit in every death from this virus. Note the "culture of eating exotic mammals in Southern China, is a time bomb". Is the world just going to let them continue to operate the wet markets? Maybe it is time for a worldwide 'cold war' with China and ostracize them and their citizens until they stop making "time bombs"? The implications of that have far reaching economic impacts that could drive us to a true Great Depression as the world realigns supply, demand and distribution channels for an isolated China. A tough call but possibly one that should be discussed. If Climate Change was an existential threat this is the REAL deal we have already seen more than once. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2176051/…

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More proof that only science deniers buy into the climate change guidance of the left. Even the ultra liberal and ofte...

More proof that only science deniers buy into the climate change guidance of the left. Even the ultra liberal and often biased in their view website Snopes had to admit that: "Based on the data contained in the International Energy Agency’s (IEA) February 2020 report, it would be accurate to say that in 2019 the U.S. had the largest year-on-year reduction in carbon dioxide emissions of any country, in absolute terms." Think about that! Germany and the EU with their love of ...their version of the New Green Deal could not out perform the US in reducing carbon emissions. If you read the whole report you would find that natural gas was the driver of the reductions. So apparently the Paris Climate Change Accord is exactly the hoax that Trump and any thinking person knew it was. I encourage people to read the report because it contains some interesting information that once again points the finger at those who are destroying the environment. Hint: China is a big player. https://www.iea.org/articles/global-co2-emissions-in-2019…

from More proof that only science deniers buy into the climate change guidance of the left. Even the ultra liberal and ofte...

Corona virus and state budget thoughts The piece I wrote a few weeks ago based on one of my international trader sources...

Corona virus and state budget thoughts The piece I wrote a few weeks ago based on one of my international trader sources is being bore out as the Italian outbreak is being better understood. The Chinese connection has now been better publicized and in fact the first two patients were Chinese. Sweden is going to be the country for all others to benchmark against in how you deal with a pandemic. They have chosen to rely on individual responsibility and have not shut down bu...siness or public gathering. So far they have not been impacted any more or any less than other countries. At least there is now a comparison to keep the "we were right no matter the outcome" game from being played by our politicians and bureaucrats. Sometimes there is an opportunity in state budgeting for a win-win-win. The budget crisis may give us one. State work forces in every state I have studied are heavily weighted towards elderly workers. The structure of benefits and advancement almost guarantee that outcome but that is for another discussion. However, given that reality states should consider a voluntary buy out or what is called a VoBo of any state worker over 65 by giving them additional "years of service". State retirement systems using defined benefit types of retirement have an equation that rewards workers for more years of service hence offering more years to those workers is a powerful incentive. For example five years in a 2% multiplier system creates a ten percent increase in retirement benefits. If they are over 65 they automatically qualify for Medicare thus there is no need to offer any COBRA or extension of health benefits. By reducing the age of the workforce the state health insurance costs are reduced giving the taxpayer and the budget a break without harming the retiree. There is an additional savings in the fact the older workers are some of the highest paid. I could go into a long discussion of how you replace them without increasing the number of FTEs but that is for another time. That 'hit' on the retirement system of those additional years is a "future value of a dollar" play i.e. a dollar in the future is less costly than a dollar today and if they manage the savings to the state it is not a true cost at all in the long run. I would guess five years is about the right amount to maximize the number taking the VoBo and the structure I suggest minimizes the costs to everyone concerned from state worker to state budget to taxpayer hence the win-win-win.

from Corona virus and state budget thoughts The piece I wrote a few weeks ago based on one of my international trader sources...

The "low" estimates of those financial services I subscribe to their publications are 10 million Americans unemployed by...

The "low" estimates of those financial services I subscribe to their publications are 10 million Americans unemployed by the end of this forced shutdown. We all should remember this does NOT include the self employed unless they were paying themselves a wage in their business. Has the prevention become a overreaction that will drive us into a great depression is a question that our officials need to consider. The epicenter of deaths is in a city with a high density of pop...ulation, a mass transit system that was widely used and a large number of international visitors. How those variables apply to the rest of the country is pretty questionable. Similarly the New Orleans Mardi Gra celebration's timing that created their position as a high death loss area is unlike the rest of the country. Should we risk a great depression based on Fauci's view of the epidemic? In investment we often discuss past performance when we consider a particular company. In CDC and Fauci's case the past has not been particularly impressive. In 2009 the flu epidemic they predicted would kill 90,000 actually resulted in 12,500 deaths. The Ebola scare numbers were even more skewed. No crystal ball or time machine exists that will let us look to the future to be able to say anything with certainty but my small sampling size of former clients is beyond troubling. The impact on their fiscal and mental health is real. Next year's state budgets will be devastated financially leaving the ability of each in a quandary. Public Education is always first to the 'trough' and my experience has been there is not any situation that they believe requires that they tighten their belt. Medicaid's ranks will swell as it always does during high unemployment. In effect the two big consumers of tax dollars will consume a greater share of a dwindling resource. Going to be a tough time under the domes of state capitols. Cries for tax increases from the users of taxpayer funding will fill the halls of legislatures. It will be a tough year for conservatives to stand their ground and the result could be even tougher on taxpayers struggling to recover from the fiscal impact of this 'cure'.

from The "low" estimates of those financial services I subscribe to their publications are 10 million Americans unemployed by...

I am still holding some cash for bottom fishing. These "dead cat" bounces of the Dow and NASDAQ are not really an indic...

I am still holding some cash for bottom fishing. These "dead cat" bounces of the Dow and NASDAQ are not really an indication things are going to improve soon. I guess the positive is that the up and down plays are available to the small investor now with online investing and zero commission charges. I think when the next unemployment report comes out people will realize throwing money at the problem is only a temporary fix. Many businesses will not be reopening, however,... what will happen is those assets of things like restaurant 'hardware' will be purchased and new businesses will start up. That will not be the V shaped recover that some seem to think is possible. We are lucky we are still mostly a free market economy as I suspect the really slow climb out of this will be the socialist/communist countries with centrally planned economies. My prediction is that they will at first appear to be doing better but 'flat line' as the concept of supply not being tailored to demand once again proves its validity. I suspect the cure is much worse than the problem in the long run. Maybe the worst part of this is a population that was willing to accept their Constitutional rights being assaulted without so much as a whimper. Next outbreak of a swine or bird flu the government may get away with the same suppression of rights. Far more people died to attain and maintain those rights than this virus will kill.

from I am still holding some cash for bottom fishing. These "dead cat" bounces of the Dow and NASDAQ are not really an indic...