Aggregate funded and unfunded liabilities of the states divided by the number of taxpayers

We came across The 2013 Financial State of the States and wanted to bring broader attention to it. The report addresses the scale of the problem of unfunded liabilities of state pensions & other retirement benefits. Recall these amounts are typically off balance sheet items, unseen & poorly understood by the public, and therefore a great source of financial & fiscal abuse by politicians. They are very real and large.

Below is an estimate of the scale of the aggregate problem: you can see that only $195 billion of the estimated $1.1 trillion of liabilities are actually reported on states’ balance sheets. So how is a citizen to know? Well, the intent was that citizens were not supposed to know and that’s the point of abuse. The deception has largely been successful:

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Q2 2015 Commentary: the pruning knife vs two issues

Updated on Saturday, July 18, 2015 at 11:27AM by hb

Updated on Monday, July 20, 2015 at 02:53PM by hb

Our market outlook is simple. Nothing will happen between now and November 8, 2016, that is, nothing particularly good. Anticipate no reform of policy or regulations...  tax, fiscal, monetary, environmental, energy, labor, or educational matters. We may see futile, symbolic, political gestures, and we will most certainly see Obama launch a last wave of initiatives, mostly by Presidential fiat, and some will likely be materially destructive. A cynic might argue Republicans have incentive to let them roll, to sit and watch the rubble in advance of the elections. But who among us would be a cynic?

Meanwhile the big economic picture remains the same. Our national problems remain unsolved, and so they compound, become more deeply embedded, more complex & costly to remedy.

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Gary Shilling on deleveraging

Steve Forbes interviews Gary Shilling, and it warrants a listening. 

You find some familiar themes put differently:

• an expectation sustained low growth induced by deleveraging
• risk on trade & asset quality
• concern about  the dis-connection between monetary policies and real economies that creates a growing risk of chaotic re-adjustments 
• concern with and an explanation for the decline in money velocity 

Agree or not with the particulars, and we make no endorsement in that regard, we're in for a long ride... so we have some time to think about loading up on 30 yr zeros.

Update on Saturday, March 16, 2013 at 08:18AM by hb

Forward P/E Ratio for S&P 500 was also below long-term averages on October 9, 2007

"The estimated earnings growth rate for Q1 2013 is -0.6% this week, unchanged from last week’s growth rate. On December 31, the Q1 earnings growth rate for the index was 2.2%. Nine of the ten sectors have witnessed a decline in earnings growth rates since that date, led by the Materials, Consumer Discretionary, and Information Technology sectors. The Financials sector is the only sector that has not recorded a decrease in expected earnings growth since the start of the quarter.

Part of the reason for the drop in expected earnings growth for the index is the high percentage of negative guidance issued by S&P 500 companies for Q1. Overall, 83 companies have issued negative EPS guidance for Q1 2013, while 25 companies have issued positive EPS guidance. Thus, 77% of the companies in the index that have issued EPS guidance have issued negative guidance. This percentage is well above the 5-year average of 61%."