From the Daily Record:
State revenue falling short of expectations
BY JONATHAN TAMARI
“State Treasurer Bradley Abelow plans to pull the state’s purse strings even tighter on an already difficult budget after the latest round of revenue projections.”
“Abelow is planning about $110 million in additional budget cuts after new projections predict state revenues will fall short of expectations. The cuts will come on top of the more than $2 billion in spending the Corzine administration says it has already slashed.”
“”Clearly, the job of balancing the (fiscal year 2007) budget has become more difficult,” Abelow said today while detailing the latest revenue projections to the Senate Budget and Appropriations Committee.”
“The deficit comes largely because Abelow now expects to have $440 million less in revenues for the budget that begins July 1 than first projected. The current budget, which ends June 30, is expected to have $330 million more in surplus than first predicted, however, helping to narrow the new gap.”
“One casualty of the projections will likely be Gov. Jon S. Corzine’s proposed income-tax breaks for people with low incomes. Cutting that plan will save the state $105 million.”
“The new shortfall results from lowered expectations on income tax collections, which Abelow predicted will fall $160 million short of what he originally projected, and corporate business taxes, will he expects to drop by $155 million compared to the governor’s first plan.”
From 1010 WINS:
NJ Lawmaker: Escape from Tax Hike Unlikely
New Jersey taxpayers had even less to look forward to Monday after an influential state senator said tax increases seemed necessary and previously promised property tax relief may be unlikely.
The comments from Sen. Wayne Bryant, chairman of the Senate budget panel, came after the state treasurer testified that poorer than expected tax collections eliminated easy solutions to state budget woes.
With the state facing an estimated deficit of about $5 billion for next fiscal year, Bryant said the state might not be able to increase property tax rebates 10 percent as Gov. Jon S. Corzine has proposed.
Bryant said cutting rebates was “on the table,” as well as other possibilities.
The rebates have been used by the state to help residents handle the nation’s highest property taxes. If they’re retained at last year’s level, senior and disabled citizens would get about $1,200, while others would get about $300.
…
On Monday he told senators the tax collections increased the deficit problem by $441 million, a contrast to recent years when better than expected tax collections helped lawmakers avoid tax increases.
It begins……..
I told you – NO BRIC
=====================
Jitters Over Rising Interest Rates
Send Emerging Markets Tumbling
By CRAIG KARMIN
WSJ
May 23, 2006
Stocks in developing countries tumbled Monday, extending one of their biggest losing streaks in nearly a decade, as growing jitters about the global economic outlook amid rising interest rates prompted investors to abandon riskier markets world-wide.
The pullback in markets as far-flung as Turkey, India, Russia and Brazil has broad ramifications for U.S. investors. Emerging-market stocks have been the world’s top performers over the past three years, soaring nearly 200%, based on the Morgan Stanley Capital International Emerging Market Index, a key yardstick. During that period, U.S. investors, led by hedge funds and more aggressive mutual funds, have poured money into even the riskiest countries at a record pace in search of better returns than they could obtain at home.
[edit]
Driving the sell-off: Expectations that central banks around the world, from the U.S. to Europe and eventually Japan, may be preparing to raise rates more aggressively than previously anticipated. News last week that the U.S. consumer-price index rose faster than expected raised the specter that interest rates will have to climb further to curb inflation. Even the recent retreat in commodity prices has not been enough to blunt inflation fears, and since many developing countries are commodity producers, these declines have weighed on their economic outlooks.
Selling by hedge funds and other more speculative investors is aggravating emerging-market losses. These investors, who aim to lock in short-term gains, will often sell their best stocks to ensure profits and cover any losses in other positions. So a sell-off in India may cause pain in Russia or Brazil, despite different economic outlooks and stock valuations.
When hedge funds hurt, prime brokerage at the bulge bracket follows, and then you can kiss Wall Street bonuses goodbye for 2006.
I guarantee a major hedge fund blow-up within the next 6 months.
Nikkei was down over 200 points earlier this evening, currently sitting down 170pts (-1%).
I don’t believe hedge funds are allowed to invest directly in India, so I’m not sure what the impact there will be.
Also, a lot of the I-banks revenue is coming from M&A work, so that will probably hold up even if trading weakens.
OT: Was speaking with some friends in Miami, who are in contract for a pre-construction 2 Br condo in downtown Miami, not on the water, rather in what was a ghetto. They paid $440,000 and put %5 down, they have been “updated” by the builders realtor rep, who is rushing them into putting up more money, because “it is now worth $690,000 and he doesn’t want them to miss out on those gains” He is insisting that they come up with the money asap, it gets better… he started the call complaing (I’m certain this was scripted) saying he just got back from a used car dealership, where he was assisting his parents in the purchase of a car, and did they ever deal with a used car salesman?…what a nightmare, no ethics etc. etc.” ps: it is not built yet, and I feel bad for these people because not only are they not going to win, I see a huge loss. Didn’t want to spoil there good feelings and learned my lesson in life about shining the light of reality on someone elses fantasy’s. ps: they don’t make big money.
anon @10:27
Almost the same experience … i know of a couple who squeezed themselves to the last penny in order to buy a house. Tried to warn them but they started preaching about RE always going up.
India is headed for a shocker. Properties costing $3K in 1962 are now worth $0.5 mil! Same story, “RE Investors” taking risky loans to buy land. The investors like some on this board truly believe that housing values can never go down.
GSML Invenotry continues its’ relentless rise EVERYDAY!
Does not Include FSBO.
May 23 29,626
may 22 29,496
May 19 29,398
May 18 29,260
May 3 28,110
April 12 26,582
March 6 24,111
OVERPRICED HOUSING PILING UP EVERYDAY.
BOYCOTT RIPOFF PRICES..
BOOOOYAAAAAAA
Bob
almost 30k on GSMLS. wow. what’s quantity is considered a 6 and 9 month supply?
The solution to pesche22’s problem is easy: vote these f%#$*&@ing clowns out of office!
“Escape from tax hike unlikely”
How about – “budget must be cut so the govt can live w/i its means”. How awesome would it be to be able to raise your salary whenever you needed money to spend?
ROFL, better hit taxfoundation.org and find a new state to live in.. Or bend over, grab dem ankles and let ‘Jonny Cakes’ Corzine have his fun… (oh wait, wrong governor :p)
I love federalism, it’s like competition for government!
ROFL, better hit taxfoundation.org and find a new state to live in.
Great, that will drive property values down too. Do it, too head over to PA, which has had a dead economy (outside of Philly) for 20 years now. Enjoy the low flat taxes of PA in Pittsburgh, while you try and find work !!!
There’s plenty of work in eastern PA and NJ, and even in DE… And if you know the PA lay of the land and can find an eastern county without a wage tax, get the 3% income tax, do all your shopping in DE, and buy your gas in NJ…
Just pick a bridge across the Delaware and live across it, and point and laugh at all the folks gettin jacked by Corzine…
Just pick a bridge across the Delaware and live across it, and point and laugh at all the folks gettin jacked by Corzine…
And have 3 hour commutes to NYC ? No, thanks. I will instead laugh at the people who commute that much.
Meanwhile I’m still amazed that people blame Corzine for a mess that was left by previous Governors like McGreevey and Whitman. I guess a rant doesn’t have to have factual basis.
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