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Tuesday, July 26, 2011

Playing close to the raising of the Debt Ceiling will have severe repercussions in short and long term borrowing.

Playing close to date and the raising of the Debt Ceiling will have severe repercussion on short and long term borrowing.

Here in San Francisco - the City and County of San Francisco and more the so called Enterprise Departments - the likes of the SF Port Authority, the SF Airport, and the SF Public Utilities Commission - have had the habit to raise money - using short and long term bonds - in the past without much fore thought. This time around they will be in deep - trouble.

It is all about timing - but this time it is also about the "skunk" - as it happens the "skunk" in this case happens to be the Republican Party and its very poor fore sight and leadership.

Anyway, in San Francisco mostly outside contractors descend on our City looking for opportunities.

And, as has been the practice in the past - crooked consultants and Prime Contractors - all line up to steal, rob, and plunder -   on the many projects of City is offering.

The projects are meant to help the constituents of San Francisco - but, as we have seen outside contractors, outside entities mostly crooked consultants are making hay - while the sun shines.

The SF Public Utilities has wasted millions on the Water System Improvement Project (WSIP) and soon it will spend billions - as much as $6.9 Billion - on the Sewer System Improvement Project (SSIP).

The fiscal responsibility linked to this major project has not been vetted with the public. A few think - they know it all - and when the rubber meets the road - those that are in the cockpit will have to bail out - without a parachute!

In the past the entities that rate the Bonds such as Moodys - looking at the equity; we have - linked to our City and County of San Francisco, and our large budget have given us a pass. Not anymore.

This time around; the unfunded fiscal responsibilities like pensions, health benefits, and other such things - will have to be reckoned  you either have the money or you do not. We simply do not have the money - to address the many unfunded issues that we are dealing with in the next five years. 

What makes the situation precarious is the Debt Ceiling which if not negotiated and put in place within the next 48 hours - will trigger adverse impacts - on many levels.

Of note and of very serious consideration the raising of the Interest Rates - one single point can mean thousands and a few points - reach the billions - when compounded.

Foreign countries that have invested in our Nation - mainly China - if they pull out - can see the interest rates hit the high ceiling and cause tremendous damage - far worse that the repercussion of the 2008 Economic woes.

For the longest time ever on the many projects - when the various entities mentioned - some Bond Measure - the constituents did not react negatively - but , all this has changed - in recent months. Every one is studying the Debt Ceiling and most people are aware the time to have checks and balances - is now.

There is nothing more dangerous then uncertainty - and this "uncertainty" will come to bite the entities that are now negotiating all the major projects - be it the TransBay, the impending High Speed Rail, the Central Subway - the SF Public Utilities Commission - with its SSIP.

In recent weeks there is lot of pondering - because, now - suddenly all the calculations must change and reflect - reality.

And when you deal with reality - you deal with facts - the good, the bad, and the ugly.

The dire economic situation - we all have been dealing with has been made worse by certain decisions linked to the Stimulus Plan.

For the better part - we in San Francisco could count on Nancy Pelosi, Barbara Boxer, Diane Feinstein, George Miller - and others in Congress and the Senate - who could use their influence and bring Pork Barrel monies to tide our fiscal - difficulties.

Not any more - the Republicans are out to give the Democrats a hard time - and the Democrats now have their tail between the legs - and have not YET figured how to deal with reality. They have had it good for years - and with the last elections - lost all fiscal control of the economy and appropriations.

In recent years  - especially in the last two years - here in the Bay Area we have had no sound leadership.

It does not help with immature Mayors both in San Francisco one interim and another full of fluff in Oakland - pretending to know some - when they have no leadership skills.

The SF City Department Heads - in the past; listened to Willie L. Brown - the "thug Mayor" who pulls strings. Gavin Newsom had others - his father, CBRE, and the Pacific Heights Mafia.

Gavin Newsom made hay while the sun was shinning - millions of dollars in deals in China - linked with his Wine and related products. The succor used his Mayoral clout to make money - and must be investigated.

Poor Ed Lee has his moustache and nothing more to offer. He should not try to run for Mayor - lying all the way to the poll booth. If he does he will ruin the fair name of this great City.

The Chinese constituents have been made to sign some petition not understanding fully the expensive technical hurdles linked with the Central Subway - think they can easily elect a Chinese candidate - and have it all the way.

This City has wasted millions with Parcel A on Hunters Point. It now wants to pour millions down some dirty hole with the Central Subway that is not wanted.

This debt ceiling will have serious repercussion with the TransBay, the High Speed Rail, the SSIP.

We will be in deep trouble - if very serious and detail deliberations are not conducted early - and sound principles put in place - linked to our major projects.

We must NOT waste the tax payers money.

If not it will lead to a situation and the bankruptcy of San Francisco - much like the City of  Vallejo.

On the National level the debt ceiling has revealed that each and every constituent in our Nation - numbering some 331,000,000 each have a debt linked to the Nation Debt in the amount of $200,000.

This is not a personal debt but one that serves general fiscal and statistical - purposes - and linked to our National Debt with links to the Debt Ceiling to make amends and bring our Nation's Economy on track.

It will take our Nation if we are very lucky - to pay our debt over eight generations. Others say - the only way to fix this mess - is to declare "world bankruptcy".

We see what has happened to Greece. The Bond Rating in Portugal has been down graded, Spain is screaming and shouting for help and getting none. Italy is in a mess too.

If the United States - debt ceiling is negotiated in a haphazard manner - it will come to haunt the entire - Nation.

More the local major projects tied to Bond Measures and interest rates.

A couple of points higher - a couple of Bond rating lower  and we all will be swimming in cesspool - of our own - creation. Go figure.