States in Dire Straits

In Arizona, the budget has grown so gloomy that lawmakers are considering mortgaging Capitol buildings. In Michigan, state officials dealing with the nation's highest unemployment rate are slashing spending on schools and health care. Drastic financial remedies are no longer limited to California, where a historic budget crisis earlier this year grew so bad that state agencies issued IOUs to pay bills.

A study released Wednesday warned that at least nine other big states are also barreling toward economic disaster, raising the likelihood of higher taxes, more government layoffs and deep cuts in services.

The report by the Pew Center on the States found that Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin are also at grave risk. Double-digit budget gaps, rising unemployment, high foreclosure rates and built-in budget constraints are the key reasons.

You forgot New York - who says they'll be broke by Christmas.

How can this be? The market is doing fine! Too bad they can't just print money like the Feds. Oh well. I'm sure Christmas will prove to be a huge success as the tens of millions of people on food stamps and 99 weeks of unemployment spend their federal money gifts on new computers and dishwashers.

And if things are still in the shitter and the muni-bond market flat-lines with failed auction after failed auction, then the Feds will buy up all of those issues too! No worries.

Oh - and gold at fresh record highs....$1118 an ounce. And rising.