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| Miami-Dade Mayor Faces Recall Over Tax Hikes; Recalls Pending in Chattanooga and Omaha Posted: 22 Dec 2010 08:35 PM PST Finally! Taxpayers in Miami-Dade have had enough. A petition to recall Mayor Carlos Alvarez has gathered double the number of signatures required. I wholeheartedly endorse this move by taxpayers and encourage other such efforts in every city where the law allows recall efforts. Please consider Florida: Miami Mayor Faces Recall Mayor Carlos Alvarez of Miami-Dade County faces a recall after opponents gathered enough signatures to force an election. The drive came after the county raised the property-tax rate to balance its budget. The county commission must call an election in 45 to 90 days, Harvey Ruvin, clerk of courts, said Tuesday. Recalls are also being sought in Chattanooga, Tenn., and Omaha after proposed tax increases.Please check out the Recall Mayor Alvarez initiative. Under Mayor Alvarez's watch, Miami-Dade's unemployment rate rose to 14.4 percent – almost 5 percent higher than the national average. At the same time, the Mayor's proposed budget calls for "hiking property tax rates 14 percent." Voters need to regain control. Mayor Alvarez needs to be RECALLED! Mayor Alvarez May Challenge Recall Effort Inquiring minds note Mayor Alvarez May Challenge Recall Effort The math for Miami-Dade Mayor Carlos Alvarez is stark. A recall effort aimed at him has certified nearly twice the number of voter petition signatures needed to force a countywide recall election by next spring. Alvarez said Wednesday, "I believe the voters have a right to vote on this issue. However I will not give up my right to challenge something that is wrong."Stop The Tax Increase Miami is bankrupt and Florida is ground zero for the property bubble bust. But that does not stop Mayor Carlos Alvarez from sucking every last drop of blood from taxpayers. As I have pointed out on numerous occasions, not a single police of fire department job need be lost. All it takes is concessions from unions, not tax hikes to support those who get wages and benefits the average private sector worker can only dream of. I heard of this success a few moments ago from reader "RM" who writes ... Dear Mish,Indeed I have blasted corruption and fraud in Miami and backed this recall effort. However, 100% of the credit for this recall campaign goes to the citizens of Miami-Dade led by Norman Braman, for this worthwhile effort. I have no doubt the police, fire departments, and probably the teachers' unions as well will come out with massive fearmongering campaigns against the recall. Please do what you can to help. The recall effort was a preliminary success but far more work needs to be done. Please Join the Recall Mayor Alvarez Campaign . I suggest a pledge of time, money, printing, or advertising. Let's turn this first-round victory into a final knockout! Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| Ten Economic and Investment Themes for 2011 Posted: 22 Dec 2010 10:06 AM PST 1. US Municipal Bankruptcies Head to Center Stage Look for Detroit and at least one other city in Michigan to go bankrupt. Also look for increasing discussions regarding bankruptcy from Los Angeles, Miami, Oakland, Houston, and San Diego. Those cities are definitely bankrupt, they just have not admitted it yet. The first major city to go bankrupt will cause a huge stir in the municipal bond market. Best to avoid Munis completely. 2. Sovereign Debt Crisis Hits Europe The ECB and EU are hoping things return to normal and they can deal with things more calmly in 2013. The markets will not wait. Expect a new Parliament in Ireland to want to renegotiate whatever horrendous deal Prime Minister Brian Cowen agrees to. Portugal and Spain will need bailouts. The surprise play in Europe will be Italy, a country not on anyone's front burner. Italy will come under intense credit market pressure, and when it does the whole Eurozone comes unglued. Europe's banks are insolvent and ECB president Jean-Claude Trichet will have a choice, haircuts or massive printing. 3. Cutbacks in US Cities and States With Republican governors holding a majority of governorships, with Republicans holding a majority in the House, and with a far more conservative Senate, there is going to be little enthusiasm for increasing aid to states. There will be some aid to states of course, but nowhere near as much as needed to prevent cutbacks. Expect to see a huge number of layoffs and/or cutbacks in services. Cutbacks in cities and states will be a good thing, but that will counteract other gains in employment. The unemployment rate will stay stubbornly high. 4. Public Unions Under Intense Attack Public unions will face increasing hostility, not only in the US but also the Eurozone and UK. Look for Congress to consider legislation to kill collective bargaining. If it passes, the president would veto it. The problem however will not go away. Cities and states in distress will increasingly outsource every contract they can. 5. China Overheats, Multiple Rate Hikes Coming China, everyone's favorite promised land, has a hard landing. China will grow at perhaps 5-6% but that is nowhere near as much as China wants, or the world expects. Tightening in China will crack its property bubble and more importantly pressure commodities. The longer China holds off in tightening, the harder the landing. 6. Property Bubble Bursts Wide Open in Australia and Canada Australia, having largely avoided the global recession runs out of luck this time around. Look for the Australian economy to fall into outright recession. Look for Canada to slow dramatically as its property bubble pops. The US property bubble is much further progressed, by years, than Australia, Canada, and China. This matters immensely. 7. US Avoids Double Dip The tax cut extensions and the payroll tax decrease will keep the US out of recession. However, growth estimates are still too high. The tax cut extensions do nothing more than maintain the status quo while the payroll tax deduction is just for a year. Most will use it to pay down bills. Look for GDP at 2.0-2.5%. That is the stall rate. 8. Year That Something Matters For the global equity markets, this will be the year that something matters. Certainly nothing mattered in 2010, and optimism for equities is at extreme levels. I have no targets other than a suggestion this is an extremely poor time to invest in darn near anything. 9. Decoupling in Reverse I do not think any countries decouple in 2011, including China. However, on a relative basis, the US could. Europe is a basket case, China is overheating, Australia is headed for recession, the UK is going nowhere, and 2.0-2.5% growth in the US just might look damn good compared to anything else. Bear in mind far more than 2.0-2.5% US growth is priced in, but on a relative basis that is likely to smash the performance of the Eurozone, Australia, and Canada. China may grow 5.0-6.0% but with 10% priced in, overweight China, the emerging markets and the commodity producing countries is a serious mistake. Actually, equities are a mistake in general and so are commodities. Finally, falling commodity prices would be US dollar supportive and supportive of a decreasing US trade deficit as well, especially if grain prices stay high while oil sinks. Should grains stay firm while other commodities sink, it would help boost US GDP. 10. US Dollar to Strengthen Look for the US dollar to strengthen because of the net effect of all the above issues. Relative Performance Examples On a relative but not absolute basis I like the US. On a currency adjusted basis I especially like Japan. Here is a hypothetical example: Should foreign equities drop 20% and the US dollar strengthen 10% the loss to US investors would be 30%. Should Foreign investors buy US equities and face a loss of 20% and a 10% rise in the dollar, they would see a 10% loss. US investors of course would see the full 20% loss. Japan looks attractive in nominal terms but strengthening of the dollar compared to the Yen could negate some if not all of that. Equities in general, with the possible exception of Japan do not look attractive. Miscellaneous Issues The order in which the above themes play out could be important. If a muni crisis hits the US before a sovereign crisis in the Eurozone and a slowdown in China, the dollar may not initially perform as expected. Similarly, if the US strengthens more than expected in the first quarter while Europe and China stagnate, another leg down in treasuries may be in store with the US dollar quickly blasting higher. I have no firm conviction for gold, silver, or US treasuries other than gold is likely to hold its own and then some should the ECB decide to print its way out of this mess. US treasuries are now in no-man's-land dependent on the order of things and the reactions of foreign central banks as the crisis plays out. Seasonally, treasuries are generally weak until June (think tax purposes). However, there are so many factors now, including Fed purchases, it is hard to estimate. 2010 was a lull in the global economic crisis. Don't expect 2011 to be the same. Something, indeed many things, are likely to matter in 2011. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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