Wednesday, October 8, 2008
Thanks to Jeanne Faatz (the only City Council member who seems to understand finance) for the following, an excerpt from the previous post which I feel needs to be stressed. Note particularly the information that 1) your valuation of real property may be going down (but not in 2009 unless you appeal) and 2) your mill levy may be going up.
Also see this:
The measures followed similar efforts by other central banks and governments around the world over the weekend and yesterday to get financial institutions to stop hoarding money and start lending to one another and to their customers.
While Europe struggled to stop new bank failures, in the United States, alarm has increasingly focused on the commercial paper market, where all sorts of businesses and local and state governments turn for money for day-to-day operations. For the past week, that market has been nearly paralyzed, and yesterday, the cost of such borrowing soared.
One benefit of such an action is that it would free up money for lending and lower the interest rates banks pay to borrow money to conduct business. Yesterday, the rate at which banks lend to one another — the London interbank offered rate, or Libor — was 4.3 percent for a three-month loan. In normal times, it would be not much higher than the 2 percent bank lending rate set by the Fed. The premium is a measurement of the mistrust among banks and translates into higher rates for businesses and consumers, if they can get loans at all.
In a survey of more than 300 municipalities released last month, the National League of Cities reported that four out of five finance officers said their cities would be less able to meet needs in 2009 than this year. The group called the findings troubling, with no sign of getting better.
“This is the first time for at least two decades that all three major general tax sources — property, income and sales — have all declined at the same time,” said Michael A. Pagano, a co-author of the report and dean of the College of Urban Planning and Public Affairs at the University of Illinois, Chicago. “That’s the real frightening thing for cities.”
AMSTERDAM/LONDON (Reuters) – What if there were a run on a bank and no one knew? In recent days some U.S. media have focused on a “silent run” on the deposits of Wachovia bank, which is now being taken over, after a bailout plan stalled and its rival Washington Mutual was seized.
at 3:42 PM
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