The Market And Energy Page, T+334 -- December 21, 2017

Not-ready-for-prime-time: e-mail to a reader earlier this morning --

1. The new tax bill is a $1.5 trillion package -- this is very much like a $1 trillion infrastructure bill that Trump has wanted. And unlike waiting for "shovel ready" projects (held up by CAVE dwellers), the $1.5 trillion starts getting disbursed as of January 1, 2018.

2. Remember when the US corporate tax was 35%, but everyone on CNBC said that the "real" rate paid by US corporations was significantly less due to loopholes? Well, CNBC has noted that again this morning: the new rate is 21% but one can imagine that US corporations will find ways to lower that tax rate, also. Just like the individual: I'm in a certain tax bracket but after deducting deductions/credits, etc., my effective tax rate is definitely lower.

• Steve Liesman says:
• current rate of 35% to drops to 21%
• effective tax rate, estimate: current effective tax rate of 23% to drops to 9%!!!
• the biggest winners, again, according to Steve Liesman:
• real estate/rental
• agricultural (think Deere)
• utilities
• health care/social assistance
• transportation/warehousing

Weekly jobs report: first time claims rise more than expected! Link here --

• forecast: 231,000
• actual: 245,000

3Q17 GDP: final reading -- 3.2% vs 3.3% expected. Link here.

$58-WTI: oil falls as UK North Sea pipeline moves closer to restart. And that was about it. Not much reason to read the story. The headline says it all.

Saudi budget: previously posted but this story has a slight bit more information. AP is reporting that Saudi Arabia heralds biggest spending plans yet amid deficit.

Illinois: the state lost one resident every 4.3 minutes in 2017; dropped to 6th most populous state. Most populous states: CA, TX, FL, NY, Pennsylvania, and now Illinois. Retirement system of Illinois now on the hook for $120 billion. Illinois was the very first state noted by the blog facing doomsday; that first post was posted February 24, 2010. Some of the posts from that page:

• long story in Chicago Tribune today; homeowners fed up with property taxes; leaving the state; data points, posted September 30, 2017.
• unpaid bill backlog hits a record $16 billion. September 20, 2017. 
• needs a half year of taxes just to pay the bills -- June 27, 2017. Illinois is functionally bankrupt, and the only good news is that Illinois favorite son Barack Obama is no longer in the White House to bail them out. 
• Illinois' comptroller says the state is now in "massive crisis mode."
• could Illinois be the first state to file for bankruptcy? -- CBSNews.
• unable to reach a budget deal; credit rating lowered to just one notch above junk.
• dire. Reuters -- posted January, 2017
• unpaid bills could surpass $13 billion; currently $10.6 billion (late 2016)
• budget deficit could grow beyond $5 billion
• no 12-month operating budget for two years (since 2015)
• forecast: $7 billion deficit in 2018; $6.5 billion deficit in 2022
• unpaid bills could grow from $13.5 billion at end of fiscal 2017 to $47.1 billion by 2022 (five years from now) 
• despite huge tax increase, Chicago still faces a huge pension fund gap. November 10, 2015.  
• electricity may be shut off at state capitol; unpaid bills. October 1, 2015
• 2013 bill to "solve" the pension problem has been ruled unconstitutional by the Illinois Supreme Court. Things just got tougher in Illinois.
• applications for food stamps in Illinois is greater than its creation of jobs. September 16, 2014.
• Chicago workers protest as pension crisis brews. February 19, 2014.
• resumes bond sale as the worse-rated US state. April 2, 2013
• in a very rare move, Illinois "yanked" bonds after they realized expectations would not be met, January 31, 2013.
• first state to run out of money (pension fund), 2018. The next to fall: Connecticut (2019), Indiana (2019), New Jersey (2019), Hawaii (2020), Louisiana (2020), Oklahoma (2020), Colorado (2020), Kansas (2022), Kentucky (2022), New Hampshire (2022). The bill for Illinois the following year (2019): $14 billion; Connecticut (2020): $4.9 billion; and, Indiana (2020): $3.6 billion.
• worst off in the nation -- $12.1 billion deficit; $5.0 billion in bills it can't pay right now. It cannot grow itself out of its problem. This is the administration's home state. Can anyone spell "bailout"?
• poster child for pension liabilities. With financial year 2011 less than six weeks away, the pension arrears for Illinois look daunting. The state faces unfunded liabilities of about $78bn, the biggest pension hole in the US, and contributions of more than $4bn for 2011, the largest single element of its $13bn budget deficit. The state has a two-point plan for resolving the deficit: a) delay acting on the problem during an election year; and, b) asking for a Federal government bailout. Because Illinois is the president's home state, this seems as good a plan as any. May 20, 2010. 
• pending $12.8 billion deficit. Residents could be facing unprecedented personal income tax increases. February 24, 2010.