The Next Big Bailout: The US Postal Service
Following the roughly two-year overdue rout of municipal securities, which somehow has caught market "professionals" by surprise, there are increasing calls that the Socialist States of America should bail out all the insolvent cities and states that back these securities post haste. Judging by the approach to risk (or lack thereof) so far by supreme chancellor Bernanke and his impotent fiscal policy determining brethren, this will certainly happen within the next 12 months. But the government may be smart to leave some money on the sidelines: another far more prominent bankruptcy is coming - that of the US Postal Service itself, which in tried and true fashion, continues to raise compensation even as net income plummets, and the organization can no longer be deemed to be long-term viable. John Lohman explains.
After guiding toward a loss of $6 to $7 billion for fiscal 2010, the Postal Service disappointed on Friday, November 12th announcing an $8.5 billion loss (they apparently didn’t attend the Jack Welch University of ‘guide-down-and-beat-by-a-penny’) for the year ending September 30th. This is on top of a loss of $3.8 billion in 2009 and $2.8 billion in 2008.