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Alabama Jefferson County Chapter 9 Muni Bankruptcy "Very Strong Possibility" Says Governor Bentley

Tyler Durden's picture


Alabama's Jefferson Country, which has been teetering on the verge of bankruptcy for years courtesy of $3.2 billion in bonds related to its sewer system (a deal which has not made JP Morgan many friends south of the Mason Dixon line over the years), may soon decide to unleash the spring-loaded municipal bankruptcy dominoes. Reuters reports that "bankruptcy is still a "very strong possibility" for Alabama's Jefferson County, Governor Robert Bentley said on Saturday -- a move that could make for the largest municipal bankruptcy in U.S. history. "It is still on the table, and it's a very strong possibility," Bentley told Reuters during the National Governors Association meeting in Utah's Salt Lake City. The county is observing a "standstill period" to allow settlement talks with creditors, and this week it finalized a plan aimed at settling the debt to present to creditors." And while the municipal insolvency tsunami is merely a matter of time (it would be amusing to watch the army of Whitney bashers retract), the greatest irony would be if the Federal government were to file first, a move which as Moody's already noted would immediately send 7000 munis down the Chapter 9 rabbit hole as well, effectively bankrupting the entire $2.9 trillion municipal bond market overnight.

From Reuters on why Jefferson County would merely be the tipping point:

A handful of U.S. cities and counties have teetered toward economic collapse in the wake of the 2007-2009 recession, which created budget emergencies in most U.S. states,

Two years ago, Vallejo, California, filed for bankruptcy. The Pennsylvania state capital of Harrisburg is reviewing a rescue plan designed to avoid a bankruptcy filing.

New York's Nassau County has been under state oversight since 2000 and in January the state seized greater oversight powers. The tiny Rhode Island city of Central Falls is now effectively run by a state-appointed receiver.

In a separate interview, Rhode Island Governor Lincoln Chafee said it is an "ongoing discussion" as to whether Central Falls would seek bankruptcy protection, but added that he is concerned such a move could hurt other cities.

Granted a bankruptcy is not a given yet for all the traditional reasons:

Bentley said his view of bankruptcy -- an unpopular option because it is expensive and could freeze the county out of the bond market -- has evolved and he is now concerned it could create an "image problem" for the county and state.

The county's main city, Birmingham, is Alabama's largest and the county is a significant driver of the state's economy.

"We're trying to recruit industry in Alabama, and we're trying to recruit industry ... and I really think that hurts us when we have the largest bankruptcy," he said.

"If there's any way that we can negotiate a settlement short of bankruptcy, that is our position."

Unfortunately the decision is no longer in the hands of the county: it is in those who bought the syndicated bonds.

Bentley said he is not open to sending money to the county. He also said he would agree to support forms of credit enhancements for new county debt, but the state would not guarantee that debt.

"We would support it only with backing from the county," he said. "We're not guaranteeing the debt."

Bentley said an increase in sewer fees would be necessary to generate funds for debt payments, but the increases should not exceed 10 percent.

"We can't allow them to have 25 percent increases, that type of thing," he said.

The problem is that with the Federal government retrenching on fiscal largesse for a long time, and downstream bailouts of local and municipal governments thus becoming a very big question mark, creditors may realize that the infinite bailout ploy is ending, and could very well scramble to extract as much money as possible while the money is still available. The biggest question mark is what develops in DC this week which will be the determinant for how numerous credit committees, not only in Alabama but across corporate America, perceive their probability of getting paid, and, as a result, accelerate prepayment demands from the obligors.


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Sun, 07/17/2011 - 14:02 | 1464016 trav7777
trav7777's picture

Diversity, bitchez

Sun, 07/17/2011 - 14:18 | 1464052 High Plains Drifter
High Plains Drifter's picture

cut it out trav.

you know damn good and well, its all about ..... Liberté, Égalité and Fraternité......

by the way, i have a friend of mine who used to own a hummer dealership there. they had to change over to some other cars due to the demise of hummer. but the brothers liked to buy those hummers from the (black sales force he employed).......using those liar loans and so the bros could style and profile on their way back to the ghetto accomadations doncha know......remember from the movie white men can't jump.......its not about winning, but its really all about how you look.........ha ha ha..........

Sun, 07/17/2011 - 14:29 | 1464086 karzai_luver
karzai_luver's picture

white men can't jump??? u shur homey?


How do they git into them thar jacked 4X4 mudders to hit the S'bucks???

Sun, 07/17/2011 - 14:48 | 1464133 wanklord
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Americans are a bunch of stupid animals easy to manipulate and subdue.The sooner the US economy collapses the better, so these brutes will finally learn NOT to live beyond their means.

Sun, 07/17/2011 - 15:25 | 1464230 Ahmeexnal
Ahmeexnal's picture

So it is Al-Abama the state to become the birthground of the north american marxist caliphate.

Sun, 07/17/2011 - 15:37 | 1464271 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Martha's polishing the brass on the Titanic; it's all going down, man.

Sun, 07/17/2011 - 14:50 | 1464141 High Plains Drifter
High Plains Drifter's picture

oh come on numbnutts, you don't think that is funny?  a man driving around in a hummer, while living in a run down ramshackle house?  isn't that the way we all are in reality?  we all try to be something we are not? its called keeping up with the jones's and while we do this our nation is destroyed. black people bought into it, just like everyone else. it has been decades now, since the leadership of most of the southern cities fell into the hands of black people. has anything improved?  nope. will anything ever improve? nope. are they more crooked than whites?  nope.  frankly i am not in the hate department, myself. but i really get tired of diversity for diversity's sake etc.......i know full well whose idea all of this was and why all of this happened and was implemented. so if you yourself have a problem with my humor while i see things that happen, no matter at whose expense it is, then you can take a long walk on a short pier as far as i am concerned. and that , is my big ten four........good buddy........

Sun, 07/17/2011 - 17:10 | 1464543 delacroix
delacroix's picture

fried chicken, watermelon, cadillac car, we ain't as dumb as you think we is

Sun, 07/17/2011 - 20:21 | 1465011 nodhannum
nodhannum's picture

What kind of fried chicken?  Doesn't sound half bad.

Sun, 07/17/2011 - 20:01 | 1464971 Republi-Ken
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Dose Conservatives screwed America back in 1565...

And every City now pays the social cost of that.

Sun, 07/17/2011 - 20:01 | 1464973 Republi-Ken
Republi-Ken's picture


Dose Conservatives screwed America back in 1565...

And every City now pays the social cost of that.

Sun, 07/17/2011 - 20:01 | 1464974 Republi-Ken
Republi-Ken's picture


Dose Conservatives screwed America back in 1565...

And every City now pays the social cost of that.

Sun, 07/17/2011 - 20:01 | 1464975 Republi-Ken
Republi-Ken's picture


Dose Conservatives screwed America back in 1565...

And every City now pays the social cost of that.

Sun, 07/17/2011 - 20:01 | 1464976 Republi-Ken
Republi-Ken's picture


Dose Conservatives screwed America back in 1565...

And every City now pays the social cost of that.

Sun, 07/17/2011 - 20:01 | 1464977 Republi-Ken
Republi-Ken's picture


Dose Conservatives screwed America back in 1565...

And every City now pays the social cost of that.

Sun, 07/17/2011 - 21:06 | 1465092 trav7777
trav7777's picture

yes, because the non-slaves in africa were doing so well at, like the time of Aristotle and shit.

It's ALWAYS whitey's fault, forever.  Every failure of a black is the fault of white people.  Forever.

Mon, 07/18/2011 - 00:29 | 1465445 Lednbrass
Lednbrass's picture

In theory I support your right to be a complete fucking moron but you really do abuse the privilege.  Whether you are a white guilt loser or entitled black loser doesnt matter, youre pretty much an oxygen thief either way.

Sun, 07/17/2011 - 14:40 | 1464109 max2205
max2205's picture

AL Bazzoka........ Boom, !!

Sun, 07/17/2011 - 14:21 | 1464054 bob_dabolina
bob_dabolina's picture

The municipal bond market is racist. It must be run by a bunch of KKK leaders.

Sun, 07/17/2011 - 17:00 | 1464520 Long-John-Silver
Long-John-Silver's picture

If the KKK was still in charge of Jefferson County in Alabama you would not have this mess. The real problem is all the NAACP members running a corrupt government in Birmingham, AL. You see, all the theft and corruption has bit them on the ass and is dragging them off to the woods like a pack of wild dogs.

Sun, 07/17/2011 - 22:54 | 1465323 LowProfile
LowProfile's picture

Can you blame them?

Hey, they finally got a piece of the pie...  Right before the ponz implodes.

Sun, 07/17/2011 - 16:15 | 1464371 NumberNone
NumberNone's picture

Country rubes getting chump change bribes from carpetbaggers.  The story that started it all for those that don't know the background.

Sun, 07/17/2011 - 17:46 | 1464649 Bastiat
Bastiat's picture


Sun, 07/17/2011 - 22:55 | 1465326 LowProfile
LowProfile's picture


...Lest we forget.

Sun, 07/17/2011 - 14:04 | 1464022 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And Meredith makes an O face.

Sun, 07/17/2011 - 14:26 | 1464075 knukles
knukles's picture

My thought pattern as well.
Works out peachie keen neato for everybody concerned.  To wit;

Meredith get to say; "See I toldja so." even though in this case she's right (bankruptcy) for the wrong reason (fraud, malfeasance, pay to play, etc.).

The politicians get to say; "See, we toldja, it's not the revenues, it's the banks."  Specious at best, but a good excuse as any.

The banks get to say; "See, it was all Morgan's fault, not us".

Morgan says; "Yeah, we admitted it and settled already, so piss off, mate."

And the resident of Jefferson County says; "Well fuck me, nothing ever changes. It should, the banks, politicians, lawyers, everybody should be skinned and hung.  But we really, deep inside never thought that anything would get fixed."

The rest of America says either; "Huh?"
or; "See I tioldja so.  The politicians are thieves and should be....tthefuckeveryourchoicepunishmentisinserthere.

And all that ends is not necessarily well, ever.

Sun, 07/17/2011 - 14:27 | 1464077 knukles
knukles's picture


Sun, 07/17/2011 - 14:29 | 1464084 Cognitive Dissonance
Cognitive Dissonance's picture


Just because someone isn't't mean they aren't right eventually. And if I remember correctly Meredith was talking about severe muni problems over a span of time, not that very instant. Of course, the Ponzi must declare anyone who isn't singing the praises of the Ponzi to be a heretic of the most evil and vile kind.

The Ponzi is (eventually) dead, long live the Ponzi. And long live Meredith for that matter.

Sun, 07/17/2011 - 18:15 | 1464726 Blano
Blano's picture

She's right already IMHO.  Lots of them are bankrupt, just like the US is when you look at the numbers.  It's just all the can kicking that keeps them technically solvent.

Sun, 07/17/2011 - 22:14 | 1465235 CH1
CH1's picture

Where do you think all that liquidity is going? It's keeping lots of small government orgs alive.

Sun, 07/17/2011 - 15:38 | 1464274 equity_momo
equity_momo's picture

I reckon she'd be a right go-er.

Sun, 07/17/2011 - 14:06 | 1464025 justanotherday
justanotherday's picture

US of B: The United States of Bankruptcy.


Sun, 07/17/2011 - 14:20 | 1464058 sitenine
sitenine's picture

Debt is an American tradition.

Sun, 07/17/2011 - 14:35 | 1464098 justanotherday
justanotherday's picture

Certainly is now. The US isn't what I thought it was. F'ng mess.

Sun, 07/17/2011 - 14:45 | 1464127 Cognitive Dissonance
Cognitive Dissonance's picture

I gotta ask.

What did you think the US was? Not picking on you since we all have/had our illusions at one point or another.

Sun, 07/17/2011 - 18:18 | 1464736 Blano
Blano's picture

I'll bite if you don't mind.

I think it WAS the shining city on the hill at one point, or could have been especially during the Cold War.  At least that was my belief, the goal to strive for.  Not anymore.

Sun, 07/17/2011 - 22:23 | 1465256 Chuck Walla
Chuck Walla's picture

And then the politicians discovered they could buy votes with other people's money. And its been down hill since.  Everybody's a victim and deserves a piece of someone else's paycheck.  How that logic ever worked I never did understand.  And the victimizing Sugar Daddy's hold ill gotten power by stealing from some and giving to others. Oh, and a little bit "sticks" along the way, like Charlie Rangel's Million Dollar realestate portfolio built on a Congressman's salary. Incredible money management skills there, Chaz!

Sun, 07/17/2011 - 14:07 | 1464027 PulauHantu29
PulauHantu29's picture

Let them reorganize in Bankruptcy....gets rid of all the rottenness out'sa  fresh start over so we can move on to the future.

Sun, 07/17/2011 - 16:49 | 1464464 Mr. Mandelbrot
Mr. Mandelbrot's picture

Yes.  That is what I want as a resident of Jefferson County.  The article seems to suggest all of Jeffco's financial woes stem from the $3.2 billion sewer debt, but that is only part of the story.  As for the sewer debt mess, (I'm going off of memory on these numbers, but they should be pretty close) officials looking back into what got us into it have determined that the updated sewer system, which was mandated by the Feds at the EPA, should have only cost the county $900 million.  The other $2 billion plus was squandered through overcharging contractors who bribed corrupt local government officials (Google Gary White) and fat commissions to the financiers (JP Morgan the most notable) who sold the county auction rate bonds that went no bid during the financial crisis leaving the county paying a ridiculous double-digit interest rate overnight.  Two dozen or so government officials and contractors are now serving prison sentences for all of the shenanigans, yet the people and businesses here are still stuck with the bill.  Jefferson County got screwed in every orifice at the same time.  Currently, sewer rates are outrageous and run 250% of the water charges (if you use $20 in water, you're charged $50 for sewer for a total bill of $70).  The latest plan to increase revenue is to charge those with septic tanks a $400/year "non-user fee," which I won't be paying.

The other half of the story has to do with an "Occupational Payroll Tax" that was recently ruled unlawful by the Alabama Supreme Court.  Instantly, an already cash-strapped county lost 30% of its income.  Overnight, they had to cut a large portion of county employees including closing all of the satellite DMV's throughout the county.  Anything to do with drivers licenses, car tags, titles, property tax, etc., etc. now has to be done at the main branch in downtown Birmingham.  I just had to renew my drivers license and the line was almost four hours!  We are definitely in a financial morass--some of it self inflicted because a bunch of dumbasses down here keep electing crooks, and some of it a result of the soulless predators at JP Morgan ensnaring us with auction rate securities.  Come what may, but Jeffco should default and put (at least some of) the consequences of the sin on at least one of the sinners (JP Morgan) . . .

Sun, 07/17/2011 - 22:44 | 1465301 Tangurena
Tangurena's picture

Don't forget that the EPA required a sewer system that met specs no other sewer system has ever had to meet: exactly 0% of rainwater runoff could make it to the river without going through the sewage treatment plant. It would have cost a lot less to stand up to them and just say "no".

Sun, 07/17/2011 - 14:07 | 1464030 blunderdog
blunderdog's picture

They should've known that whole indoor-plumbing thing was overrated.

Sun, 07/17/2011 - 14:26 | 1464076 Careless Whisper
Careless Whisper's picture

It's Alabama. You explain things to 'em in simple language.


Sun, 07/17/2011 - 14:07 | 1464033 The Architect
The Architect's picture

"Bentley said his view of bankruptcy -- an unpopular option because it is expensive"

Bankruptcy = Expensive


Sun, 07/17/2011 - 14:14 | 1464036 Debt Rolling
Debt Rolling's picture

Postponing bankruptcies is a risky bet on an economic pick-up.

If this economic "recovery" does not come, then you're worse off than before (thus the expression "buying time"). Detroit learnt it the hard way. Betting on a miracle rather than trying to equilibrate your budget is sending you right to the grave. 

I'll remember everybody that when the "decision makers" in 2008 unleashed the greatest amount of government support and intervention in the history of mankind, they were expecting results for this horribly risky bet to pay off. Unfortunately, the "recovery" didn't come: now is the time to pay the colossal bill, because all bullets have been fired.

The "muni massacre" will come, eventually, and then the "federal massacre". In 2012, 2013 or 2014, I don't know, but my experience teaches me that it often comes when people expect it the least, and when nobody believes in it anymore.

Sun, 07/17/2011 - 14:31 | 1464090 karzai_luver
karzai_luver's picture



Sun, 07/17/2011 - 14:43 | 1464116 max2205
max2205's picture

Nope, sorry, Fed has to go first because they'd never let them blow up unless their hands were tied

Sun, 07/17/2011 - 22:49 | 1465313 Iam_Silverman
Iam_Silverman's picture

"If this economic "recovery" does not come,"

But I thought I read in Barron's that we are now firmly in our second year of recovery!  Do ya' think they might have called it wrong?  Unless of course the "recovery" was based on when the bankers overly generous bonus pool was once again returned to record levels.

Sun, 07/17/2011 - 23:18 | 1465358 StychoKiller
StychoKiller's picture

They had a choice:  "Do what is easy or do what is right". Guess which was their choice.

Sun, 07/17/2011 - 14:10 | 1464038 El Oregonian
El Oregonian's picture

It's hard to tell which one is sewer...

Sun, 07/17/2011 - 14:11 | 1464041 Blano
Blano's picture

Geez they've been draggin this one out forever seems like.

Sun, 07/17/2011 - 21:29 | 1465141 dark pools of soros
dark pools of soros's picture

Will Harrisburg follow??  same kind of stupid deal..  the bama one was worse since JPM snookered them.. Harrisburg was just kinda stupid

Sun, 07/17/2011 - 14:15 | 1464048 JW n FL
JW n FL's picture

The Problem is Poor People..


all this talk of Banks and Cities being to Blame is poppycock!


End welfare! now that Wall Street has been given Trillions (which they did nothing with except pay themselves Bonuses) we dont need to continue to pay for Social Security / Welfare / Un-Employment Benefits / Health Care.. any of that poor people stuff should be cut.. and since we cant cut it.. because we need the poor to re-elect us.. we will blame each other and let the debt ceiling not rise! same thing.. forced austerity for the poor! the rich are already richer.. they can wait until the poor are really, really hungry to be yet even more richer!


It is plain as day yet most of you still beleive that a person who can not afford a meal is ruining the country! LULZ!!


Wall Street sits with Trillions.. doing NOTHING!! except paying themselves Bonuses and letting Ben-O-Cide Print away the value! LULZ!!!


Hurry! Forced Austerity will save us pennies on the poor while we give Wall Street trillions more later after squeezing the poor and making them beg!! LULZ!!



Sun, 07/17/2011 - 14:19 | 1464055 snowball777
snowball777's picture

Clearly they've been using those SNAP cards to purchase the means for revolution (at least in Alaska, anyway).

Sun, 07/17/2011 - 16:52 | 1464491 JW n FL
JW n FL's picture

Brother Snowy I LOVE my Fellow Americans! and one day we shall be free! of the Bullshit Government Intervention into my natural milk that I prefer to take with my tea.. as well the bullshit outright purchase of the lobby whores and those would would employ the lobby whores!


God Bless America!

Sun, 07/17/2011 - 18:23 | 1464751 snowball777
snowball777's picture

I just about fell out of my chair when he said that they had paid him for this.


Sun, 07/17/2011 - 14:16 | 1464049 drivenZ
drivenZ's picture

sale leasbacks in 3....2....1...

Sun, 07/17/2011 - 14:21 | 1464061 snowball777
snowball777's picture

You mean they can't just auction off the naming rights to their sewer?

Sun, 07/17/2011 - 14:22 | 1464065 johngaltfla
johngaltfla's picture

The Goldman Shitter does sing.....

Sun, 07/17/2011 - 14:23 | 1464067 drivenZ
drivenZ's picture

"This flush, brought to you by, your neighborhood JP Morgan"

Sun, 07/17/2011 - 16:39 | 1464451 hamurobby
hamurobby's picture

Please make check payable to: JP Morgan, oh and btw, its double last months bill, and we hope you like your recycled sewer water.

Sun, 07/17/2011 - 17:44 | 1464643 snowball777
snowball777's picture

The floating targets with Jamie the Greek's face on em make it all worthwhile.

Sun, 07/17/2011 - 14:22 | 1464063 johngaltfla
johngaltfla's picture

Municide bitchez....

Sun, 07/17/2011 - 14:24 | 1464070 lolmao500
lolmao500's picture

The FEDS could always bailout them.

And it's going to be fun when they all implode and cops get fired everywhere. Get armed, it's coming.

Sun, 07/17/2011 - 14:31 | 1464089 knukles
knukles's picture

Indeed, that's what's happening.

Firing all the police, firemen, EMS.... and keeping the bloated administrations, while retiring people, hiring them to do the same job as a consultant, which they cannot do, so they (out here) hire a intern to fill the old position from which the dude retired to be the seat filler so the retired dude can be the "consultant" and double dip.


Sun, 07/17/2011 - 20:48 | 1465049 disabledvet
disabledvet's picture

there's no turning it off now. the banks can't roll over the muni debt and the Fed's can't bail out the muni's anymore either. with a second leg down in real estate now guaranteed there goes the tax revenues "it's time to recognize the disaster that they've created." i've seen all these government employees--they're all just standing around right now "waiting for the inevitable."

Sun, 07/17/2011 - 22:18 | 1465239 narnia
narnia's picture

The pattern should be municipal bankruptcy (which will liberate the cities from their monuments & development projects), followed by county consolidation, followed by education cuts, followed by fire cuts, followed by police cuts, followed by municipal retirement cuts, followed by county bankruptcies, followed by state retirement cuts, followed by massive education cuts, followed by privitization of all fire duties, followed by the militarization of all police duties, followed by state bankruptcies...  that's if the currency doesn't collapse before the sequence.  then, the currency will collapse.

Sun, 07/17/2011 - 23:14 | 1465349 cranky-old-geezer
cranky-old-geezer's picture

dup - damn slow site

Sun, 07/17/2011 - 23:12 | 1465351 cranky-old-geezer
cranky-old-geezer's picture

... and cops get fired everywhere.

Nope, cops are revenue agents, they'll stick around.

But they'll be out writing tickets while you get robbed / burglarized / vandalized / mugged / shot / etc.

Sun, 07/17/2011 - 14:32 | 1464079 ebworthen
ebworthen's picture


What?  Banks lose money?  Nah.

Maybe that will be the trigger for the "MILF" (Muni I'd Like to Fund) program; "We must save the muni-bond market for Grandma and Grandpa, and the Children!"

Kiss that 401K, IRA, and savings and retirement goodbye!

"Yes, it is your money, however, you can only withdraw it over a 20 year period taxed at 39%  plus capital gains.  Thank you, have a nice day."


Sun, 07/17/2011 - 14:28 | 1464081 Little John
Little John's picture

   From my own admittedly constrained point of observation it appears that the swirling motion has started.  The drain is near.  Don't ya just love positive feed back loops?

Sun, 07/17/2011 - 14:36 | 1464100 Piranhanoia
Piranhanoia's picture

The city is going to have to go bankrupt because gamblers won the sewer in a poker game. The people are going to accept this and go about the business of installing septic systems to replace what their city lost.  One can see just how close to institutionalized insanity we have come.  The water that falls from the sky in parts of South America is owned by foreign corporations. 

we know what must be fixed.

Sun, 07/17/2011 - 14:40 | 1464107 Little John
Little John's picture

  Knowing what needs fixing is easy. It's the fixing that gets a little tricky. It's kinda like working on a car's engine while it's still running.

Sun, 07/17/2011 - 15:38 | 1464276 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

The fines which would have been levevied by the EPA if the city of Birmingham not corrected their waste water collection and treatment would have bankrupted the city already. The EPA is what failed. Thank you D.C.

Sun, 07/17/2011 - 16:23 | 1464395 Charles Wilson
Charles Wilson's picture




Sun, 07/17/2011 - 14:40 | 1464108 oogs66
oogs66's picture

Can you please find someone other that Meredith to be the champion of muni defaults?  Seriously, there have to be people out there with more facts and figures and data and some experience with debt markets that could be the champion of this issue? 

Sun, 07/17/2011 - 14:44 | 1464122 Little John
Little John's picture

  Truman said it well when he observed that if all economists were lined up end to end they would still point in every direction.  Economics < Hard science.

Sun, 07/17/2011 - 14:43 | 1464121 lolmao500
lolmao500's picture

In other news, the fear mongering has now reached fever pitch... raise the debt ceiling or else, Al-Qaeda will strike America...

A reduced US credit rating by any of the big three credit rating companies could provoke possible mayhem in financial markets around the planet and vastly escalate borrowing costs for the federal government and businesses, which would have a directly negative impact on public finances and further depress the nation’s overall economy.

“So you can understand why Al Qaeda, or any other terrorist organization motivated by the jihadist ideology, would see that America is highly vulnerable right now – perhaps more than it’s ever been - to an attack or attacks the impact or direct effect [of which] would be further depression of the US’s economy,” one of the counterterrorism officials said.

Sun, 07/17/2011 - 15:02 | 1464168 infiniti
infiniti's picture

Not just strike Amerika... blow up DISNEYLAND!!


Sun, 07/17/2011 - 22:20 | 1465254 CH1
CH1's picture

Bailouts forever, or the terrorists win!

Sun, 07/17/2011 - 14:45 | 1464126 DoctoRx
DoctoRx's picture

"We can't allow them to have 25 percent increases, that type of thing," he said.

Why not?

Bottom line is that Jefferson took the money.  They made the deal.  No gun was to their head.  If they were defrauded, their lawsuit(s) can recover all their losses, and perhaps punitive damages as well.  It's not only banksters who are to blame for this and our larger messes. 

Sun, 07/17/2011 - 15:19 | 1464211 ThirdCoastSurfer
ThirdCoastSurfer's picture

A 25% increase means the average rate will go from $37.74 to $46.88. 

Sun, 07/17/2011 - 15:39 | 1464278 blunderdog
blunderdog's picture

Discounts to folks who shit on their lawns and never shower, maybe?  "Pay for use" is a big talking point, isn't it?

Sun, 07/17/2011 - 16:22 | 1464387 ThirdCoastSurfer
ThirdCoastSurfer's picture

Great point. Of course when you're trying to create a septic system that will eventually follow NASA's lead and convert urine into a sports drink, the cost will eventually put you into orbit.

Sun, 07/17/2011 - 15:03 | 1464173 foxmuldar
foxmuldar's picture

Harrisburg Pennsylvania still weighing bankruptcy.

Sun, 07/17/2011 - 15:12 | 1464195 buzzsaw99
buzzsaw99's picture

They should stop talking and just do it, then the bondholders could sue JPM.

Sun, 07/17/2011 - 15:13 | 1464196 virgilcaine
virgilcaine's picture

This is why the Gov downgrade first.. sorry were broke too States, Cities and anyone else.  Your on your own !

Sun, 07/17/2011 - 15:32 | 1464252 Sudden Debt
Sudden Debt's picture


Bail them out...


Sun, 07/17/2011 - 15:37 | 1464269 janus
janus's picture

This will get very interesting.

Don't make any assumtions about Gov. Bentley's actions with respect to his party affiliation.  His was an accidental victory; something NO ONE saw coming.  I think he's basically a good man, and in this state that will get you prison or worse...much worse.

He's got a sharp mind, too; and i could see some resolution emerging that may discombobulate TPTB -- as B'ham is widely viewed as the first domino in a long series to come.

and this all goes to show how tenuous the whole super-structure is...lil' birmingham alabama -- the soft-belly of a dead and bloated steel industry -- bringin down the bond-daddys.

where the skys are so blue/

and the governer's true,


Sun, 07/17/2011 - 15:48 | 1464293 jbc77
jbc77's picture

The shit is justting hitting the fan everywhere. Here in CT they just axed 7500 state workers because the union voted against taking consessions weeks ago. Now they cry foul in the local rag newspapers. Things are getting sticky boys, no ones spending, state tax revies are bone dry. CT they tried to charge me $39.00 for a fishing license this season, three years ago it was $15 bucks. 

Having watched this unfold for years. It's feeling a little scary now, that pit of the stomach feeling that this isn't gonna end well.

The previous gentle - about the Hummer's in da hood. I privately wondered in the last few years where these underpriviledged blacks were getting these $50,000.00 cars. Everytime I witnessed a brother stylin' I would wonder where they got the credit. I'm surprised we don't hear about the subprime credit market blowing up on all those brotha loans they made.

Sun, 07/17/2011 - 15:49 | 1464300 blunderdog
blunderdog's picture

The popularity of the Hummers shouldn't surprise anyone.

Most of 'em were probably leased.

Sun, 07/17/2011 - 16:52 | 1464495 Mr. Mandelbrot
Mr. Mandelbrot's picture

Extend and pretend, extend and pretend . . .

Sun, 07/17/2011 - 21:10 | 1465100 trav7777
trav7777's picture

no cost is too great to create an artificial black middle class

Sun, 07/17/2011 - 15:51 | 1464306 Silverhog
Silverhog's picture

No power for sewer pumps in a record heat wave. Get down stinky town.

Sun, 07/17/2011 - 15:51 | 1464307 markar
markar's picture

JPM has blood on their hands over this one. Too bad BK won't claw back the ill-gotten gains.

Sun, 07/17/2011 - 16:02 | 1464329 Hulk
Hulk's picture

The creator, wherever he/she/combo may be, is either laughing or crying at this point. Taking a shit was supposed to be free and we have now created unsustainable/unaffordable/wasteful systems for processing our valuable output...

Sun, 07/17/2011 - 16:10 | 1464354 DNB-sore
Sun, 07/17/2011 - 16:16 | 1464376 Debt-Penitent
Debt-Penitent's picture

Yes, but is it aas expensive as divorce?

...and we know why divorce is so expensive - because it's worth it!

Sun, 07/17/2011 - 17:57 | 1464675 Curtis LeMay
Curtis LeMay's picture

Teuro is plunging vs the CHF in Asia even as we speak.

Sun, 07/17/2011 - 17:57 | 1464676 Bastiat
Bastiat's picture

The muni finance landscape is littered with debt bombs fused with derivative covenants.   The whole shitheap almost came undone in 2008 -- the auction rate securities market collapsed and never came back.  There were only one or two banks writing letters of credit (needed for almost all floating rate paper).   Many muni finance directors refused to take the bait but many did--because it was "free money" and "everyone does it so it must be OK."  In California there is an entity called CDIAC -- a state beauracracy with the partial mission of advising and educationing local government issuers on debt and investment matters.  For years they held conference PIMPING derivatives.  When the shit hits the fan, I hope that is remembered.

Sun, 07/17/2011 - 18:01 | 1464689 Bobby Lee
Bobby Lee's picture

There is a fine old Southern tradition called "voting with your feet." Don't bitch. Move.

Sun, 07/17/2011 - 18:25 | 1464756 virgilcaine
virgilcaine's picture

Bailouts are over with, like 2010 and QE. It's time for some pain.


Sun, 07/17/2011 - 19:50 | 1464958 HITMAN56
HITMAN56's picture

TD...whats the best way to be short Munis? Dont think there is an inverse ETF out there. (please correct me if I am wrong)

Sun, 07/17/2011 - 23:07 | 1465342 pods
pods's picture

Oddly reminiscent of "Confessions of an Economic Hitman."

I guess this means we can officially call ourselves a third world bananaless republic?


Mon, 07/18/2011 - 06:45 | 1465675 HITMAN56
HITMAN56's picture

looks like an interesting read Pods...I just ordered it. Paperback about $9 at AMZN. Thanks.

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