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Big Trouble In Little Chi-Town: Illinois Downgraded From AA- To A+ By S&P On Liquidity Issues
The rating agencies have decided to once again remind the world of their pathetic, and decades behind the curve existence. The most recent act: downgrading Illinois From AA- to A+ with a negative outlook. From the report: "The downgrade reflects what we view as the state's deteriorating
liquidity and financial position," said Standard & Poor's credit analyst Robin
Prunty. "Illinois failed to address its fiscal 2009 deficit, which was carried
into fiscal 2010. Similar to many other states, revenues are performing below
originally forecast levels."
In addition, the fiscal 2010 budget was balanced with various spending
reductions and a plan for debt restructuring to provide budget savings; the
savings from both are uncertain at this time. The state has made limited
progress in our view in addressing the current year budget gap, which has
weakened liquidity. Standard & Poor's believes this budgetary gap and the high
reliance on nonrecurring measures to balance the budget make the return to
structural budget balance unlikely for many years.
The negative outlook reflects Standard & Poor's view that, although we
think Illinois has the capacity to restore budget balance due to the absence
of tax limitations or stringent constitutional or legal requirements related
to spending that we see in other states, its willingness to implement
difficult and politically unpopular measures to restore budget balance is
questionable in our view. We believe the state's high reliance on nonrecurring
revenues and the accumulated budget deficit will make the return to structural
budget balance unlikely for many years and will likely continue to pressure
liquidity. The absence of recurring solutions in the next year to deal with
the current budget challenges and begin to stabilize liquidity will likely
result in a further downgrade of Illinois.
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Related story? Perhaps...
Hat tip to The Awl.. http://www.theawl.com/2009/12/german-seniors-still-show-that-can-do-atti...
Rahm...what the phuck? are you asleep at the wheel? it's your turf baby....you better start kicking some serious ass over there at S&P.
But all is well for the United States... They don't have any issues with rolling deficits from 2009 into 2010 at all. It's all good, the feds can borrow on the very short end at ludicrously low rates only to roll their debt into the very gates of hell in a couple of years. I'm sure rates will still be as low as they are now in 2012, 2013.
Go Bears!
Ditka!
Ditka for community organizer, err I mean law school lecturer ("professor" chortle snort haha), err I mean state senator, err I mean accidental US Senator, err I mean "supreme leader."
Okay I can't be the only one who would prefer Ditka right now! If nothing else we would have the full return of the Super Fans. "Ditka vs. Global Credit Collapse? Ditka! Ditka vs. Unsustainable Deficit Spending? Ditka!"
Shit I'd take Ditka even if he was handicapped into only being allowed to use the 86 Bears to fill his cabinet positions.
Mini-Ditka vs. $787 billion Stimulus package... who would create/save more jobs?
Daaaaaaaaaaa Bearsdabearsdabearsdabearsdabearsdabearsdabearsdabears.
Jerry Angelo needs to go
I wish people would stop bashing the respectable state of Illinois. We have one governor in jail, and another awaiting trial.
As for the City of Chicago, good corpution does not come cheap. The City of Chicago has the best corpution money can buy.
Sincerely
I. Post Dailey
Who's making money on the swaps? Could it be Buffet/Goldman?
My inner cynic says: Daley/Stroger
No surprise, Chicago does fireworks twice a week from jun-october, every Wednesday and Saturday. There was about 5 weeks where they did them on Friday too, so a total of 3 days during those weeks. They even did fireworks 2 weeks ago. Personally, I thought they discovered oil under the city, I guess not.
Plus, it's such an affordable, low-tax haven. My 84 y.o. father-in-law pays $40K/yr in property tax--what's not to like?
Dan Proft in 2010! "Illinois isn't Broken, It's Fixed!"
http://www.proft2010.com/
Let us indeed start with da Bears. The Great City of Chicago financed a 1.9 billion $ stadium for da Bears. Did I say Billion? I meant Billion. They play 8 (eight) games a year. Eight. Impossible to pay for this. I would demand full payment from the Bears tomorrow. Cant do it? Well....I , the City now own you. We want our money back now. And thats how the city gets a billion $'s. I have other ideas.
It was not 1.9B. Bears are not the only user of the park district owned stadium.
blame it on blago
I guess Illinois wasn't as good as the other states in using stimulus money to cover their budget shortfalls.
About 1000 more red-light cameras and street cleaning thrice a week should make up the difference.
I need to move.
Downgraded ... By S&P ...
I don't get it : The ratings agencies committed blatant fraud when they rated these MBSs (incl. the ones "structured by cows") , yet they are still cited (by ZH ??!!). Just incredible. What do you have to do in (financial) America to "have had it" ?
Incredible.
Werner
These municipalities just refuse to get real about their compensation levels. Payroll and benefits to muni employees are egregious and will bankrupt one state, city, and town after another.
When working for federal govt., state, city, town, etc. become the most lucrative jobs in society, then said society is doomed.
According to Crain's Detroit, The State of Michigan increased employees in Metro Detroit from 10,791 in 2008, to 10,887 in 2009.
I know this is a small amount. Probably attributable to Gov stimulus money.
But, I though that we would definitely see a decline in 2009 due to the state's budget problems. What this tells me, and I am extrapolating a bit, is that the State of Michigan used Gov stimulus money to shore up the general fund for 2009 in Metro Detroit. But, this short fall will just have to be addressed in the next budget. I guess it depends on the total amount of Gov aid pumped into Michigan.