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Harrisburg Chapter 9 Imminent As Controller Tells Debtwire Bankruptcy Best Option
In what will likely be the first major municipal bankruptcy of the New Normal, Harrisburg is likely about to shut the gates. In an interview conducted with restructuring site Debtwire, the City's controller Dan Miller said Harrisburg would be better off filing for Chapter 9 than trying to restructuring finances under Act 47, the Financially Distressed Municipalities Act. He added that the latter has never solver the problems of any municipality that entered the program and the institution of a commuter tax in Harrisburg to avoid a Chapter 9 would be unworkable. On the other hands, "when reached for comment, long-time opponent of a Chapter 9 filing for the city, PA governor Ed Rendell said Harrisburg officials have not given him any indication that they will seek Chapter 9 protection. Rendell said he hopes that the city "will either sell assets or seek Act 47" before making a Chapter 9 filing." Alas, it appears the nearly bankrupt city has run out of options.
Selling assets such as parking garages, the City Island amusement center and even the Harrisburg incinerator would leave the city in a worse financial situation than simply filing for Chapter 9, Miller countered. The city has not even received any interest from potential acquirers about the incinerator, according to Bill Cluk, a former Harrisburg Authority board member.
Harrisburg has long been entangled in a bitter sale attempt to dispose
of its incinerator, which many have seen as a Panacea for the city's
financial problems. Alas, as Debtwire notes, a sale of the incinerator
would net enough cash to only cover a third of the $280 million in debt
held by the Harrisburg Authority.
The actual date of the filing would likely be in under 2 months: "Miller said that Harrisburg's decision on whether to file Chapter 9 protection could arise as early as mid-September when the city has to make a $3.7 million bond payments."
Yes, you read that right: in some universe parallel to that of the Fed, $3.7 million is still a large number. Considering that total US debt issuance each week is about $100 billion, it is very likely that the Treasury will likely step in on this "one isolated case", followed by another, and another, until the several hundred billion in state and local government underfunding is completely transferred to the Federal balance sheet as well. And why not - it is not like anyone has any illusions that the US can avoid defaulting at this point.
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All they need is $ 3.7 million to stay current ?? Shoot, Barry will burn up that amount in fuel to vouch for former Senators Dirty Harry Reid and Barbara Boxears.
Just give it to them.
Seriously. Can't they sell some real estate and lease it back from the new owner? Why can't these crooks stop crying that they are broke and run the fucker like a business.
Show us your second set of accounting books Harrisburg!
Barry and Michelle will not come to your house and kiss you goodnight.
Jeb or GW might come by and do your wife cause you sure aint doing her.
Well it's just funny when you see so many idiots blaming BO for being liberal, when he's actually more right wing the Reagan. So whenever a republican is bashing Obama, in a sense they're bashing reagan.
Me I always hated Reagan's idiocy, especial never-trickle-down economics. I was in grade school then, and even then I knew that was complete shit.
I'll call out Obummer for the fascist Neo-con imperialist corporate whore Nero he is.
Junked. Incoherent.
F%$king dumbass tard.....junk. Who let the pillow biter in here?
dam jmc, it looks like you just took some rational (albiet odd) ideas and threw 'em in a blender.
that's just some seriously messed up idea munging going on in there...
(not sure if it's good or bad - a little of both, but do everyone a favor drop the party stuff - D/R - no diff anymore - your ideals stand better without a label)
BTW, what's wrong with the queen, anyway?
Please don't get me started on Sharron Angle. I'm severely disappointed with Obama and the Democrats, but a pinhead moron like Sharron Angle reminds me of exactly why I vote for Democrats.
Angle is a right wing lunatic - abolish Social Security and Medicare, and no abortion for any reason - not rape, not incest, not to preserve the mother's life.
As bad as the Democrats frequently are, it is gnat-brained morons like Sharron Angle that keep me voting for Democrats...
there *are* other parties you know.
when you vote for the lessor of evils, you still get evil...
but i'm glad you vote. it gives us that do a right to complain, if nothing else.
i'm still not sure how the religious right got the various conservative parties by the g'nads. tragic.
Why is it lunacy to advocate abolishing SS and Medicare?
Note: the only person to mention Sharron Angle is...you. Looks like you got yourself started...
Fast Eddie Rendell, dipshit that he is, should stick his head back up his ass, be run out of office for doing absolutely nothing but introducing toxic gambling in to the Commonwealth as one of his "accomplishments" (as requested by his masters), and get permanently lost. He is a charter, founding, and rank and file card-carrying member of the A-Hole Club. State Capital filing for bankruptcy - a disgrace!
I'll bet they love Eddie in Atlantic City !
Soon all the States will set up their own gambling zones. CA foolishly gave up that game to the reservation Indians. But their backup plan to hit the jackpot is the legalized reefer initiative to be voted on in November. Then we'll be on our way to the new economy.....a broad selection of legalized vice competitively priced, from sea to shining sea.
Ahh, your last sentence, visual poetry...
It's been a VERY long time since I did reefer. They tell me it's much stronger now.
CA also sold the future revenue stream from lottery sales. LoL. Talk about being strapped.
Listen, Arnold, I represent a group that wants to purchase the the California State Capitol building in Sacramento.
We will purchase it for $100 million and lease it back to you with very, very easy terms. We just want 3% of all current and future "transactions" legislated on the premises*.
The lease will have a chase clause, if you move legislation to a different location the lease will chase it and be enforceable.
As I've said a couple of times today elsewhere, it amazes me how little time the MSM focuses on the slow train wreck that is municipal finances. Every now and then (even Buffett) someone talks about what will happen if the entire market for muni's freezes up. Virtually every municipality (city, state, county, school district) is upside down right now, lower taxes, higher expenditures, smaller property tax base, unfunded pensions, etc. Layoffs, cost cuts, tax hikes all equal economic slowdown, which equals a liquidity/austerity/solvency crisis. Of course, TD is being facetious, but the Fed can't answer to the thousands of open hands that would result from one handout. For me, this just might be the second stage to the slow unwinding of the social fabric (the first being the bailouts, moral hazard, and mortgage modifications).
(1) Every now and then (even Buffett) someone talks about what will happen WHEN the entire market for muni's freezes up.
There fixed that for you.
(1.1) ...and they shit themselves in horror and move on to something less terrifying.
(2) Of course, TD is being facetious, but the Fed can't answer to the thousands of open hands that would result from one handout.
Oh, TD, is not being facetious at all. The Fed will absolutely step up to the plate and monetize ALL of the muni toxic trash, including the Harrisburg Incinerator.
Maybe they could start selling off some of their subjects? I was going to buy me a Greek, but due to the language problem I held off. Would be great if I could pick a cheap Pennsylvanian. Cheaper shipping cost too!
I was thinking the exact same thing. I think a Pennsylvanian may be more personable than an Illinoisan, but I'm hearing Illionois is selling folks 40% cheaper than Pennsylvania.
Bankruptcy is the best option! No more servitude to the banksters.
"Bankruptcy is the best option! No more servitude to the banksters."
Pretty clever tagline - but shows how clueless some can be. The banksters no more hold any of this municiple debt than they hold piles of garbage in the lobby. The banksters "assist" in the creation of the muni bonds and help in the offering (sale). They have already made their money, they are not going to care one bit if these bonds are defaulted on. The people most injured by a default on these bonds are likely to be the ones who can least afford it - retirees and others who needed to invest in "secure" and "stable" value bonds.
Are you trying to compare this to personal bankruptcy - with total discharge of debts? Different animal entirely.
+1
I am more than willing to fund them with 3.7M; of course it will be in the form of a 30y bond with 20% coupon/22.5% yield. Non-callable bond that is.
yeah and they can pledge a very famous power plant as collateral. licensed to operate until 2034.
http://www.youtube.com/watch?v=n-c1PrCLaRw
+++, CB
when the simple interest on an average mortgage goes back up to a more rational risk/return level of 9+ percent for the average buyer in today's market, i might start to believe that the squids have surrendered and we're back on the road to some semblance of a recessionary/market recovery.
'til then... another round o' popcorn please.
It will be interesting to see what happens with cities and counties now that we have reached this stage of the killing. The fascist US government, along with Majors (banks, car corporations, etc) need to be kept afloat, but the cities and counties can be taken to the cleaners. So what is so important about corporate America, Mr. Obama, that you need to maintain it, but not the cities and counties that once sustained it?
This, and we have Schwarzenazi telling all State employees to take massive paycuts. Mr. Schwarzenazi, how will these people make their home and car payments now that they are living on minimum wage? How will we sustain our (former) way of life?
The kleptocrats' moves are telling; they wish to destroy what America was made to be. They wish to destroy the dynasty of the people, and establish one for the Dinosaur Kings.
Lennon, I would make a bet that the wages of the Cali congress did not become minimum wage. Screw the little guy. Does anyone know the answer to that question?
I do not know; but that, my friend, is a great point!
Dunno if I agree with you on this one. I think the minimum wage should be the maximum wage for anyone getting a government paycheck.
Let the Muni defaults begin. Let private industry provide "governmental services" (god, what an oxymoron) and we'd determine real fast which ones we really want.
Think UPS vs USPS.
Public vs Private is summed up for me very easily. I know where I'd rather take a shit.
But I think TD is right, we're gonna print...
Here is the paradox: We are a fascist state, so when we make the move from government run entities, to private, it will not be the normal business that thrives, it will be the Imperialist Corporate entities. This is why a repudiation of the 14th amendment is necessary now, to make sure that our next move, which will happen very soon, is not into corporate servitude, but back in the hands of the people. That is why the the kleptocrats did it backwards; they should have let the Major Corporations fail (GS, JPM, GM, etc) and then bailed out the states-if they were to bail anyone out at all. And if the Majors were made to go bankrupt, I would have no problem telling Harrisburg et al to go get a life; public spending is out of control. But at least public sector jobs employ Americans (as lazy as they are). Corporations employ Indians (food stamps) and computers (HFT), so there is no monie moving back into the American system from corporate behavior. This and now corporations will inherit the Land, as was The Plan all along.
And the USPS is a (fascist) corporation, but no need to split hairs. And UPS, great example, and exactly my point.
Concur. I was going off on my own Pub vs Priv rant.
But I think that when us little peeps (as in overloaded local gubermints) do feel the pain then maybe, just maybe, we'll start doing the math. Household, Community, City, County, State and then Nation.
Some bottom up vs top down is long overdue.
I feeling all hopey changey.
Exactly; we the people.
I can make it even simpler:
Should not have bailed any of them out, not in the past, not now, not in the future.
Live within your means! If not, bankruptcy for you, let your creditors pick up the pieces and move on.
Yes, we should not have "let" the housing/credit/tech/FIAT/bullcrap bubbles happen in the first place (or rather been tricked by the Majors), but we did. So then after, we should not have bailed them out...but we did. So, even though I would have bailed out States and counties if I had to bail someone out, I still would not have wanted too.
And DoChen, I can tell from your empathy lately that you understand we have no good choices in front of us. Fortunately for all of us, we have leaders like you who will be constructive during this new epoch, which we are about to be cast into headlong.
DoChen, I know that we can count on people like yourself, and all the other respectables here. And this is what it will take to make it out from under this catastrophe; it will take the community.
Namaste ~
People that work for the government are the worst of the worst. The get high pay for usless intrusive work. While sucking up more and more of our money. The sooner 90% of them are fired, the better.
These cursed municipal employees annoy the hell out of me with all the noise. First the garbage trucks smash and bash all morning. Then the damned fire department shows up with their noisy engines. And before you know it, the bloody cops are roaring around with their sirens blaring for no good reason anybody can see.
And the damned water and sewer system, with their digging up the streets just to replace some 100-year old pipes that THEY were too damned cheap to fix YEARS AGO. As if I care that the stupid main water line has burst.
And don't get me started with the damned kids making noise heading to and from their stupid schools every weekday. I don't even HAVE kids, and I sure as HELL don't want somebody else's kids able to read and write well enough to fill my prescriptions, cash my checks and replace my hip. If other people want a literate society, let THEM pay for it.
And I'm pretty sure things would be a lot easier for a lot of people if we'd just close down the stupid jails and let everybody go free, except for those damned pot smokers they have in there, of course.
It's stupid to be spending money on taxes when we could be giving it to multi-national corporations to provide these services from somewhere in India or the Grand Cayman Islands where they know how to get things done.
Cute, Dr. Sandi, but...
Ah, never mind. Need to get some sleep before the choppers roll in.
Be well.
yo doc,
i do think all of those 'needless' services would be managed more efficiently if the local muni-providors had some real-world accountability to nudge them a bit.
most of these municiple monstors really need to go on a diet, but somehow they keep the keys to the community-paid pantry under their pillow.
it's when you see 13 guys watching a back-hoe fix that hundred year water main that you start to wonder about their 42 sick-days, 15 paid holidays, 3 weeks paid vacation, county car, and 80% pensions that start at 20 years of vesting (avg 43 yr retiree), all guaranteed by working folks that don't get nearly that kind of safety net...
balance is key, and most folks are just realizing how outta balance things are. fundamentalism is a natural response, so long as it doesn't get outta hand.
No disagreement on that. But the 90% useless figure twigged my response mechanism.
A lot depends on where you live. I'm in a small city. I see some waste here, but not the kind of abuse that is blythely tossed off as normal by cavemen who don't believe civilization is a good idea.
Yeah, it pisses me off that the cops around here get a free police car to drive to and from work. I'd like one too, please. And last night, I saw 5 police cars loitering at the arrest of one man who was already cuffed and sitting on his hands. Obviously we have too much cop budget, at the expense of things that are actually needed.
Stupid and wasteful, and smacking of a police state. But I'm glad we have those thugs on our payroll instead of working free-lance for the highest bidder.
If we don't work together to create something bigger than each of us, then we're just little monstrosities killing our closest neighbors for scraps because we can never do any better than subsistence on our own.
Government of some kind is the only sane answer. And sane government is the only sustainable answer.
I'm perfectly okay with large groups of "concerned citizens" gathering together to rectify deep-set corruption in their local community with constructive use of rope or sharp implements. I think that's a fine justification for cities to have active tree planting programs.
And if the weasels in charge have already stolen the tree budget, well, that's why we have power poles and street lights, where the miscreants can dangle and dance to OUR tune for a change.
But of course, a lot of places have Boss Hogg in charge. Apparently, people put up with it because they believe they can get favors from Boss. And you can, kind of like putting ten bucks into a vending machine and getting a shiny new quarter down the slot in return.
Yeah, as a group, we hoomans are really too stupid to live. But I still have hope alive in my heart that somewhere, Santa Claus is shacked up and living in sin with the Easter Bunny.
to be honest, the 90% number weakened the writer's sentiment for me as well. and i believe i read your original response with the proper tone, as well. (i smiled when i read it.)
cherry picking of examples (like my back-hoe example), and broad stroke generalizations will probably be the end of us silly beings, as we clearly have a hard time dealing with the grey of life when we thrive on black/white.
i hope i don't shatter your reality when i tell you i heard santa was in one of paris hilton's vegas suites with the tooth fairy, and that she's actually a 'he'...
you seem like one who can handle the truth...
"So what is so important about corporate America, Mr. Obama, that you need to maintain it, but not the cities and counties that once sustained it? "
That would all change if they had contributed to his election campaign!
It sounds like a good idea. Chapter 9 is just a reorginization, not a liquidation. Bondholders take a haircut; bonds aren't risk free. PLUS a judge could approve to renegotiate union contracts.
See what happened in Vajello, CA? Cops actually got a pay raise in Chapter 9. City had to close a couple fire stations and lay off some cops, but the rest got a raise. I know it to be true because CNBC told me so.
Let me guess, without reading anyones posts Ed Rendell is a Democrat?
That would be correct.
But, would it matter if it was repub? Both parties have spent non-existent money like drunken sailors.
We members of the military or former military members take umbridge with the comparing corrupt politicians spending money they don't have to "drunken sailors" or "drunken G.I.s", etc. A member of hte military might borrow a little from a buddy for the weekend, but will repay at the next payday. When has a politican every repaid at the next payday without borrowing more.
Agreed.
Drunken sailors are spending their own money, not someone else's.
That emphatically cannot be true.
Fast Eddie just signed up the state borrow another $10,000,000 to build the Arlen Specter library in Filthydelphia the money to be used to pay off the bribes for those in and out of the state who backed Specter's spending bills.
No politician would be claiming bankruptcy for his own city, when another city can fritter away $10,000,000 of money taken from the state's citizens on something that is a corrupt payoff to Arlen's supporters, now would they?
Arlen "Magik Bullet" Specter paid his dues, he will be rewarded.
Move along....
http://www.prisonplanet.com/articles/may2007/030507jfkconspirator.htm
Veiled and yearning, Isis stays in her cave.
Oh $$, my $$, will you not join us outside? We dance, we are merry, and for you we abide!
What's their Moody's rating? AAA? LOL
AAA+ dont forget the PLUS LOL
I just spent over a week in the Pennsylvania Allegheny National Forest with 10,000 hippies celebrating our yearly gathering. We create a city overnight deep in the woods. We handle all our own sanitation, water, food, minor health issues and security. Yes the rangers are always there, and they are very cool and nice. However, it seems that the governor has enough money to send nearly a hundred state officers in riot gear to patrol us. Then there was the helicopter they used everyday to harass us. That little helicopter costs 5000 an hour or so. So I figured that the state just wasted about 100K or more to watch hippies deep in a forest.
Nonetheless it was a great gathering and a wonderful different perspective.
Holy moly, great name!!!
And great story.
At first I saw the eyeball, then I read the name and chuckled.
You got your own mini-me.
Maybe "eye" am the mini me....as he was here first.
Parallel universes converging....
Well, dip my balls in milk and bring on the kittens.
Eye do apologize for the oversight.
We handle all our own sanitation, water, food, minor health issues and security.
Private industry. Bravo. (see post above).
Even hippies get it.
Re: Helicopters - I live in Boca Raton. For some gawd awful reason the choppers fly in the wee AM nearly everynight scaring the bejeebus out my dog and waking me and the sexier one in the process. For what? Jews launching rockets at the Turnpike again?
Dude...totally jealous I missed Rainbow....hope it rocked.
Hmm... Viagra and saggy tits. Probably not like it was back in '68.
Saggy tits taste good too. Did I say that out loud?
"I think the minimum wage should be the maximum wage for anyone getting a government paycheck."
That guarantees the minimum wage will be $72.50 per hour within a month.
now who the heck junked Breaker?
i thought that was the perfect and obvious response... at least from what i'm seeing go on 'round here!
heh
If you actually think the average state employee makes anywhere near $70 per hour, you've either never worked for the state or you were a politically appointed crony when you did.
So Harrisburg enters a new chapter in its history. It won't be the last. Not by a long shot. The Long Emergency continues...
Zactly.
Dan Miller is about the only person with any sense in this administration. These properties actually generate revenue and the city would most likely give them away.
Wonder what those incinerator bonds that are behind Harrisburg's impending default (the city guaranteed them--issued by the quasi-independent local utility company) were rated? I bet it was AAA all the way. Gee, let's build a giant trash burner to make some steam for $300 million dollars... it's only $7100 per freakin resident, big whoop! Just another part of the big dumb debt orgy. But just think of those delicious, juicy transaction fees. Political fail, bond rating fail, reality fail.
They need an infusion of ObamaCa$h!
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