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Illinois Postpones $3.7 Billion Bond Sale

Tyler Durden's picture




 

As another day passes, we get another confirmation that that racist, unpatriotic, communist traitor Meredith Whitney is absolutely right in claiming that US states are beyond rescue. Illinois, which was supposed to deny all the naysayers, by successfully issuing $3.7 billion in bonds and purchase a few months of breathing space for its insolvent pension funds, courtesy of an underwriting syndicate that includes Morgan Stanley, Goldman, Sachs & Co and Loop Capital Markets on Thursday, has just announced this, uh, isn't going to happen. Reuters notes: "Illinois' sale of $3.7 billion of pension bonds has been delayed until next week to give potential buyers time to go over Governor Pat Quinn's fiscal 2012 budget, a spokeswoman for the state budget office said on Monday." And the validation for the delay just takes Goebbels to a whole new degree:

"We are receiving a great deal of international interest on these bonds. It is only appropriate to give investors time to digest the governor's budget speech which is Wednesday," said Kelly Kraft, the spokeswoman.

Could one inquire where this international interest is coming from: Greece? Portugal? Spain? Ireland? Italy? Egypt? Tunisia? Algeria? Libya? Bahrain? oh wait, it must be Saudi "on the verge of revolution" Arabia, or Ch"we just changed our food CPI weighting"ina, or Bang "stock market is down 10% for the 4th time in a month" ladesh, or, best of all, bankrupt Japan? Inquiring minds really want to know.

The logic goes that since the rest of the world rescued Illinois a year ago, before the world itself was bankrupt, the broke state can pull it off again. Uh, no.

Illinois is turning to pension bonds for a second year in a row to raise money for its payment to state employee pension funds. A $3.46 billion bond sale in January 2010 was oversubscribed and attracted buyers from Europe and Asia, according to state officials.

Since then, however, the state's deteriorating financial condition led to bond rating downgrades as Illinois ended fiscal 2010 in "the worst fiscal position in its history," according to the state comptroller.

Last month state lawmakers passed a hefty increase in income tax rates to stave off a projected $15 billion deficit heading into fiscal 2012, which begins July 1.

Perhaps if Illinois has a huge snow storm between now and next week, when the bond sale is postponed again, the state treasurer can use that good, old (anti)climatic mainstay. In the meantime, we can all just bash Whitney for telling the truth...

 

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Mon, 02/14/2011 - 20:16 | 961856 Rainman
Rainman's picture

China would love to buy Chi Town. Assimilation of the governing doctrine would be seamless. I say win-win.

Mon, 02/14/2011 - 20:22 | 961881 Misstrial
Misstrial's picture

Yep, the bribery culture in one is the same as the other; hence, no learning curve.

~Misstrial

Mon, 02/14/2011 - 21:38 | 962131 chopper read
chopper read's picture

Joe Bond Buyer has broken up with Illinois because she's a total cheat, but Illinois claims she didn't want to go out with Joe anymore anyway, so there.

Tue, 02/15/2011 - 00:02 | 962554 Thomas
Thomas's picture

They ain't truthful. A little rant on the topic with a solution at the end...

http://forums.wallstreetexaminer.com/topic/935291-truth-squad-20/

Tue, 02/15/2011 - 07:00 | 962903 Cash_is_Trash
Cash_is_Trash's picture

I present to Chicagoans the Chairman of the Politburo for Crook County, Your Supreme All-Knowing High Chancellor and Right Honorable Rahm "Supreme" Emanuel, Major General of the Israel Defense Forces.

Whom will save you all, in turn for your silent obedience...

Mon, 02/14/2011 - 22:38 | 962344 gmj
gmj's picture

This is what Meredith Whitney will look like in 30 years:

http://nymag.com/daily/intel/2011/02/the_meredith_whitney_virus.html

Tue, 02/15/2011 - 06:19 | 962891 Cognitive Dissonance
Cognitive Dissonance's picture

This is why I love photo shop. From the article you posted.

I looks like someone has been peeking at Banzai7's work. :>)

 

Mon, 02/14/2011 - 22:47 | 962366 gmj
gmj's picture

The interest is coming from Hosni "I hate those goddam Swiss" Mubarak.

Mon, 02/14/2011 - 20:24 | 961897 ReallySparky
ReallySparky's picture

I am laughing so hard, "Could one inquire where this international interest is coming from: Greece? Portugal? Spain? Ireland? Italy? Egypt? Tunisia? Algeria? Libya? Bahrain? oh wait, it must be Saudi "on the verge of revolution" Arabia, or Ch"we just changed our food CPI weighting"ina, or Bang "stock market is down 10% for the 4th time in a month" ladesh, or, best of all, bankrupt Japan? Inquiring minds really want to know."

Thanks Tyler, that was too funny.

 

Hell who knows, maybe they are waiting for Rahm to roll into the Mayor's chair. Rahm's got lots of loot, he will buy it all.

Mon, 02/14/2011 - 20:25 | 961901 monopoly
monopoly's picture

It just drives me nuts. Instead of cutting pensions, any legal way they can because they cannot afford to pay them and go deeper in the hole each month, they issue bonds,  and make it even worse for state finances.

What is so difficult, we cannot afford to pay you these pensions, medical benefits, negotiate cuts or we will file for bankruptcy. Anyone with a set of balls out there.

Beyond words.

Mon, 02/14/2011 - 21:48 | 962161 Cleanclog
Cleanclog's picture

Spot on - where is the leadership.  No wait, I'm gonna go have a fancy bottle of wine and lobster tail tonight and tag its cost onto my mortgage.  Enjoy it tonight and maybe pay it off in 30 years. 

Mon, 02/14/2011 - 20:29 | 961910 mynhair
mynhair's picture

Next threat is no rainfall, bringing lake levels too low, for all the escapees to get the flock out.  And ODummer .....why bother.

Just rate the articles.  Only 2 votes so far.

Mon, 02/14/2011 - 20:26 | 961913 Cleanclog
Cleanclog's picture

The assault on Meredith Whitney as "ludicrous, irresponsible and reckless" is so flippin assinine. Isn't it irresponsible to perpetuate the myth of how fine everything is?  The collusion going on in the debt and equity markets now is simply incomprehensible . . . except that it is happening right in front of us.  

I love that she is "self interested" because she touted her opinion on 60 Minutes, but it is okay for Bill Gross, PIMCO, and muni bond brokers and underwriters to call her bonkers - cuz that isn't self interest.  

My oh my what dangerous webs we weave.

Mon, 02/14/2011 - 21:12 | 962064 Pants McPants
Pants McPants's picture

Hey, there's no honor in being honest!  If you're going to loot, make it big n' most importantly - make it public!

(kidding aside I completely agree with you.  We can't have truth these days, why, that'd cause panic)

Mon, 02/14/2011 - 20:29 | 961920 Hedge Hunter
Hedge Hunter's picture

Hu wants Chigago?

Hu's your Daddy.

Hu's my Daddy.

Mon, 02/14/2011 - 20:49 | 961988 plocequ1
plocequ1's picture

Hu gives a fuck?

Tue, 02/15/2011 - 00:04 | 962562 Thomas
Thomas's picture

Hu let the dogs out.

Mon, 02/14/2011 - 20:59 | 962020 jez
jez's picture

This is his chance.

Hu's on first.

 

Mon, 02/14/2011 - 23:52 | 962520 UncleFester
UncleFester's picture

Today Hu are Hu, that is truer than true. There is no one alive who is Huer than Hu!

Tue, 02/15/2011 - 02:33 | 962773 dumpster
dumpster's picture

whu's a chinaman ?

Tue, 02/15/2011 - 02:37 | 962777 Bananamerican
Bananamerican's picture

no, Wen......

Mon, 02/14/2011 - 20:32 | 961927 Dr. Gonzo
Dr. Gonzo's picture

That's nice of them. Don't want a few greedy billionaires hogging all their Pension bonds. Giving the little people a shot at owning a piece of the Illinois Pension Pie. I have a few dollars laying around that I was going to invest in some gold coins this week. Now that I know about this hot deal I'm going to use the money instead to buy Illinois Pension Bonds. Thanks for the heads up Tyler. I just hope I can get my bid in time before they are all spoken for.

Mon, 02/14/2011 - 20:44 | 961972 dark pools of soros
dark pools of soros's picture

the pensions might be unsustainable but before anyone cuts them, they should jail all those bailed out bankers that bribed and shafted their way into destroying those pension funds..  until you burn goldman, jpm, etc, they will continue to destroy everyone and convince you that others can persish but never them...

 

Mon, 02/14/2011 - 20:34 | 961931 mynhair
mynhair's picture

Now that the 'Patriot' act has been renewed, can we have roving wiretaps on Hu is interested in this IL crap?

Just shoot me now, please.  And I ain't Mark.

Mon, 02/14/2011 - 20:35 | 961936 MsCreant
MsCreant's picture

I believe them. 

You print and buy my bonds, I print and buy your bonds. Then we are in Bondage together. Gotta give them time to see if folks believe the govenor's performance or if they see it as a bunch of bullshit. If it seems plausible, buy, buy, buy.

If the Fed can buy from the Treasury (via PDs) and hold them on it's balance sheet, why can't the CBs pretend to bail each other out forever. 

Fiat forever Bitchez.

 

 

Mon, 02/14/2011 - 20:37 | 961943 Hephasteus
Hephasteus's picture

I still don't know which is funnier. That the entire US debt was about 20 billion in 1933 or that the state of illinois now has that much debt.

Mon, 02/14/2011 - 20:55 | 962007 Fred Hayek
Fred Hayek's picture

Thank god the Fed has a mandate to keep "stable" prices otherwise there might have been ludicrous net inflation in the interim.

Mon, 02/14/2011 - 20:56 | 962013 cougar_w
cougar_w's picture

Then we are in Bondage together. 

And our agreed safe-word is "default". Now where did that cat-o-nine-tails go?

Mon, 02/14/2011 - 20:59 | 962019 mynhair
mynhair's picture

huh?

Tue, 02/15/2011 - 00:00 | 962544 UncleFester
UncleFester's picture

Long term, the Treasury will introduce another fiat debt instrument to compete directly with the FRN at parity.  The FRN and all previous contracts based on it will die on the vine.  Yes, it is default but they won't call it out in plain English. 

Mon, 02/14/2011 - 20:39 | 961952 jtmo3
jtmo3's picture

"Could one inquire where this international interest is coming from: Greece? Portugal? Spain? Ireland? Italy? Egypt? Tunisia? Algeria? Libya? Bahrain?"

 

Silly...it's coming from the Cayman Islands.

Mon, 02/14/2011 - 20:39 | 961956 f16hoser
f16hoser's picture

Can't Play if you don't Pay! That's what Blago said......

Mon, 02/14/2011 - 20:40 | 961959 f16hoser
f16hoser's picture

Ok, who want's to be Mayor????? Buy a bond.....

Mon, 02/14/2011 - 20:42 | 961969 vas deferens
vas deferens's picture

It is funny how the people that accurately predicted financial events over the past 15 years are shunned. The people that have missed everything over the past 15yrs are allowed to scream from the highest mountain day after day.  

Paul Volcker, praised for saving the economy in the 1980s, is pushed out of office this year.  People don't like the truth because the truth will hurt in many ways.  

Mon, 02/14/2011 - 20:58 | 962017 cougar_w
cougar_w's picture

Or the truth will cost someone money. Or cost someone re-election.

The truth always was over-rated. Better just to make shit up as you go and anyone calls you on it can suck it.

Mon, 02/14/2011 - 20:56 | 962012 Miss Expectations
Miss Expectations's picture

If I was Whitney, I'd have cleared my calendar and told Congress I could be there in 15 minutes.

Mon, 02/14/2011 - 21:00 | 962024 mynhair
mynhair's picture

Ya, rag on those bastards.  I'd even pay for it, if I had pay-per view.

Mon, 02/14/2011 - 21:25 | 962084 vas deferens
vas deferens's picture

Whitney was going to get grilled in front of congress for her "lies". It was a witch hunt.  With Moodies, S&P, and Fitch grading all these bonds over investment grade how dare she have any other thoughts about the quality of these bonds.  Congress needs the bonds to be rolled over and over always increasing in the debt size.  Whitney was attacking Congress and their re-election bid and Congress can not have that. 

Tue, 02/15/2011 - 00:12 | 962578 UncleFester
UncleFester's picture

Whitney is...(enter stage right, cue evil music)...the Bond Vigilante! She must be destroyed.
http://krugman.blogs.nytimes.com/2010/06/28/the-invisible-bond-vigilante...

Mon, 02/14/2011 - 21:01 | 962025 silvertrain
silvertrain's picture

 Was it those fuckers that sold the city parking meters?

Mon, 02/14/2011 - 21:02 | 962027 Seasmoke
Seasmoke's picture

how do you say Chicago Cubs in Mandarin ?

Mon, 02/14/2011 - 21:49 | 962165 Stoploss
Stoploss's picture

"Chicago Cubs".  The number one language to learn in China is english. No language barrier makes it easier when they come to collect.

Tue, 02/15/2011 - 02:21 | 962759 I Am The Unknow...
I Am The Unknown Comic's picture

shibàizhe

 

 Curiously, it is also the same word used for Rahm, Daley, Obama as Illinois Senator, the State of Illinois, and the Illinois Teacher's Pension Fund.  Isn't it odd how Chinese has so many different meanings?

Mon, 02/14/2011 - 21:04 | 962040 km4
km4's picture

Is this primary reason why Rahm "Wall St hedge fund' Emmanuel is running for mayor of Chicago

Mon, 02/14/2011 - 21:13 | 962067 mynhair
mynhair's picture

No.  Rahm is running because the Sheeple of Chicago are morons, have always voted for morons, and outlawed guns so those few non-morons couldn't remove the majority.

Mon, 02/14/2011 - 22:01 | 962209 Dr. Sandi
Dr. Sandi's picture

I would think that a screwdriver in the eye socket would do the job if a gun's not handy.

"I'm here to fix your liquor cart, sir. Oooh, sorry! Better put some ice on that."

 

Mon, 02/14/2011 - 21:19 | 962079 ejhickey
ejhickey's picture

there is a connection but I am not sure exactly what it is.  However all should become clear clear after (s)election on 2/22/2011

Mon, 02/14/2011 - 21:11 | 962062 HoofHearted
HoofHearted's picture

My guess is that it's the ECB who wants in. They have bought all the shit from the euros who are going under, so why not buy Illinois' debt too?

Mon, 02/14/2011 - 22:42 | 962356 azusgm
azusgm's picture

Could be Soc Gen wanting to be first in line to buy all the CDS anyone else will write.

Mon, 02/14/2011 - 21:20 | 962075 fasTTcar
fasTTcar's picture

Re:  Cubs in Mandarin From Wikipedia:

 

Useless
Mon, 02/14/2011 - 21:21 | 962081 prophet
prophet's picture

Oldman Sac and Company?  What the hell kind of name is that? 

International interest is probably coming from a combination of those who own significant assets in IL and the ECB as FRB (via GS and RE) calls in a chit for the dollar swap lines.

Mon, 02/14/2011 - 21:28 | 962099 GlassHammer
GlassHammer's picture


I take it these investors know what a bond is but are more than a little confused about Illinois. 

 

 

Mon, 02/14/2011 - 21:37 | 962127 Sean7k
Sean7k's picture

Maybe it's the domestic corporations that need a way to get their money back into the states. They just launder it through the Illnois Pension Fund Bonds. 

Mon, 02/14/2011 - 21:38 | 962130 LostWages
LostWages's picture

I think it is Canada.....only they will want to move the Blackhawks to Winnipeg to complete the deal.

Mon, 02/14/2011 - 21:53 | 962181 sleestak
sleestak's picture

There are no US tanks in Baghdad!

Mon, 02/14/2011 - 22:52 | 962374 Matt
Matt's picture

They are hundreds of miles from Baghdad! in the east, the west, the north and the south, we are defeating them. -Baghdad Bob

Mon, 02/14/2011 - 23:19 | 962436 Hephasteus
Mon, 02/14/2011 - 22:48 | 962368 nmewn
nmewn's picture

Saaay...dis is ah nice little state youze have heah...be a shame if sumpin were to happen to it eh?

Mon, 02/14/2011 - 23:01 | 962397 Arthur
Arthur's picture

Not too proud to be from Illinois now.

Governor Quinn sucks as does the true political power in the state, Mike Madigan, the speaker of the Illinois House.  The both made a deal made a deal with the public unions locking in their pensions for the next few years in return for their support.

I voted for a true dip of a Rebulican in the hopes Quinn would lose.  Unfortunately the right wing of the Rebublican party dominates in Illinios and they are social conservatives who would rather vote for a losing anti-abortion candidate than a middle of the road socially, fiscally conservative Republican.  

Senator Kirk barely won his primary yet took Obama's seat, showing that the majority of Illinoians are reasonable and pragmatic.  Too bad the the people have a hard time getting moderate candidates through their respective parties primaries.  We have f*cked ourselves pretty good here in Illinois.  

It will be interesting to see if Rahm breaks out the hatchet in Chicago and attacks the entrenched public and private pigs who are feeding at the public trough.

I hope the bond deal fails so the politicians have to act now.

 

Mon, 02/14/2011 - 23:07 | 962409 ClassicalLib17
ClassicalLib17's picture

I live in a northern Illinois community and our city budget has a 10 million dollar hole to fill and the police and fire pensions are only funded at 39 and 40 percent, respectively. Of course those same city employees are paid 77,000 and up, 9 paid federal holidays, 12 sick days, retirement age of 50, and increasing weeks of paid vacation according to years of service. But everything will be ok now because our democrat dominated state legislature rammed through the civil unions bill in the lame duck session last fall. God help us

Mon, 02/14/2011 - 23:18 | 962434 SunSword
SunSword's picture

Governor Quinn won 4 of 102 counties. Half his vote came from Chicago. The income tax increase came 10 hours before the Republicans took over the legislature.

The dirty secret -- look at WHO is going to collect those state and county pensions, and where they live. Now. Imagine what will happen if they all get told their pensions are cut in 1/2. Or zeroed out and they get a cash contribution plan for current employees.

Mon, 02/14/2011 - 23:57 | 962533 penisouraus erecti
penisouraus erecti's picture

Ah, Illinois, home sweet fucking corrupt home........

Tue, 02/15/2011 - 00:01 | 962550 Bruno the Bear
Bruno the Bear's picture

Bang De Ho Illinois needs you!

Tue, 02/15/2011 - 01:21 | 962673 gwar5
gwar5's picture

Phone rings in Chicago...

Bang Dai-Ho: Her-row, Governor Quinn? It me, Bang. Me want buy bonds.

Quinn: That's terrific Bang!

Bang Dai-Ho: First, me want know... how you pay back?

Quinn: Well, I happen to be personal friends of the president. He assures me of a bailout.

Bang Dai-Ho: Oh, me know him. He bigger pimp than me!

Quinn: Well, what do you say?

Bang Dai-Ho: Oh, must be sure thing. First, me must call advisors Yu Fat-Priku and Ya Moma-Ho.

 

 

 

 

 

Tue, 02/15/2011 - 00:03 | 962558 PulauHantu29
PulauHantu29's picture

I hope she displays the same hubris the banker CEOs did before Congress. They need a strong dose of reality.

Tue, 02/15/2011 - 00:09 | 962572 PulauHantu29
PulauHantu29's picture

Illinois needs to raise state income taxes 100% and property taxes 50% to pay for their insolvent state pension plans. I suspect Americans will go bezerk if the Feds bail Illinois (or any other state) out. Just my guess but people I see are still pretty upset over non-stop Bank Bailouts.

Tue, 02/15/2011 - 00:46 | 962624 Josh Randall
Josh Randall's picture

Illinois is trying to sell Bingo cards when the fat woman over in the corner of the room is already one "I-27", "N-46", or "O-61" away from winning the game.

Tue, 02/15/2011 - 01:22 | 962676 gwar5
gwar5's picture

Phone rings in Chicago...

Bang Dai-Ho: Her-row, Governor Quinn? It me, Bang. Me want buy bonds.

Quinn: That's terrific Bang!

Bang Dai-Ho: First, me want know... how you pay back?

Quinn: Well, I happen to be personal friends of the president. He assures me of a bailout.

Bang Dai-Ho: Oh, me know him. He bigger pimp than me!

Quinn: Well, what do you say?

Bang Dai-Ho: Oh, must be sure thing. First, me must call advisors Yu Fat-Priku and Ya Moma-Ho.

 

 

Tue, 02/15/2011 - 01:40 | 962709 Milton Waddams
Milton Waddams's picture

It's a bit of a conundrum.

On one end they are dumping revenue-neutral-or-better assets to connected parties and on the other end they are attempting to float debt. It works until demand for the worst of the worst asset dries up.

These politicians need to be reigned in. They are predictably myopic and understandably so. But that does not excuse their blatantly corrupt behavior.

Corporate LOLmerica has a, admittedly flawed (see option back-dating scandals), reasonable solution for this. If a politician promises something and it doesn't work out- claw back EVERYTHING. The promise expired worthless. If it does work out, hook'em up with whatever.

Tue, 02/15/2011 - 01:42 | 962714 Motorhead
Motorhead's picture

I'd bang Meredith Whitney.  Any gal who calls for Citibank's demise is hot in my book.  Besides, Abby Joe Cohen is taken.  I think.

Tue, 02/15/2011 - 02:17 | 962754 tellsometruth
tellsometruth's picture

  timmy or benny will

Tue, 02/15/2011 - 02:29 | 962766 Carl LaFong
Carl LaFong's picture

Looks like more Fed money laundering to me. Fed creates electronic dollars, swaps them overseas and has Euro central banks and others "buy" them for the fantastic deal they represent. When will the oppressed masses in the US stop these clowns. Oh, wait a minute, American Idol is one, I gotta go....  A government big enough to give you everything you want is a government big enough to take from you everything you have. - Thomas Jefferson

Tue, 02/15/2011 - 07:04 | 962906 badger
badger's picture

as an illinois resident my whole life, this is embarrassing.  this is just a mini version of what the federal situation would look like if the fed could not issue debt with debt.

 

i have no interest in leaving the country... any suggestions on where to go that has decent schools for my young kids about to enter grade school?

It is not a pleasant thought of having to pay increasing taxes for services that were rendered (pensions) the past 30 + years.

 

Tue, 02/15/2011 - 17:52 | 965021 Buck Johnson
Buck Johnson's picture

They can't find buyers, and the fed don't dare to buy.  Because once they do they will have to do it for the other 49 states, you can't keep that secret no matter what you do.

Tue, 02/15/2011 - 20:56 | 965460 co2010
co2010's picture

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