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Moody's Downgrades San Francisco To Aa2 From Aa1, As Muni Maul Goes Mainstream

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Wed, 11/17/2010 - 18:19 | 735974 mule65
mule65's picture

I like Muni Meltdown better than Muni Maul.

Wed, 11/17/2010 - 18:26 | 736009 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Muni Monsooni?  Muni  Tsunoomi?

Wed, 11/17/2010 - 18:40 | 736066 goldmiddelfinger
goldmiddelfinger's picture

soon to be Puny Muny

Wed, 11/17/2010 - 18:21 | 735980 plocequ1
plocequ1's picture

I thought Scott Muni was dead..

Wed, 11/17/2010 - 18:27 | 735981 doolittlegeorge
doolittlegeorge's picture

and then "San Francisco downgrades Moody's while giving them some saucy free speech (think "Team America, World Police type language--with "Muslim terrorist" replaced by "Moody's downgrader") that makes all citizens feel better about that particular freedom" and freedom in general.  Now SHOW ME YOU CARE BURNETT, give me A SIGN!  I, I ....I'm "at a loss for something not at all funny" which will cause you to be GENUINELY outraged and your employer and certain VERY ANGRY fellow employees to.....

Wed, 11/17/2010 - 18:31 | 736031 NOTW777
NOTW777's picture

doesnt barney frank regulate moodys

Wed, 11/17/2010 - 18:23 | 735991 arkady
arkady's picture

I can't say that I am terribly upset over watching some of the most liberal places in the US fall apart as their promises of eternal financial paradise at the expense of the taxpayer come crashing down to earth.   Bring on the defaults, the sooner the better for everyone.

Thu, 11/18/2010 - 07:47 | 737231 moregoldplease
moregoldplease's picture


Wed, 11/17/2010 - 18:29 | 736002 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

BS Bernanke says, "Aghhh!  Aoh!  Get to the Choppa!!"

Get To The Chopper!!!:


Wed, 11/17/2010 - 18:28 | 736016 NOTW777
NOTW777's picture

dont worry this is all part of the "recovery" plan, right?

Wed, 11/17/2010 - 18:32 | 736033 the rookie cynic
the rookie cynic's picture

Muni meltdown = fodder for QE3 canon.

The Bernank will start spinning for it shortly.

Wed, 11/17/2010 - 18:34 | 736038 Hansel
Hansel's picture

OT: I have produced a new video.

Rules for Peasants by Utopia Government Films Co.

Wed, 11/17/2010 - 18:42 | 736073 cossack55
cossack55's picture

Too depressingly accurate.

Do you have one for those of us who are happy go-lucky dystopians?

Wed, 11/17/2010 - 18:44 | 736080 cougar_w
cougar_w's picture


"But other than that, it's fine. Really. We all just want to get along."

Just tack that on the end.

Wed, 11/17/2010 - 19:05 | 736137 Hansel
Hansel's picture

:\  haven't been very happy lately.

Wed, 11/17/2010 - 23:53 | 736785 Yophat
Yophat's picture

Cool video...added it to the list (2nd post with videos) and its about 10 or 12th video down -


Wed, 11/17/2010 - 18:33 | 736043 bugs_
bugs_'s picture

Deep Shah

Is Moody's transmitting a subliminal message to us?

Downgrading "the city of brotherly love" and then quickly downgrading San Fransisco.


Wed, 11/17/2010 - 18:34 | 736045 notadouche
notadouche's picture

Dude, San Francisco was downgraded by society decades ago.  What took Moody's so long.  I wonder when they will come out with the downgrade of Pelosi?  What's Fitch's position on this.  

Wed, 11/17/2010 - 18:36 | 736047 goldmiddelfinger
goldmiddelfinger's picture


Wed, 11/17/2010 - 18:37 | 736055 goldmiddelfinger
goldmiddelfinger's picture


Wed, 11/17/2010 - 18:38 | 736058 notadouche
notadouche's picture

We're downgrading it but it's "strong budgetary control is a positive"  WTF.  I honestly don't know the inner workings of San Fran but "strong budgetary control" is not the first thing that comes to mind.   Of course they beat my Rangers so I could just be bitter.

Wed, 11/17/2010 - 18:43 | 736062 cougar_w
cougar_w's picture

The Bay Area has been hit pretty hard. Construction was a huge employer here (mostly illegals, but still...) and projects have been nuked all over the place. I sense that there is a lot of "funny money" (redevelopment funds) behind the work now in progress, but the Redev guys are facing bk themselves. Redev bonds may be worth nothing by this time next year, I don't know what they can do to get out from under them, but they'll try it you can bet. Add to this the massive collapse in home prices (30% I suppose) and now you've just destroyed a huge industry built up around remodels, flipping etc. CRE is tits-up, seriously. Vacancies everywhere. City of San Jose is in a mutual death grip with the Fire and Police unions over benefits and retirement. The last election where we had some local propositions on the ballot to put benefits on a level playing field budget-wise was best described as "viciously fought at a very personal level". U-G-L-Y political bridge burnings going on.

Hanging by a thread. It wouldn't take much to tip this cow over, is my sense.

Wed, 11/17/2010 - 18:48 | 736091 faustian bargain
faustian bargain's picture

Wait. The cow is hanging by a thread? <ducks>


I'm just waiting for the domino effect to surrounding cities and towns. (Once the cow tips, I guess the dominoes will fall. I don't know what that does to the thread.)

Wed, 11/17/2010 - 20:00 | 736282 mikla
mikla's picture


People are still pretending, "It can't happen."  Kind of like "GM can't go bankrupt".

When people can no longer pretend, it will go *fast*.  Cities all across California will go, and a bunch of other states are trying to figure out how California defaults on its debt and rewrites its Constitution (which it will do) so that they can do it too.

Here's the cow hanging by a thread -- I heard there was free Gubbermint Funding inside there.

Thu, 11/18/2010 - 11:23 | 737650 jus_lite_reading
jus_lite_reading's picture

It's very obvious. Why does it take Moody's, S&P et al so long to downgrade? I already downgraded the entire US to junk.

Wed, 11/17/2010 - 19:21 | 736179 Rainman
Rainman's picture

LA metro is getting u-g-l-y too. It seems to me the public unions are getting much more aggressive about fighting pension cut talk....even for new hires, which is inexplainably arrogant. I guess they figure the best defense is a good offense.

The unions are hanging tight waiting for their pilot and copilot, Brown and Newsom, to be sworn in.....so taxes can be immediately raised.

As much as I detest Moonbeam, I light novena candles in prayer for his good health.

Wed, 11/17/2010 - 20:47 | 736384 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Don't go begging to Uncle Sam the rest of the States could care less.  CA put themselves in a rat hole so they need to dig themselves out. 

Wed, 11/17/2010 - 21:32 | 736476 masterinchancery
masterinchancery's picture

Yep. Any congresscritter from the 49 (or maybe it's 56) other states who votes to bail out California had better be from a very well gerrymandered district or plan on retirement.

Wed, 11/17/2010 - 20:54 | 736392 Bastiat
Bastiat's picture

Assessed value for the San Fran Redevelopment project areas went UP about 11% over last year.  Tax increment available to service debt increased nearly 13%.   Long term rating issued in September 2010 stable at A1/A. 

San Jose Redevelopment is in deep yogurt, though -- not at helped by the fact that the State TOOK from them about total $75 million in 2010 and 2011 as part of the $5bln or so they TOOK from local governments and agencies to partially offset their fiscal dysfunction.   Further such raids are unconstitutional under the recently passed Prop 22.

Not saying things aren't getting tight in SF, just saying that credits are getting very local, especially those based on real estate taxes, and generalizing about the Bay Area isn't useful to an investor.


Wed, 11/17/2010 - 18:40 | 736063 goldmiddelfinger
goldmiddelfinger's picture

Nancy and Gavin stole Treasure Island from the people and gave it to their financials in-laws.


Wed, 11/17/2010 - 18:42 | 736072 chinaguy
chinaguy's picture

San Francisco = Philadelphia?? Haw-Haw!! you precious, precocious idiots. This is where all of your "feel good" & "your shit don't stink" nonsense has left you.

BTW - I left that dummy package 30 years ago and never looked back. 

Wed, 11/17/2010 - 18:45 | 736082 bob_dabolina
bob_dabolina's picture

In light of this development Nancy Pelosi will attempt to lower the retirement age to 43, increase UE benefits 30%, and provide tax payer dollars to the food/clothing shelter/education/healthcare for illegal aliens.

Everyone knows this is the best way to stimulate the SF economy and get the budget under control.

Wed, 11/17/2010 - 18:51 | 736101 treemagnet
treemagnet's picture

Its okay, they'll just raise the toll on the golden gate to $500, index it to gold or silver and it'll be okay.

Wed, 11/17/2010 - 19:14 | 736160 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Communist states can only last so long before they have to pay the fiddler. In reality, SF most likely should be 3 to 4 notches below what this downgrade left them at.

Wed, 11/17/2010 - 19:28 | 736188 squexx
squexx's picture

If there ever was a city that deserves to melt down, it's that imbecilic bastion of commie liberalism known as Frisco! Maybe all those illegals they're providing sanctuary to will help them out out financially! LOL!

Wed, 11/17/2010 - 19:40 | 736224 YHWH
YHWH's picture

Does this mean that Oakland has a better rating than San Francisco?

Wed, 11/17/2010 - 19:58 | 736274 Cdad
Cdad's picture

Ummm...I don't think so.  Isn't Oakland San Fran's sewer?

Wed, 11/17/2010 - 19:51 | 736255 squexx
squexx's picture

Like someone else said, first Moody's downgrades "the City of Brotherly Love." Then they downgrade "the City of Brotherly Sex." Maybe they're trying to send a message! In any event; eat cake you braindead liberal scum!

Wed, 11/17/2010 - 19:56 | 736268 nmewn
nmewn's picture

Well...at least they are still a sanctuary city...no one can ever take that away...siiigh ;-)

Wed, 11/17/2010 - 20:23 | 736331 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Its the Pelosi touch!

Wed, 11/17/2010 - 20:32 | 736351 walküre
walküre's picture

I'm in the MOODY to rate everyone and everything AAAAAAAAA+++++++++++

Who the fuck cares anymore what these "agencies" put out?

They're a waste of anybody's time.

Buyer beware has always been and will always be the true measure of business.

Banks, politicians, CEOs are worse than snake oil salesmen selling products.

The snake oil salesman goes to jail.

Wed, 11/17/2010 - 21:05 | 736416 Bastiat
Bastiat's picture

You know Aa2 is not a rating to make fun of.  Before you do, check out how many cities have better ratings . . . and worse.  The muni bomb may be ticking but SF will be among the last standing I'd say.

Wed, 11/17/2010 - 21:11 | 736432 trav7777
trav7777's picture

Moody's goin to BAT for the oligarchs holdin those liquidation tickets!!

They want to see taxes up, spending down EVERYWHERE.  GET ON THOSE FUCKIN WHEELS, HAMSTERS!!

The Bernank turns out to be the only friend we have anymore...lol

Wed, 11/17/2010 - 21:18 | 736451 DavidRicardo
DavidRicardo's picture

As I've said for several years, if people really knew how bad the Bay Area economy is, they'd never buy anything again.  This area makes Greece look honest.

Wed, 11/17/2010 - 21:21 | 736455 Bastiat
Bastiat's picture

You want to see where to bomb goes off - look to a Revenue bond issuing entity loaded up with swaps--issued floating, swapped to fixed.  First they have exposure to downgrade provisions with the letter of credit bank on floating side -- then they have exposure on the swap to fixed.  It gets very ugly and then compounds.   Utilities are essentially monopolistic and can raise rates but watch the airports.

Wed, 11/17/2010 - 21:25 | 736462 Bastiat
Bastiat's picture

Ricardo, as I noted above "Bay Area" doesn't mean much when you're talking about credit -- you're blending Vallejo (in BK) and San Francisco just 2 notches under AAA after the downgrade.

Wed, 11/17/2010 - 21:31 | 736475 Bastiat
Bastiat's picture

Fitch AA, S&P AA, Moodys AA2.  Moody's had been one step above the other two, now they are all in line.  Hardly a "mauling," barely news and likely of no impact at all in terms of borrowing costs for the City. 

Wed, 11/17/2010 - 21:46 | 736503 apberusdisvet
apberusdisvet's picture

Within 2 years the median property tax bill in California will be $50k per year; only the retired union pensionsers (with a then median retirement income of $200k) will be able to live in an actual home.  Everyone else, specifically the few left who actually pay taxes, will live in the new tent cities in the Mojave Desert.

Wed, 11/17/2010 - 22:36 | 736624 nmewn
nmewn's picture

"only the retired union pensionsers (with a then median retirement income of $200k)"

Wait a minute...you're saying $200k is blue collar?

It's all so confusing ;-)

Wed, 11/17/2010 - 22:34 | 736616 Clapham Junction
Clapham Junction's picture

Well, Mom and Pop gets screwed again.  VWLTX, Vanguard's Long Term Muni Bond fund has managed to lose 5% in about 10 days.  This in a fund that moves a cent or so if at all.

There is no safe harbor, as all of us knows......

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