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The Muni Time Bomb Is Set As Harrisburg Contemplates A March 1 Chapter 9 Filing
A week ago we asked whether Harrisburg is a "doomed city." Today, the city itself answered the question, after passing a 2010 budget which excludes debt payments. In essence, the city anticipates defaulting. The catalyst will be a $2 million missed interest payment on an incinerator due March 1. As Reuters points out laconically, this is "a rarity for
a municipal bond issuer." The outcome: official muni default. "Asked whether the city may file Chapter 9 bankruptcy as a way
to get its debts under control, [City controller] Miller said that was a
"possibility."Will this be the catalyst that sets the muni bond market ablaze? Remember that March is when Quantitative Easing officially ends. And everyone knows what is happening in Europe. Will the next 20 days set the preamble for the next major leg down in the ongoing Great Recession?
From Reuters:
Harrisburg, Pennsylvania,
moved a step closer to defaulting on a bond payment when its city
council passed a 2010 budget that does not include $68 million in
debt repayments on an incinerator.
Without the debt provision in the $65 million budget, the state
capital may miss a March 1 payment of $2.072 million, a rarity for
a municipal bond issuer.
Joyce Davis, a spokeswoman for Mayor Linda Thompson, confirmed
the council's decision -- taken at a special session on Saturday --
and said the mayor is not commenting for now on the implications of
exclusion of the debt payments from the budget.
The $2.072 million payment is the latest installment on a $300
million bond owed on the construction of the incinerator. An
additional $637,000 is due on April 1.
City Controller Dan Miller said last year's payments on the
incinerator were made from a debt service reserve fund that is now
depleted.
Miller said on Feb. 9 he would "not be surprised" if Harrisburg
fails to meet the March 1 payment.The tax-exempt municipal bond market, which states, cities and
municipalities use to raise the funds to build roads, schools and
hospitals, is viewed as very safe with a far lower default rate
than the corporate bond market.
Just 54 municipal bond issuers rated by Moody's Investors
Service defaulted on their debt between 1970 and 2009, the agency
said on Thursday. The average five-year historical cumulative
default rate for investment-grade municipal debt was 0.03 percent
in the period, compared with 0.97 percent for corporate issuers.
Don't look for this to impact markets though. Surely, a wave of municipal defaults, together with sovereign bankruptcies is now fully priced into the market.
h/t Mike
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Will the next 20 days set the preamble for the next major leg down in the ongoing Great Recession?
Yes. Disappearing cash flow eats everything from the inside.
Not. An event anticipated precludes its occurrence.
The only thing anticipated is that everything will be papered over in perpetuity, and markets will live in a state of rising bliss forever.
Peception and reality are two entirely different things.
Not to the perceiver they ain't.
It is to anyone who perceives based on preconceived notions, which is everyone.
If a tree falls in the forrest and no one is around to hear it, does it create a sound?
And yet I'm still certain the sun will rise tomorrow.
A watched pot never defaults.
S&P and commodities are so cheap now. All of them are going to go up for the "wrong reasons", because all the political class around the world is not going to let the systems collapse. Instead they will inflate and continue inflating everything to create the false sense of "recovery". They want to be able to say "Look at the recovery on your 401ks" Buy any deeps"
LMAO. So 2nd half 2009.
Dang. That nails it.
And it looks like time to get out of the tax-exempt insured muni funds I've been parking money in.
Not a problem, Treserve can buy all of Harrisburg's munis at face.
Haaa! "The Treserve"
Fucking LOVE IT.
Those pesky debt repayments, we need to look forward...hah
I hope that was a retorical comment? I am not sure anything is priced into the markets.
This developing Muni default will prove to the catalyst that pushes us over the edge. Buckle up and hang onto your ass's America.
on the contrary this will cause a chain reaction flight out of muni's and the dollar, sending the dollar to new lows and stocks to new all time highs.
With 30+states in a similar mess, you could well be right.
Need to ask how's that QE thingy workin' out for ya'?.
Do you really believe " a wave of municipal defaults, together with sovereign bankruptcies is now fully priced into the market."? Surely with the S&P above 1000 and DOW above 10,000, the only thing priced in is a mild hiccup in the global recovery, not a further leg down with sovereign defaults?
Thanks to ZH to bring the lacking attention from MSM on the basketcase called the United States!
"For the record, while there are a handful of European nations with serious financial crises, these nations represent no more than 1/3 of the EU economy. In contrast, as has been frequently published, there are at least forty U.S. states struggling to ward off insolvency – and representing somewhere around 80% of the U.S. economy."
from...
http://bullionbullscanada.com/index.php?option=com_content&view=article&...
Today, Harrisburg. Next month, the world.
Now that's laconic.
http://houstonhousingmarket.org/2009/10/city-of-houston-balance-sheet-suggests-bankruptcy/
Houston has got next?
Nah, Perry will just get the legislature to buy Houston............out of the 16 Billion Slush Fund.
I liked the idea of the states seceding from the Feds...........
That would be one way to escape this crap..........
Maybe Harrisburg is just trying out the new and highly successful Bank/Mortgage/Real Estate model.
Like an underwater mortgage holder, they aren't going to default or go into bankruptcy - they just aren't going to make any payments. I'm sure all of the bond investors will not want to write off the loss, so they will come up with ways to pretend that the city is still paying or will start paying again in the near future when the economy 'recovers'.
What could go wrong?
/sarcasm
"We just fixed the glitch"
The hits just keep on coming.
Chances are, like the subprime crisis, this is highly containable. It's just one city, it's not like it's a state or two........
yet.
How long have I been harping about muni deafaults? Not if but when? Total meltdown is on the horizon and we're all to stuck in our ways to give a shit.
you called a p2 top yet shanky??
"Don't look for this to impact markets though. Surely, a wave of municipal defaults, together with sovereign bankruptcies is now fully priced into the market."
Hilarious but oh so true. You just wonder how long the levitation act can continue. One morning we'll awake and something will finally push the markets over the cliff. They brought the markets up simply as a mechanism to prevent people from taking to the streets. Show a 50% rise in the markets after they get kicked in the teeth and they'll be pacified.....for the most part it's worked.
I would agree that a serious segment of the market has been watching the debt crisis grow and moves have been made that "price in the defaults." That said, what will matter is how the defaults (be they Greece or Harrisburg) are handled. Actions taken will give the market a clue as to whether the authoriities plan to "inflate or die."
Sure! Goverments die! Are you kidding me?
Perhaps empire is a better word. What we have right now doesn't remotely resemble government. When we said you have to be crazy to run for office we didn't actually mean that we wanted people with serious mental and personality disorders.
WTF
An empire at the end of its lifecycle is an ugly spectacle.
You look familiar....
Let me just say this,,art is art, isn't it? Still, on the other hand, water is water! And east is east and west is west and if you take cranberries and stew them like applesauce they taste much more like prunes than rhubarb does. Now, uh... you tell me what you know.
What this whole crisis tells me, is that this country needs a good 7 cent nickel. Yessiree, we've been using the five-cent nickel in this country since 1492. Now that's pretty near a hundred years' daylight saving. Now, why not give the seven-cent nickel a chance? If that works out, next year we could have an eight-cent nickel. Think what that would mean. You could go to a newsstand, buy a three-cent newspaper and get the same nickel back again. One nickel carefully used would last a family a lifetime!
By the way.....
Can I bum a nickel...Why this could be the start of real green shoots..Just think, quietly resting under an elm tree on oak street after mowing the lawn of Abagail Twirlbaffing. Don't listen to all these doomsday anarchists, forget them,,who are you going to believe, me or your own eyes?
I am saving time. Can you spare a minute?
They've already taken the "nickel" out of nickels. So you are only dealing with a 3 or 4 cent nickel or whatever the new cost is to make the nickel.
Well,,,you sabotaged that thread...Technicalities, indeed......and to think this could have bailed out Harrisburg..How do you feel now?.. you cad...
It's about time for Margaret Dumont to say, "What is the matter with you?"
I think the avatar is Manbearpig, but at 40 x 40 pixels, it's hard to say for sure.
I know that the Harrisbury budget, from the article, overlooked debt payments for an incinerator. But it doesn't mention other fiscal obligations, so let's say the incinerator is a holdover boondoggle from a previous administration, and therefore, more easily foresaken. Does the Acme Incinerator Co. come and disassemble their property?
I bet they find lumps of gold on the bottom from jewelry that was accidentally thrown away. I saw something about that on Science Channel or somewhere.
They brought the markets up, indeed, but don't forget they brought them down first.
Can't lose sight of the fact that GS posted a firm record quarter in Q1 when the market was being brow-beaten daily ... which simply means they held puts and CDS while they were shorting everything down.
And, if there's any question, look at the b*tch slap they gave BHO on inauguration day, and the wedgie they handed Turbo Tim on the day he indicated he had no bank bailout in hand, but thought a congressional committee and some consultants might be the answer.
They still want the markets to go up, though ... that is unless they already packed enough bonus money away to head for the islands.
The world is awash in debt that can never be repaid. Storm clouds are gathering.
Fortunately the Fed doesn't care if the debts on its balance sheet are being repaid.
The Fed's actions remind me of a South Park episode where Kyle gets a Platinum Amex and just pays everyones debts. Life imitates art.
http://www.southparkstudios.com/clips/222708/?tab=related
And...it's gone.
Well, personally I have been a proponent of this forever.
WHY, do we(Citizens) owe interest of debt created by a Quasi Governmental agency?. Paper/ink/number= Cost of Paper/Ink/ Face value, plus interest on face value, WHY do we owe ourselves?.Why should we pay interest on paper, WE can print for next to nothing?.
I know, part of the '13 scam act..........but, hey, maybe time we defaulted on them.
Congress passed it along, why not just issue ONE note, or coin, to the Fed/Treasury, saying 125 Trillion PAID IN FULL.
Congress has the power to coin and regulate.........money.
Why not just pay it off with a US Note............Kennedy tried.
Harrsiburg, chump change.
Europe has PIIGS.
We have CINN. Caleeforea, Illionois, New Your, New Jersey.
Shit House going down in a five-alarm fire? Who ya gonna call?
Why, Joe Isuzu of course, he's a pro and he can fix it, real cheap and real fast...
Harrisburg? California Sets The Nation's Trends.
The city of Vallejo, Calif., gained national attention earlier this year [2008] by filing for Chapter 9 bankruptcy protection. Now, two neighbors are fighting to avoid the same fate, as the state's economic crisis spreads.
http://globaleconomicanalysis.blogspot.com/2008/12/california-implodes-i...
At least it's eighty degrees in LA today.
100% of you guys are such depressing bears. do you all want the world to go into a severe depression? no matter how prepared you are with the scenario you all paint all of you will be in some form of trouble if what you say comes to fruition. in any case, i trade full time and say despite the defaults coming the world will do just fine.
100% of you guys are such depressing bears. do you all want the world to go into a severe depression? no matter how prepared you are with the scenario you all paint all of you will be in some form of trouble if what you say comes to fruition. in any case, i trade full time and say despite the defaults coming the world will do just fine.
Ben, is that you?
Contrary to what you may think, if there is a muni default, that means the sun will stop shining. Global chaos will ensue and we will all die of starvation. A great shorting opportunity!
Haven't any of you ever heard of the Harrisburg I.O.U.? You will soon.
We going to give youz the harrisburg IOU!
That sounds quite painful. Ouch!
and about as appealing as a Cleveland Steamer.
We need the IOU derivative check book. I promise to pay you when my iou from them comes who has an IOU on someone else.
IOU's to infinity. What's in your wallet!!!!
Isn't that what the US Dollar is?
Ding ding ding! +1
I am wondering if this is a recourse or non-recourse state. If the former, I'd like to go ahead and move my incinerator to South Carolina.
The muni time bomb? Are you serious? About once a month I read some article with the theme of "this time, the event we are discussing will bring on the collapse." Nothing is going to happen. There is zero accountability, and there will be zero consequences for defaulting.
his is not the "End of the World." Bankruptcy is no longer the stigma that it used to be some fifty years ago, and it should be seriously considered by the Mayor and City Council. All of this incinerator debt can be renegotiated to relieve the city's debt burden and without resorting to 100%-or-greater tax increases.<
Sure, we screwed a lot of people in the past, but you can trust us going forward, Mr. Contractor. We Promise...
Fuck the contractors. They deserve to be slammed but good for getting these boondoggles passed to benefit themselves by paying off the politicians to do it.
Hope they starve to death in the dark.
Woot! no wait. Doh!
With tax revenues down, and expenses about the same, city, county, and state governemnents are increasingly finding it impossible to fund ongoing operations and service their debt. Without Federal money the writing is on the wall for many muni defaults. How could people be so blind to this with California issuing IOUs and billions in debt with no way to repay? Another reason this is not a good time to be short Treasurys. Probably a good time to be long Treasurys.
Anyone know if this has any money market implications? I had some of my cash locked up for a while in that damned Reserve Fund.
late last June the head of the Harrisburg NAACP called on Pennsylvania governor Rendell to "declare martial law and suspend civil liberties" governor responded by deploying highway patrol officers on the streets. local law enforcement blames high concentration of various weaponry for the unrest. (they might add record unemployment as well). Henry Kissinger some time ago predicted that freedom loving Americans will beg the government to send in troops to curb civil unrest and even tolerate foreign troops(UN) to get the job done. Harrisburg Authority, entity responsible for "state of the art" garbage to energy incinerator, has not made a payment on $283 million debt since late 2008. (Just another foreclosed squatter apparently) Muni bond is where the rubber meets the road. All those things that everybody takes for granted, basic infrastructure- trash removal/ sewer lines and service/water /electric/heat/police and fire, are going to come under increasing pressure and experience massive attrition. I doubt that all those National Guard and reserve brigades coming to your neighborhood are going to be picking up the trash
Where is Governor Rendell and the state and local legislators on this issue?
Where are Rep. Buxton and Senator Piccola?
Are they just that out of touch?
Completely absurd: http://economixx.100webspace.net/
Rendell is too busy becoming McNabb's agent
-
Nothing can shake markets today, the PPT lets the market drop a few hundred points, buys back in lets the market slowly trend higher and makes money by drip feeding sales back in. Rinse and Repeat with any and all bad news events, until people realize hey the World really is in good shape...
Whats the icon for Sarcasm?
What I don't get is why all the 401k holders do not bail out now that they have recovered somewhat.
If everyone sells on strength, PPT can not support the market forever. Are they mesmerized?
Most 401(k) holders think things are improving. Just look at the Dow and how it's risen past 10k. They don't want to miss out on the "recovery."
Taxes and fees, once again Uncle Sugar using one of his favorite tricks. Also some places are putting additional hurdles on their employees that are looking at touching that money. Place I work at limited some options such as taking loans for example. And remember 90%+ people out there are asleep. Oh and no I'm not contributing to a 401k, my employer is tossing money in there but not me.
I also disagree with the idea that the PPT can't keep it up. If Bernake is ready to bury us in FRN then what is to stop him for putting out a buy order on all asset classes? DOW 1,000,000!!! That is a bit of an extreme example, but when you have a legal monopoly on counterfeiting you can pull of some very strange things.
"Without the debt provision in the $65 million budget, the state capital may miss a March 1 payment of $2.072 million, a rarity for a municipal bond issuer."
$65 million? That's loose change from the couch in the lobby @ 33 Liberty Street. Bernanke will happily print his way through all the red ink that America can generate, as spendthrift politician sing his praises all the way to the next ballot box. The beneficiaries of printing are lunging for that final brass ring, and the regular folks don't even realize the merry go round is stopping.
Without monetary discipline there is no fiscal discipline, soon to be followed by no personal financial discipline and then no society. This is the history of empires on their way to supernova.
Fitting that what burned down their fiscals was an incinderator.. maybe just throw the old ledgers in there and start over
Leo says the defualt is totally baked in and now without paying THAT debt he can sell Harrisburg on some nice solar deals - even if the sun only shows up twice a month around here, that's more upside than his portfolio usually sees
As a PA resident this stikes home. Ed Ruindell is the master mind of a total run into the mud like Corzip in NJ. This state is in the pockets of big labor, foolish gov't patronage and mismanaged gov't 'balance sheets'. Recall this is the state with a Liquor control board that sets the price of liquor on 'behalf of its citizen'. A total FUBAR, for decades. Ridge was unwilling and incapable to bite down hard on the swill flowing down between the Monagahy, Susqy and the Delly. Also with two dead ringers on either end of the state Philly and Pitty, well you get the pics. AND it is not too pretty, Pennsy part of the dead man walking syndrome!!
Ditto. Once you leave the populations centers, the entire state looks like the set for "The Road." Perhaps Centralia is the poster child for the new era, a once thriving mining town now being eaten from the inside as the coal fire there has burned for years and forced the evacuation and the demolition of all of the houses there. A truly weird site on a winter's day, smoke rising from former house foundations, like volcanic vents. Nothing left.
Don't you worry folks.
Our government will make something up.
Our fiatscos are still good.
At least you have good rivers to fish over there in pennsy. Me, I just bought a kayak for when the supply chain finally blows apart...rather implodes...I can at least provide fish for my family. Ohio is in the shitter too and as a state overweight with financial industry workers it will be a real doozy when the levitation act finally comes unglued under the merit of its own weight. Of course the gubmint employees are all demanding higher wages and all these muni's are a total fucking joke as they have no ability to think about tomorrow until next week. Like somebody here said...nobody has it in thier interest to point out the fact that they're all swimming naked even as the tide goes out. Everyone is going to be suffering due to these docile pieces of shit. This municipal bond thingy is what i've been waiting for, and it's getting real close.
Wish it would hurry up and get here already, my popcorns getting cold.
Harrisburg is not alone amongst Pennsylvania financial problems. Pennsylvania SERS (state employee retirement system) is known as one of the most timid hedge fund investors, after they've been gated/trapped in liquidation series of some hedge funds they've tried to redeem from they still haven't received all their money over a year later and after a year where there was more liquidity in the market than there was even during the bubble days pre-crisis. Some HF managers are simply keep towing them along giving them little bits at a time, while they keep collecting fees on the money. I know of a fund that promised them all their money back by the end of 2009 and at this point have only returned about 20% and have no concern at all about getting them their money back any time soon even though half their fund is essentially in two deeply troubled sovereign debt situations.
Harrisburg is not alone amongst Pennsylvania financial problems. Pennsylvania SERS (state employee retirement system) is known as one of the most timid hedge fund investors, after they've been gated/trapped in liquidation series of some hedge funds they've tried to redeem from they still haven't received all their money over a year later and after a year where there was more liquidity in the market than there was even during the bubble days pre-crisis. Some HF managers are simply keep towing them along giving them little bits at a time, while they keep collecting fees on the money. I know of a fund that promised them all their money back by the end of 2009 and at this point have only returned about 20% and have no concern at all about getting them their money back any time soon even though half their fund is essentially in two deeply troubled sovereign debt situations.
Who was the first to go technically bust? It was the NBA, NFL, MLB. they needed the municipalities to build them free multi billion$ stadia at taxpayor expense. When the muni's go bust, what happens to the stadia? And the NBA is completely bankrupt right now. I havent watched a game in several years. I dont now who watches this stuff. meanwhile Miami, which is bust, is building a 2 billion$ stadium for the Marlins. Logical?
It seems very fitting to me that the straw that may break the camels back here is debt repayment on... wait for it... an incinerator. Burn, baby, burn!
its ok we can just print more money and bail them out
we are all keynesians now
I've been reading the news about the death of the luge athlete in Vancouver...and was struck by the parallels between our economic model and the luge slide. Someone designed a slide where at the very end there's a 180 degree turn. I don't think there's an athlete on the planet who would slow down at the end of their Olympic event...just when they're rounding the last turn. Here's a snippet:
http://online.wsj.com/article/SB1000142405274870344770457506549235174152...
"The International Luge Federation has blamed the crash on the luger and not on any "deficiencies in the track," saying that Mr. Kumaritashvili "did not compensate properly to make the correct entrance" into the curve where he slid off the track at the Whistler Sliding Centre.
Despite those assertions, Olympic officials took unusual measures on Saturday to shorten the course by 190 yards to slow the speeds, and they altered the run to keep lugers on the track should they crash."
We're all Lugers now. The treserve is making some adjustments to the course. Our safety is their primary concern.
Hang on tight, that last turn's a doozy.
Here comes the muni bond market bailout/monetization by the Federal Reserve. Also, since we know how much this extra $Trillion(s) printing is going to be bearish for Gold, look for it to plunge again. Seriously folks, humanity hasn't seen such a horribly mentally challenged bunch of "market participants" in our race's history.
Thanks G.G. I love that contrarian view. PMs are the path to follow in times like this. Assuming you got the shiny in hand. All paper will burn.
It is fitting that the city that survived Three Mile Island is now ground zero for the muni debt storm.
I got out of the muni game about 10 years ago. 1) It was boring me to tears, 2) I didn't like supporting socialism, and 3) corruption is rampant.
I'm not going to cry myself to sleep over a bunch of government morons running themselves into bankruptcy.
That said, many were sold a bill of goods by bankers, municipal consultants, bond lawyers, and lobbyists over scams like waste incineration (especially waste to energy) and multi-family housing. These do-good projects are there to take taxpayer money and pad the pockets of the strap-hangers listed above.
I remember one speech made by a bond lawyer at a conference over how great the multi-family housing market was. But his speech was not about how many poor or homeless were served. It was about how it put his kids through college and bought him a second house. All the liberal prattle about social justice and such is boob bait for bubbas (as Pat Moynihan said). It's cover so they can siphon money out of your pockets and into theirs.
Harrisburg, while no doubt complicit and foolish in this farce is also a victim of the muni bond oligarchy.
if everyone is bankrupt or insolvent, is anyone bankrupt or insolvent??? if a true risk free rate no longer exists, what should be the parameter to measure relative risk? i guess it's better to ask no questions and just keep playing the game.
The fuse has been lit for all debt holders ...contagion will be confined to the US Gov though. The winner should be gold when all these state/county fires connect. Even at town meeting you can see boob bait while they saddle the future with default.
I would like to see this $300 million dollar incinerator.
It must be made of solid gold to be that expensive.
You do realize that is almost 7000 45 thousand dollar vehicles (four door ford F-150 with all the fixin's)
I wonder if it has the $10,000 toilet seats in the restrooms and the $700 solid brass stall door hinge bolt sets too.
For $300 million , this thing better walk the earth feeding itself on garbage forever or something.
-MobBarley
ps. That also works out to TWO MILLION bottles of Opus One at $200/bottle.
Time for some Qualitative easing?
If a tree falls.....etc/
Will we eventually see a point where everyone is bailed out because nearly everyone is indebted in one fashion or another? Which leaves the tiny few who have reached a point of solvency to cry foul, tiny voices in an economic wilderness to which the debtors pay no attention. The Modern world cannot survive without "the system" and those fearful of change will do anything within their power to keep the system, rather than face necessity. This is why they extend and pretend. This is why debt works. We are already in the apocalypse with 40% of our population on some form of government subsidy and 20% unemployed or discoraged from ever finding work. Add in the numbers of governmental employees and you find a system that is groaning under it's own weight, like much of it's overweight populace. IF it comes, it would be a mercy to be quick, but given the tenancity of those enslaved, it will be decades of slow destruction into chaos
Does anyone know the ratings of the Harrisburg bonds? I assume they were of lower quality - as rated by our esteemed ratings agencies.
Higher quality munis should see little affect from a default in a lower rated issuance...after all many corporate junk bonds default without affecting quality names like, like....like, well there is bound to be a quality AAA name out there somewhere.
There are a lot of smaller issue muni ratings affected through "buying default insurance " from larger pension funds, such as a CalPers. Pay the premiums, then reap the reward of lower interest rates associated with a higher quality rating due to the " insurance " protection.
The brainiacs at CalPers have this stuff issued all over the US in backwater municipalities. Of course, everyone knows CalPers couldn't possibly turn into the pension fund equivalent of AIG....snarkism.
Panic in the Muni market wil equal fire in the disco.
Sane people might just stop purchasing new munis altogether. We could see a mega spike in interest cost for all muni issuers.
People who thought munis were cheap at 100-125% of treasuries are about to get blown out of the water.
Strategists who at the beginning of the year were telling clients to buy munis simply on the grounds that tax rates were going up, are going to have a lot of explaining to do.
And, if the government just assumes all bad muni debt, then...well I'm not sure, actually. But, it will be pretty fucking interesting won't it.
I would like to see this $300 million dollar incinerator.
It must be made of solid gold to be that expensive.
You do realize that is almost 7000 45 thousand dollar vehicles (four door ford F-150 with all the fixin's)
I wonder if it has the $10,000 toilet seats in the restrooms and the $700 solid brass stall door hinge bolt sets too.
For $300 million , this thing better walk the earth feeding itself on garbage forever or something.
-MobBarley
ps. That also works out to TWO MILLION bottles of Opus One at $200/bottle.
Take a look at Jefferson County, Alabama. They are in de-facto default of their sewer debt, yet no bankruptcy filing has happened, and in fact JPMorgan is re-negotiating the debt.
That one was a little different. The dumbass muni managers basically had their pants pulled down by their investment bank. (Lehman?, can't remember)
The whole thing reeked. I remember a 300 million or so sized deal getting pre-re'd, within a year after issuance in a neutral to even worse rate environment. Guys who bought the long 5's in the terms were doing backflips because their dollar price went from 100 to 110 overnight on the refunding.
It was fucking weird and turns out the whole thing was linked to crooked swaps.
Not sure how much of the stimulus has been spent. I thought I heard that about 2/3s is still coming. (just in time for the run up to election time.) If that is right, this problem will probably be passed on for another few months to year.
34%.......................the rest is sitting, mainly in banks.
So, why do we need a 80 Billion JOBS BILL?.............
This next election cycle is going to be a riot.......the Winner is hung.
I think this article applies as well...
http://www.suntimes.com/business/savage/2048376,CST-NWS-savage15.savagea...
Doesn't Harrisburg have a large Greek community?
Good for them, in any case. Wipe out the debt.
Chicago's Soldier Field cost 800 million$'s. It probably cost no more than 150 million in actuality. It will ultimately cost chicago taxpayors several billion. When chicago defaults, who pays the bondholders on soldier field debt?
I remember writing about this in February of 2008 and everyone said that I was either "nuts" or just scaring up the masses.
MunicideFast forward two years later and it is happening just as fast as I thought it could. The circus of deficit financing and depending on now bankrupt states to bail out communities and counties is now over. The nightmare the governors and other clowns will not talk about, massive defaults and Chapter 9 bankruptcies will create a wave far worse than the incoveniences to the "locals" involved. Many insurance companies, pension funds and retirement programs include Munis as a "stable and safe" refuge yet if we start to see the projected wave of Chapter 9's that I think we will see, because let's face it-the politicians will take the easieset way out, then all hell breaks loose in the markets and we will see wave after wave of fund implosions to follow.
Thus the Obama administration can execute the emergency procedures to seize all of the 401K's and IRA's to as to "protect" the masses and guarantee they still have something when they retire. I look for every pension program, in the red or black to follow suit and be absorbed by the Feds also.
Never, ever waste a good crisis, after all.
Sorry about the dup...
You maybe right, get your money out of retirement accounts while you can!
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