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S&P Downgrades New Jersey General Obligation Debt From AA To AA-
We wonder if this can be blamed on Meredith Whitney too...
Standard & Poor's Ratings Services has lowered its long-term and underlying ratings on the State of New Jersey's general obligation (GO) debt to 'AA-' from 'AA'. At the same time, Standard & Poor's lowered it ratings on various state agencies' appropriation debt to 'A+' from 'AA-'; and its ratings on the South Jersey Port Corp., which the state's moral obligation pledge backs, to 'A-' from 'A'. The outlook is stable.
"The lower rating reflects our concern regarding the stresses from the state's poorly funded pension system, substantial postemployment benefit obligations, and above-average debt levels," said Standard & Poor's credit analyst Jeffrey Panger. The downgrade also reflects the application of Standard & Poor's newly adopted criteria on U.S. states, which more transparently incorporates debt, pension, and other postemployment liabilities, along with other rating factors.
Standard & Poor's also affirmed its 'AAA/A-1+' and 'AAA/A-1' ratings on debt obligations subject to our joint and several criteria following the low correlation table. In each case the long-term component of the dual rating reflects the credit quality of the obligor and an issuing bank that we rate 'A' or higher. The short term portion of each dual rating reflects the short-term rating on the bank.
New Jersey has about $2.6 billion of GO debt, $27.8 billion of appropriation-backed debt, and $2.5 billion of moral obligation debt
outstanding.
The ratings reflect what we view as the following strengths:
- New Jersey's diverse economic base. The recession's effects and a continued slump in the real estate market have hampered employment and income performance, although we note some recent modest signs of recovery;
- The state's high wealth and income levels, which continue to be among the highest of the 50 states; and
- Continued improvement in balancing resources to needs in an increasingly difficult economic environment.
In our opinion, credit weaknesses include:
- A large unfunded pension liability;
- Significant postemployment benefit obligations; and
- An above-average debt burden.
The stable outlook reflects Standard & Poor's view that New Jersey will continue to manage its structural budget imbalances proactively. The state's progress in managing cost pressures associated its long-term liabilities while balancing operating budget requirements will largely determine its credit direction. Should there be meaningful progress on both issues, we could raise the rating. Liabilities continuing to increase or a weaker operating budget performance could place downward pressure on the rating.
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It's either her or the weather
Subpoena S&P too!
What's good for the goose is good for the totally-useless-and-captured, day-late-and-ethics-short, American rating agencies.
Dagong is the only rating agency that matters anymore.
I downgrade S&P from XX- to ZZ- !! how dare they downgrade Jon Corzine's former state ?? !!
Q: How did Mcgreevy leave the governor's mansion so quickly?
A: He already had his shit packed.
Or waddel and reed.
Does Meredith Whitney's prophecy is just about to come true?
Maybe the ratings agencies don't want to be put out of a job, so making little baby steps.
Sorry to say, but NJ is the least of the worries- CA, NY, AZ should be downgraded immediately to JUNK status. NJ is bad, I agree but those other states in mention are far worse. (I called the S&P downgrade of Greece about 3 months before the official downgrade)
My property taxes just went up 50%. I hate this state. Get me the f_ck out of here.
Weaknesses:
1. Communist gun laws
2. Highest property taxes in the country and still going up dramatically
3. Communist unions who have a stranglehold on the state legislature
4. Most business unfriendly state in the country
5. Post looting by CFR globalist and Goldman Sachs scumbag John Corzine who in his infinite wisdom invested the state pension funds in the market at peak and sold at bottom in 3/09.
GRRRRRRRRRRRRRRRRRR
Paulie Walnuts is going to take this up with Meredith!!!
pfftt....Let them file for bankruptcy.......jesus...wtf are they thinking.......
I love Chris Christie. He's teh anti-commie.
He'll shove the ratings downgrade in the union faces.
You have no clue. He portrays this good guy cut the fat image when in reality he is on eof the most fraudulent individuals in politics. And this is coming from a long time republican. In short, he may be the worst governor NJ has ever had- and that is saying a lot.
What do you base your opinion on?
The proof is in the pudding. I'm keeping a close eye on what takes place in NJ - I live here. I talk to people. The situation is dire. I'm all for cutting fat and expenses but certain items such as public school funding you DON'T CUT.
My Governor here in FL wants to cut education funding and according to 2007 stats we spend $8,500 per student and NJ is spending $15,700 per student. http://www2.census.gov/govs/school/07f33pub.pdf (page 21)
This a huge disparity between NJ and FL. The problem is most of this money gets siphoned off by the unions and never makes it to the kids. Perhaps I'm wrong but I can't imagine there isn't fat to be trimmed in the NJ education budget.
If that fat basturd really cared about saving, he'd look into raising capital gains tax on stock grants the Wall Street fat cats living in Summit and Alpine NJ are getting- but of course not, because that is where all of his friends live. I'd say, raise the tax to 75% and lets see how much they are willing to give.
You don't see anything wrong with the NJ schools? You are blind, then. I hear tales of the teachers union firsthand. Talk about a bloated, self-serving piece of crap.
How long have you or your wife been teaching in New Jersey?
im sure its the same everywhere, but especially in NJ, its amazing how you can tell who is/has a public employee in their family , just by the words they type !....if that isnt 100% proof that there is a collective problem of a union mindset , i dont know what is.....they are so brainwashed , they dont even know how to hide it !!!
Yes indeed I am concerned for my sister's well being. Don't make comments on topics you know nothing about. She makes ~$41k a year, including extra curricular activity. Her benefits are just ok. Nothing great. She tells me of the poor state of affairs in the public school system and that is where the concerns are- not in making less money but in the well being of the students and by extension, the teachers. Making cuts will mean that student that could have been the next great inventor of helium3 fusion energy won't be doing more than a 9-5 at walmart because his class size just increased 60% and the science program was cut (but the sports program was increased)... That is the dangerous road we walk.
New Jersey is spending the most per student in the country. It's spending 50% more than most other states. Where is the money going?
Bingo. That's the right question to ask. Look at where the money in NJ is going and compare that to school systems which spend a lot less. It's quite easy to find the problem.
Where is the money going? Into the pockets of the frauds, where else?
Then tell her to get a real job that requires her to work AND perform well at her job 12 months a year instead of nine. Oh yeah her job sucks but she would never quit, why?
She loves teaching. It was her dream more than 20 years ago. Things have changed rapidly wouldn't you say? And why are teachers to blame for this? The banksters are to blame. Period.
You're right. We should just totally eliminate public indoctrination. Total garbage. Thats why I refuse to send my kids to public school.
Wait! You DON'T cut public school funding? LOL!!!
ROFL
Chris Christie is a fascist who knows nothing about how to get out of our predicament.
Another clueless congressman who has somehow stormed in on a tale of bullshit. Guy will help the others destroy New Jersey.
Remember the dynamic is....Barack Paul the Keynesian Austrian.
THEY"RE ALL DUMBASS MONETARISTS. Christie. Paul. Obama. Doesn't matter, any monetarist fueled ideology will destroy us.
Chris Christie is just about as fascist as you can get.
Dumbass is trying to end the tunnel infrastructure. (we can't afford it? only in monetary bizarro world, which he seems fine to live under, in fact that's how he rose to power...by promising more monetarism)
In the union's faces? Why it's his ideology that caused the downgrades, not the unions. (and I'm not trying to take the unions side on this one...just that it was supply side trickle down that got us here, not unions...they were neutral as it comes to this)
Chris Christie, the republican dumbass response that will only make things 100x worse. You see the NJ people already went with the other side of the Keyneisan Austrian faux choice. That's the state to watch for the effects of the fake Austrian monetarism non-choice.
It's called American CREDIT System
Not (Keyneisan or Austrian) Monetary System
Glass-Steagall (and the whole reason Chris Christie was elected is moot, he's obsolete, as Glass-Steagall does better in reality what Chris Christie somehow in fairy tale manner convinced his supporters...which was all WRONG)
I concur. I see the handwriting on the wall. Do some DD. The guy is an arrogant SOB.
I would tell you that you are wrong... but what the heck. I enjoy watching chickens pick at things in traffic.
... Have at it. Knock yourself out. Tell us what you really think.
I doubt you live in NJ. Then you would know. All you hear about is the good he does. Too bad- the treatment is killing the patient.
Try to keep living that Joisey fantasy that property taxes have no limits and public unions create wealth and jobs. Your state is bankrupt because of that mindset.
Well I live in NJ and you are totally wrong. Christie is the first decent politician we've had since we were a colony. Sorry about your wife's union.
"Christie is the first decent politician we've had since we were a colony."
If you're that old to remember then anything is possible. And it is my sister, not wife.
Being in NY, I have a close up view of what's going on in NJ and my perception is that he's doing a good job. Seems like a no nonsense guy who is willing to make the tough decisions and not pander to special interests.
That said, I can see you disagree with my take on things so my question to you is this...
What would you do to balance the budget in NJ? Raising taxes on the rich may raise more money in the short term but might also drive people out of the state over time. Also remember, not all rich people work on Wall Street and $250,000/year is not rich in these parts.
In oil drilling terms, this NJ revision is called a "negative pressure test"... designed to avoid a blowout. It wasn't done properly for Deepwater Horizon. I doubt it's being done properly here.
S&P has lost all credibility.
They never had it to lose.
NJ will be the first state to default and collapse.....you heard it hear first or perhaps somewhere else first
I doubt that. CA is far worse. So is IL. For that matter, I'd venture to say NY crumbles somehwere in between.
you say you live in NJ and yet you still dont realize the situation......must have a public employee in the family
I'm not out of touch with reality. I talk to everyday people. And yes, my sister is a teacher. First hand experience.
Ask yourself a better question: Why is the Govt in charge of educating children? Govt bureaucratic inefficiency is legendary! Where's all the FRNs going? Why not ask the school administrators?
The only rational solution: PRIVATIZE THE SCHOOLS!
NJ is the worst of all by far... yes I live there, is a nice place if you work on Wall St. and live in Colts Neck and golf at the Trump club, for the rest it is an insolvent mess
S&P is as bad as the Wall St. analysts - ratings are buy and hold, seldom rate anything a sell until its price hits bottom.
+1
But schtocks are up 20% since Aug.. how can there be a problem.
Who cares about S&P? The more highly regarded "Cat&Cougar" index has upgraded New Jersey from "skank-minus" to "Bang-daHo+" on expectation that NJ streetwalkers will not go on strike now as was expected earlier, a move that was to be in solidarity with Cairo prostitutes. The Cairo mob done already pimp-handed de beotches fo'shizzle. Walk yo tail out there ho'.
+14 Trillion.
I suppose Jersey Whore is broadcast in other states?
YO, S&P! I got your AA- right HERE!
pretty much the whole north east is screwed. have the same problems in CT just on a smaller scale. bloated buecracies, high taxes and overregulated. The new "idea" is they want charge everybody 5 cents per plastic bag used in the grocery stores to "save the environment." I'm waiting for the state law that tell me how sheets of toilet paper i can use to wipe my ass.
This state will go insolvent just watch.