This page has been archived and commenting is disabled.

California Screaming As 4th Muni Bankruptcy Looms in Atwater

Tyler Durden's picture


Whether Atwater, California will join the prodigious ranks of Stockton, San Bernardino, and Mammoth Lakes to become the 4th Muni bankruptcy is up for vote on October 3rd (before a $2mm bond payment in November). As Bloomberg notes, the 28,000-strong Merced county town is suffering under the same weight of public employee costs, lost revenue, and a stagnant economy leaving it with a $3.3 million budget deficit. While some put their hope in the FB IPO, perhaps Bernanke should have mandated investment in AAPL for all these municipal comptrollers? The median income is 19% below the national average as the foreclosure crisis - which saw Atwater's median home price drop by more than half - has depleted property-tax revenues dramatically. "We just started negotiating with our unions and they are going to have to take a major cut," Mayor Joan Faul said. "We hope that once we declare a fiscal emergency, that they will realize that we are definitely in an emergency. If they want to save all the jobs, everyone is going to have to take a cut,"


Via Bloomberg Briefs:

Atwater, California, is going broke under the weight of public employee costs, lost revenue and a stagnant economy, pushing it toward becoming the state’s fourth city to seek bankruptcy protection. The city of 28,000, situated among Merced County’s dairies and almond groves about 100 miles southeast of San Francisco, has a $3.3 million deficit that may leave it insolvent before year’s end, according to budget documents.


Atwater’s City Council is set to vote Oct. 3 on a fiscal emergency declaration that would permit it to follow other California cities – Stockton, San Bernardino and Mammoth Lakes – into bankruptcy court. Across the state, the recession and the foreclosure crisis have depleted property-tax revenue at the same time municipalities are burdened with rising costs including pensions.




The median household income in 2010 was $42,226, 19 percent below the national average of $51,914. Almost a fourth of the population is considered below the poverty line, compared with 13.7 percent statewide, according to U.S. Census figures.


The housing crash cut Atwater’s median home price by more than half, to $140,000 in the fiscal year that ended in June from $336,000 in the same period in 2007. Unemployment surged to 21 percent. That helped send the city’s tax revenue plummeting more than one-fifth since 2007.




Under labor contracts, the city pays all of an employee’s 8 percent mandatory contribution for pension costs and 7 percentage points of the 9 percent for police and firefighters. Health-care premiums increased by 15 percent in 2011 and are forecast to jump 10 percent next year.


To help balance the books, Atwater has mostly depleted its cash reserves, fired 30 percent of its 120 workers since 2008 and may need to trim another third, Faul said. The city is in talks with unions for concessions from police officers and rank-and-file city workers, Faul said.


“We just started negotiating with our unions and they are going to have to take a major cut,’’ Faul said. “We hope that once we declare a fiscal emergency, that they will realize that we are definitely in an emergency. If they want to save all the jobs, everyone is going to have to take a cut,’’ she continued.


To make matters worse, the city is facing a $2 million payment on bonds in November, according to the budget documents.


Standard and Poor’s lowered its underlying rating on the Atwater Public Financing Authority’s wastewater revenue bonds to BBB- from A on Sept. 24, citing the city’s potential move toward bankruptcy.


Under a law signed by Brown last year, cities seeking bankruptcy protection must first declare a fiscal emergency or hold talks with creditors through a mediator. Municipalities can file for court protection if mediation doesn’t bring a resolution in 60 days or if the city runs out of money. The law was sought by unions after Vallejo went bankrupt in 2008 and asked a court to help it void labor contracts.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 09/26/2012 - 10:33 | 2831862 icanhasbailout
icanhasbailout's picture

Free Meredith Whitney!

Wed, 09/26/2012 - 10:39 | 2831867 GetZeeGold
GetZeeGold's picture



No problem.....Moonbeam Jerry will save us.


Meredith Whitney is free to go....just as soon as you give us Jon Corzine.


Wed, 09/26/2012 - 10:41 | 2831905 MillionDollarBonus_
MillionDollarBonus_'s picture

Doomer ZHers couldn't be more wrong about muni bonds. Our Federal government and Federal Reserve have made a solid commitment to keep rates low for an extended period, and nowhere did they exclude muni bonds from that pledge. The 30 year treasury yield sits at a phenomenal 2.81%, and the yields on California munis are set to plummet in line with this benchmark. There is fundamentally no difference between the full faith and credit of our congress, and the full faith and credit of our state leaders. They are both equally trustworthy and competent, and Muni bond yields will reflect this fact, regardless of the doomer hypothesizing on this site. 

Wed, 09/26/2012 - 10:42 | 2831911 Pladizow
Pladizow's picture

Dont feed the Troll!

No negative, No positive, No comments!

Wed, 09/26/2012 - 10:45 | 2831923 JPM Hater001
JPM Hater001's picture

"We hope that once we declare a fiscal emergency, that they will realize that we are definitely in an emergency."

Is this MDB's home town? 

Keep hoping people will come to reality.  Ive been hoping for 3 years. 

Still nothing.

Wed, 09/26/2012 - 13:54 | 2832817 12ToothAssassin
12ToothAssassin's picture

So you cut 30% of the city employees and now are looking at cutting another 30%. At what point are there a negative number of employees not puting in enough money to fund the pensions?

Wed, 09/26/2012 - 15:02 | 2833058 MisterMousePotato
MisterMousePotato's picture

I'd bet dollars to donuts that no public union employee was actually "fired." No, they take out their list of positions, and strike out a bunch that are currently unfilled. ("See? We've eliminated a bunch of positions.") And, public employee retires, but no one is hired to fill their position, as in the past. (Funny how no one notices/cares that they're gone.)

Not the same as firing.

All in the name of fooling the credible that our precious public employee overlords, too, are facing hard times and making sacrifices just like the rest of us.

Wed, 09/26/2012 - 16:04 | 2833314 TruthInSunshine
TruthInSunshine's picture

I just had a conversation with the man yesterday afternoon, who informed me that an ugly rain is about to set in, as many more municipalities run out of dry powder by which they can delay having to tell municipal workers that municipal bankruptcy really is a viable option unless massive wage & benefit concessions, along with significant head count reductions, aren't obtained.

Wed, 09/26/2012 - 10:59 | 2831985 Dead Canary
Dead Canary's picture

Hey, I like Million Dollar Brainless.

Wed, 09/26/2012 - 11:07 | 2832023 TheCanadianAustrian
TheCanadianAustrian's picture

For the love of god, get a sense of humor.

Wed, 09/26/2012 - 11:12 | 2832056 unununium
unununium's picture

Bring back the rack P.

Wed, 09/26/2012 - 10:46 | 2831937 EscapeKey
EscapeKey's picture

There is fundamentally no difference between the full faith and credit of our congress, and the full faith and credit of our state leaders.

...except this whole munis filing for bankruptcy, I guess.

Oh well, no doubt coming to a state near yours, to be followed by sovereign defaults.

Wed, 09/26/2012 - 10:54 | 2831969 Clashfan
Clashfan's picture

On another note, GW and Banzai are both featured/mentioned in the latest Max Keiser show:!

Wed, 09/26/2012 - 11:38 | 2832214 NotApplicable
NotApplicable's picture

Max Keiser is either controlled dissent, extremely ignorant, or some combination of the two.

He is just another faux Pied Piper who sings the song of taking on Wall St., all while denigrating its only true, coherent opposition (Austrian Economics).

Unless he starts acting like an adult in the case of Tom Woods (which doesn't seem likely), he's the classic example of Stalin's "useful idiot." (or what I call "self-propelled tools")

Wed, 09/26/2012 - 14:22 | 2832933 Clashfan
Clashfan's picture

This may be--or not.

Not everyone who disagrees with the Austrians does so as a result of conspiracy, believe it or not.

A lot of people say the same stuff about Alex Jones. Not everyone who disbelieves that "the Jews" run everything is a shill for them, either.

I do not know if Max fits this bill or not, but he (like Alex Jones) presents a lot of good, useful information.

There are good, logical cases against Hayek and the Austrians, too.

Beware of the "either or" fallacy--false dilemma. You are saying that one either has to support the Austrians' theories or that that person is a shill or "useful idiot." Until I see more info, I don't buy it.

Wed, 09/26/2012 - 17:35 | 2833720 Hooter Shaker
Hooter Shaker's picture

Rock The Casbah!

Wed, 09/26/2012 - 16:38 | 2833472 ronaldawg
ronaldawg's picture

I wrote about Max Keiser on this site yesterday - on my watching of - all he does is rail against wealth and the 1%.  He never gives any opinion on how should the economy be run, what he would do.  Isn't he one of the 1% - I can't believe he is living in a cardboard box somewhere....

I think most readers/commenters at Zerohedge would answer that question "give us real capitalism" not the phony Obama corporate cronyism we have now.

Wed, 09/26/2012 - 11:21 | 2832114 toady
toady's picture

The City of Glendale is looking to jump on the default bandwagon here in AZ.

They built just short of a billion worth of football & hockey arenas and now they can't pay for them. They're talking about pulling a Camden and laying off their police force, so I imagine defaulting is next...

Wed, 09/26/2012 - 11:31 | 2832164 blunderdog
blunderdog's picture

Well at least it's not "socialism" sinking Glendale.

Superbowl 2015!

Wed, 09/26/2012 - 11:40 | 2832228 toady
toady's picture

Yep. At least they got a couple of nice buildings out of it.

Wed, 09/26/2012 - 11:50 | 2832270 Bay of Pigs
Bay of Pigs's picture

"pulling a Camden"

New buzzword all across 'Mericka......FUCK YEAH!

Wed, 09/26/2012 - 11:43 | 2832240 greyghost
greyghost's picture

no no people are not reading the story line as presented " IT IS ALL ABOUT THE WORKER BEES IT IS ALL THEIR FAULT"!!!!!! has nothing to do with crony goverment projects, for crony local business.....never, never, never!

Wed, 09/26/2012 - 11:38 | 2832213 Uncle Remus
Uncle Remus's picture

Hey, you've still got Sheriff Joe! Isn't Glendale boxed in these days? Just chase them over the city line.

Then again, there's Maryvale...

Wed, 09/26/2012 - 12:59 | 2832615 toady
toady's picture

That's what they are saying. Sheriff Joe is the county sheriff, so technically he is responsible for the entire area, including Glendale. The sheriff already provides police services to unincorporated areas, so they throw substantially less money than they pay the city cops to the sheriff, and POOF, all the police union obligations go out the window.

Wed, 09/26/2012 - 11:04 | 2832001 SokPOTUS
SokPOTUS's picture

MDB = The Bernank

Wed, 09/26/2012 - 11:16 | 2832083 Shevva
Shevva's picture

Tractor factory jobs for all union works.

Statues of your illustrious leaders on every street corner

And the HSA (Happy Security Authority) to beat those that don’t smile from ear to ear when walking down the street.

Wed, 09/26/2012 - 11:26 | 2832135 toady
toady's picture

The beatings will continue until moral improves.

Wed, 09/26/2012 - 11:33 | 2832176 Al Huxley
Al Huxley's picture

Well, you're definitely spot on with the 'equally trustworthy and competent' part.

Wed, 09/26/2012 - 11:52 | 2832283 Defiant1968
Defiant1968's picture

I agree - finally someone with some common sense around here


Wed, 09/26/2012 - 12:35 | 2832508 Overfed
Overfed's picture

That's some funny shit, I don't care who ya' are!

Wed, 09/26/2012 - 16:10 | 2833355 cranky-old-geezer
cranky-old-geezer's picture



There is fundamentally no difference between the full faith and credit of our congress, and the full faith and credit of our state leaders.

Then why are munis bankrupting moron?

Wed, 09/26/2012 - 11:20 | 2832108 atomicwasted
atomicwasted's picture

At least Jerry Brown dismantled the $1 billion/year "redevelopment agencies," which were just ways to funnel tax money to politically-connected developers.  It's more government shrinkage - the actual abolition of government agencies - then Schwarzenegger or Wilson ever managed.

Wed, 09/26/2012 - 11:46 | 2832253 NotApplicable
NotApplicable's picture

It's not like he had much of a choice, as his predecessors burned up all of the available stalling time.

Well, I guess he could always go full retard, and pretend his IOUs are both infinite and valuable.

My guess is that soon after the re-selection all supports will be removed so that everything comes crashing down (except prices for necessities), and Uncle Ben will start bailing out the states directly, ending once and for all the idea of any state having any degree of independence from DC control.

Not that they aren't that way already (see unemployment insurance "loans"), but it's about to get much, much larger (ala Johnson's "Great Society").

Wed, 09/26/2012 - 12:00 | 2832324 Almost Solvent
Almost Solvent's picture

If this happens, it will be fun to watch states like Texas, Florida, Wisconsin, Nevada, etc. with Red-Team governors bend over and receive the full Bennie penetration up the poop shoot along with their Blue-Team sister states.

Then maybe some folks that think there is any real difference between Red-Team / Blue-Team will awake from their slumber when everyone is getting the Bennie fist.

Wed, 09/26/2012 - 12:50 | 2832582 LoneCapitalist
LoneCapitalist's picture

If you dont think there is any difference between the way states like Texas and Wisconsin are run and the way the rest of the country is run, you need to pay more attention.

Wed, 09/26/2012 - 12:57 | 2832609 Almost Solvent
Almost Solvent's picture

That was not my point, my point was that if the Feds are going to send Bennie bucks into the states as the comment above stated, then eveyone gets to see the charade for what it is exactly because it does not matter how the state is run. Every state would get the Bennie injection.

thanks for the downgrade btw

Wed, 09/26/2012 - 12:55 | 2832598 LoneCapitalist
LoneCapitalist's picture


Wed, 09/26/2012 - 12:18 | 2832426 Son of Loki
Son of Loki's picture

California lifeguards making over $200,000 per year + multi-million dollar pensions....

They deserve to go broke.



Wed, 09/26/2012 - 17:01 | 2833567 Ar-Pharazôn
Ar-Pharazôn's picture

this is the first comment on this video:

"I was wondering where your numbers came from? I checked? the Newport Beach city proposed budget for 2011-2012 and the amount paid to the lifeguards are far less than your numbers"

I m just saying.

Wed, 09/26/2012 - 10:39 | 2831892 Dr. Richard Head
Dr. Richard Head's picture

We need a new Community Reinvestment Act.  /sarc

Wed, 09/26/2012 - 11:02 | 2831995 Comay Mierda
Comay Mierda's picture

wait til QE4.  Benny boy will be buying munis in CA and IL, then the rest of the broke states of amerika

Wed, 09/26/2012 - 14:26 | 2832937 BooMushroom
BooMushroom's picture

Think he will finish monetizing all the MBS's first, or jump in when the muni bankruptcies become a once a week affair?

Wed, 09/26/2012 - 15:15 | 2833096 Dr. Richard Head
Dr. Richard Head's picture

I don't believe he is buying the actual MBS, but the rehypothicated CDOs based on the MBS that are based on market-to-model values. 

Wed, 09/26/2012 - 10:45 | 2831933 Big Swinging Richard
Big Swinging Richard's picture

So many Kalifornians are moving to Oregon and spreading their terminal disease of liberalism, I'm afraid there's not much time left here.  Release the kraken and take that sh!thole of a state down!

Wed, 09/26/2012 - 11:10 | 2832043 insanelysane
insanelysane's picture

Same thing happened to New Hampshire.  Mass-holes moved north for the low taxes and then raised property taxes and fees through the roof.

Wed, 09/26/2012 - 11:30 | 2832155 odatruf
odatruf's picture

insanely - you are wrong about that.  The towns that have seen the greatest population migration from Mass - along the border and up the I-93 and Rt. 3 triangle, have seen their politics become more and more conservative.

People who fled Mass are self-selecting and are precisely those who despise the People's Republic and its taxes and stupid rules.

On the other hand, those who have moved into the Upper Valley and all along the Connecticut River, have turned those towns more and more liberal.

While I don't adhere to the red = good; blue = bad binary, it is a pretty good proxy in this case.



Wed, 09/26/2012 - 11:50 | 2832271 NotApplicable
NotApplicable's picture

How do they manage to live in a state that openly worships Nike?

Or do they drink that flavor of Kool-Aid ("Progressive Sweatshops, Good!") too?

Wed, 09/26/2012 - 12:12 | 2832386 Big Swinging Richard
Big Swinging Richard's picture

#Not, actually, I worked at the Swoosh for a while.  Most sheep on campus are not fully aware of the supply chain and how employing cheap Asian labor fits into the model.  The whole environment over there is seductive, lots of glam working with athletes and all.

Wed, 09/26/2012 - 11:34 | 2832180 greyghost
greyghost's picture

 I just have to laugh anymore about the hit pieces by the likes of bloomberg, fox news and fox business. every article like this always starts with the " pension and labor costs" and never never goes into the blackhole/white elephant pet projects for mayors or local business....never. living just down the road from  san bernardino ca. and their great 17 year regional airport project, a project that has sucked aprox. 700/800 million taxpayer dollars down that blackhole for an airport that has no commercial aircraft business after 17 years. yep, always the worker bees' fault isn't it? hell these morons running san bernardino even went so far as to hire an airport mangement company, a company owned and run by a man that the FAA had banned from the aviation business for corruption! so this management co. then gives the fuel contract to another company that is owned by the same person banned by the FAA!!!! yep, you guessed it, now the fuel company owes the regional airport[taxpayers] over 100 million dollars for fuel!!! but bloomberg, fox news and fox business want you to know that "it is all about pension and labor costs and all the worker bees fault." if these so called "news" networks spent just half the energy talking about the corruption "everywhere" than maybe we could start to correct some serious problems!

Wed, 09/26/2012 - 12:30 | 2832478 snakeboat
snakeboat's picture

She's Hawt

Wed, 09/26/2012 - 12:35 | 2832514 Offthebeach
Offthebeach's picture

SCENE: Home of Mercerd mayor, 2AM.

( phone rings )

MAYOR: " Hello? "
CALLER ( Slurred speach ): " Mr. May've got to rehire, bui..lled-ah-park garage...anything...raises..( Hic )..the fate of the world...
MAYOR: " YOU'RE DRUNK! Who is this?"
CALLER: ( Vomit wretching sounds) Paul Krug...ah...Bernie from Brooklyn ..

Wed, 09/26/2012 - 10:57 | 2831865 slaughterer
slaughterer's picture

OT: Witnessing flash-crash after flash-crash today.  All stop-sweeping and totally algo-driven across many different assets.

Wed, 09/26/2012 - 10:35 | 2831869 Debtonation
Debtonation's picture

California should leave the dollarzone.

Wed, 09/26/2012 - 11:11 | 2832053 insanelysane
insanelysane's picture

The switch to MXP would be fairly easy.

Wed, 09/26/2012 - 11:18 | 2832093 Urban Redneck
Urban Redneck's picture

Give it (and its pension obligations) back to Mexico...

Wed, 09/26/2012 - 10:36 | 2831882 RSBriggs
RSBriggs's picture

Austerity.  Coming soon to a community near you....

Wed, 09/26/2012 - 10:38 | 2831891 GetZeeGold
GetZeeGold's picture



It's happened to school lunchs just this week.


Thanks you can be proud.

Wed, 09/26/2012 - 10:43 | 2831918 otto skorzeny
otto skorzeny's picture

by looking at the size of her ass she's not skipping on the fried chicken. love that shot from behind of her standing next to sarkozy's old lady and Sanish PM's wife.

Wed, 09/26/2012 - 10:46 | 2831932 GetZeeGold
GetZeeGold's picture not for the Socialists.


Wed, 09/26/2012 - 10:46 | 2831934 orangedrinkandchips
orangedrinkandchips's picture


Wed, 09/26/2012 - 21:23 | 2834254 FeralSerf
FeralSerf's picture

"In the United States, chitterlings are an African American culinary tradition and a Southern culinary tradition sometimes called "soul food" cooking. In vernacular terms, chitterlings are often pronounced as chit'lins.

Chitterlings are carefully cleaned and rinsed several times before they are boiled or stewed for several hours. A common practice is to place a halved onion in the pot to mitigate what many regard as a pungent, very unpleasant odor that can be particularly strong when the chitterlings begin to cook. Chitterlings sometimes are battered and fried after the stewing process and commonly are served with cider vinegar and hot sauce as condiments."

Wed, 09/26/2012 - 12:04 | 2832350 ndetmer
ndetmer's picture

Bring back debtor's prison.

Wed, 09/26/2012 - 12:06 | 2832360 ndetmer
ndetmer's picture

Bring back debtor's prison.

Wed, 09/26/2012 - 10:39 | 2831886 orangedrinkandchips
orangedrinkandchips's picture

Whatever you do, the first dollars SHOULD GO TO SHORE UP THE PENSIONS....that is what is FOR ALL UNION PEOPLE!! THAT SOLVES EVERYTHING!


full circle.....i love it....

Wed, 09/26/2012 - 10:41 | 2831903 otto skorzeny
otto skorzeny's picture

Rahm is running propaganda ads in Chi-town about how great the new teacher's contract is- he neglects to say how he's going to break it off in your ass w/ big tax increases.

Wed, 09/26/2012 - 11:21 | 2832113 orangedrinkandchips
orangedrinkandchips's picture

nah, you just wait, he will legalize weed for the city and tax that to high hell to make up the diff...


Wed, 09/26/2012 - 16:40 | 2833482 Panafrican Funk...
Panafrican Funktron Robot's picture

Would be great for tourism!

Wed, 09/26/2012 - 10:38 | 2831887 Dr. Engali
Dr. Engali's picture

Maybe Ben should consider giving the munis some of that freshly printed fiat instead of the European the way shouldn't Meredith be taking a victory lap right about now?

Wed, 09/26/2012 - 10:43 | 2831917 fonzannoon
fonzannoon's picture

If they can give that money to the munis and have the munis immediately give it to the banks I think Ben would actually consider it. Maybe they have the union guys take a big hit, then deposit 100k each into a brokerage account and for them and mandate they buy apple. We have to think this through but there are still tools like these available.

Wed, 09/26/2012 - 10:38 | 2831889 bankonzhongguo
bankonzhongguo's picture

Strangely I actually know something about this.

It seems the former City Manager was "fired" in a late night meeting for unknown reasons.

The Chief of Police is now City Manager.  The city attorney has resigned as well.

The police are now in control of the city, but do not have enough money to pay them.



Wed, 09/26/2012 - 10:40 | 2831898 Poetic injustice
Poetic injustice's picture

You can always confiscate them as fines. Like "Broken window, not properly mowed lawn, etc".

Just your imagination is limit to that.

Wed, 09/26/2012 - 10:56 | 2831976 Tijuana Donkey Show
Tijuana Donkey Show's picture

Already happening. Why do you think Cali has all those red light cameras and speed traps? You can get fees without the police.

Wed, 09/26/2012 - 11:08 | 2832030 Poetic injustice
Poetic injustice's picture

Yes, but you need muscle to *enforce* it and make example of terr... ahem, non-compliant people.

Wed, 09/26/2012 - 10:51 | 2831954 LongSoupLine
LongSoupLine's picture

The police are now in control of the city...


This will end well...I'm certain of it.

Thu, 09/27/2012 - 00:10 | 2834510 RiverRoad
RiverRoad's picture

Thank God they can't print.

Wed, 09/26/2012 - 10:39 | 2831893 otto skorzeny
otto skorzeny's picture

good luck getting the "heroes" to take ANY kind of a cut-don't you know we F***ING OWE THEM A LIVING. how else are they gonna buy their entitled wives a new GMC Denali and new pools for their McMansions? keep working slaves to support the beast.

Wed, 09/26/2012 - 10:55 | 2831972 TheCanadianAustrian
TheCanadianAustrian's picture

Buying their wives a GMC Denali to go with their mansion you say?;cqn,fixedpos%3Df...

Wed, 09/26/2012 - 11:03 | 2831996 otto skorzeny
otto skorzeny's picture

no-I mean the kind that cost $120 to fill up. I'm sure the local fatties are going to ride a bike.

Wed, 09/26/2012 - 10:39 | 2831895 Motorhead
Motorhead's picture

When's that state going to fall into the ocean?  (Well, at least the southern part.)  Bunch of toads running the show there.

Wed, 09/26/2012 - 10:41 | 2831902 TahoeBilly2012
TahoeBilly2012's picture

ZH Can you put these places on a Muni BK Google map with pins? I live in Cal, but Atwater? Never dated any gals there and I can't think there was any reason to know where it is...need a pin board for referrence.

Wed, 09/26/2012 - 10:45 | 2831927 SilverDOG
SilverDOG's picture

C'mon guy. Google it.

Wed, 09/26/2012 - 11:55 | 2832289 NotApplicable
NotApplicable's picture

Much easier to rant here, it seems.

Edit: wait, here it is!

Wed, 09/26/2012 - 13:43 | 2832773 TahoeBilly2012
TahoeBilly2012's picture

Well, you finally pinpointed Atwater. But we are looking for fiscal bankruptcy not moral, heck you don't even need a map for that. I STILL have no clue where "Atwater" CA is and I do know where "Weed" and "Buttonwillow" are, so go figure....what baseball team do you root for in Atwater (?), maybe that's a clue....GO A'S BTW!!

Wed, 09/26/2012 - 22:13 | 2834344 FeralSerf
FeralSerf's picture

The old (closed) Castle AFB.  About 30 miles south of Modesto.  Castle was about the only employer.  It's a long way to Weed or Buttonwillow, but not very far from the Foster Farms chicken killing operation.

Wed, 09/26/2012 - 14:43 | 2832997 BooMushroom
BooMushroom's picture

About an hour south of Stockton along Sr-99. We'll start using a pin map when there're more than half a dozen or so. Like by year's end.

Wed, 09/26/2012 - 10:42 | 2831908 Elmer Fudd
Elmer Fudd's picture

Nice, a S&P downgrade just 5 weeks before a bond default, now that is some powerful analysis.

Wed, 09/26/2012 - 10:42 | 2831912 wagthetails
wagthetails's picture

please please please, don't bail out states.  its not like we dont' have a recent model to view.  and i live in one of the bottom 5 states according to fiscal strength. 

Wed, 09/26/2012 - 10:58 | 2831984 Tijuana Donkey Show
Tijuana Donkey Show's picture

They did until the election. Why do you think there was a HUGE transfer for "high speed rail?" That was cash from the feds to keep CA open until Nov after the elections. Then, POW, right in the kisser.

Wed, 09/26/2012 - 10:44 | 2831919 SilverDOG
SilverDOG's picture

There's gold in them there hills.

Wed, 09/26/2012 - 10:45 | 2831926 dryam
dryam's picture

Couldn't have seen this coming.

Wed, 09/26/2012 - 10:45 | 2831928 Curt W
Curt W's picture

Everywhere you look, it is public unions excessive greed that is ripping the government a new one.

Wed, 09/26/2012 - 15:11 | 2833081 MisterMousePotato
MisterMousePotato's picture

Everywhere you look, it is public unions excessive greed that is ripping the TAXPAYERS a new one. (In fact, government is merely the means by which the public unions do so.)

Wed, 09/26/2012 - 10:46 | 2831930 larz
larz's picture

somebody please hit reset this is beyond retard 

Wed, 09/26/2012 - 10:46 | 2831935 Kaiser Sousa
Kaiser Sousa's picture

"the recession ended in 2009..."

"what you talkin bout Willis....."

Wed, 09/26/2012 - 10:52 | 2831963 insanelysane
insanelysane's picture

Housing market is way up, employment is way up, consumer confidence way up!  At least that is what MSM is reporting.

(SouthPark had an episode, think it was a global warming one, reporter says we are reporting X and the anchors ask, so you are seeing X, and the reporter says No, we are reporting that X is happening.)

Wed, 09/26/2012 - 10:46 | 2831936 rustymason
rustymason's picture

To save billion$, simply eliminate the millions of school administrators. They are completely, absolutely, 100% unnecessary. The teachers and the students do the only work that matters, and the maintenance people keep the buildings and buses running. Everyone else should be sent home. That goes for every "education" department, from the local admin buildings all the way up to the entire Department of Education (sic). Shut 'em down.

Wed, 09/26/2012 - 11:06 | 2832012 Dexter for President
Dexter for President's picture

If we send the many overpaid administrators home then whom do we pay multi hundreds of thousands of dollars to in order to continue degrading the education institutions...not to mention the multi million dollar pensions??????? If we cut these out then budgets will become managable...what are you thinking about????

Wed, 09/26/2012 - 11:59 | 2832318 NotApplicable
NotApplicable's picture

Without the Nazi administrators, how can one ensure the proper indoctrination of the state's children? I mean, it's not like one can trust that many individual teachers to render proper respect for the bankrupt criminality d.b.a. "The State of California."

The assimilation will continue until morale disappears.

Wed, 09/26/2012 - 10:47 | 2831939 Lost Wages
Lost Wages's picture

The greatest slacker rock/indie rock band of all time came from Stockton. So bankruptcy is, like, hip now.

Wed, 09/26/2012 - 13:42 | 2832772 Ness.
Ness.'s picture

+1 on the Pavement vid.

Wed, 09/26/2012 - 10:47 | 2831940 Johari Ichiban
Johari Ichiban's picture

If Atwater could tax meth, it would have a budget surplus.

Wed, 09/26/2012 - 10:48 | 2831944 kevinearick
kevinearick's picture

As you can plainly see, if you care to look, wars are between capital and their middle classes, which they employ to prescribe labor, until they go bust. the participants can't make their economy, university technology parks with immigration replacement over time, work, so, rather than employing labor, they are throwing each other under the bus.

let them have their wars; they "earned" the privelege.

Wed, 09/26/2012 - 11:01 | 2831991 hapless
hapless's picture

Of course.  Atwater is actually a private enterprise in drag.

Wed, 09/26/2012 - 10:49 | 2831948 Sudden Debt
Sudden Debt's picture

and what about that California gold rush? You sure there's nothing left to dig up?! Sure Sure?!

Wed, 09/26/2012 - 12:23 | 2832447 A Nanny Moose
A Nanny Moose's picture

Sorry...Faceplant and Solyndra didn't work out.

Wed, 09/26/2012 - 10:51 | 2831956 Chief_Illiniwek
Chief_Illiniwek's picture

Here is an interesting document presented on September 12th by the legal team of CalPERS.  It summarizes their position that municipal bankruptcies in California do not effect the obligations claimed by CalPERS members.


So, for all of you in CA not yet covered by CalPERS, get a move-on and enjoy the show.

Wed, 09/26/2012 - 11:24 | 2832125 Blizzard_Esq
Blizzard_Esq's picture

Thanks for that.... wow..... Callifornia is fucked. 

Wed, 09/26/2012 - 11:37 | 2832203 blunderdog
blunderdog's picture

Very nice.

You'd think they have some kind of serious problem there, but maybe they can just print California greenbacks for the CalPERS retirees.

That should work.  Same basic strategy works for the Feds.

Wed, 09/26/2012 - 12:03 | 2832341 NotApplicable
NotApplicable's picture

Oh, that's just hilarious!

Never thought I'd see Cali sporting a "State's Rights" defense, LOL.


Wed, 09/26/2012 - 12:05 | 2832356 JamesBond
JamesBond's picture

a head in the sand document written by lawyers trying to impress.  

the union won't know what hit them when all is said and done.



Wed, 09/26/2012 - 10:51 | 2831957 caimen garou
caimen garou's picture

And they loaded up the truck and got the hell out of beverly,hills that is,higher taxes,broke cities,ageing movie stars,and empty swimming pools

Wed, 09/26/2012 - 10:54 | 2831970 insanelysane
insanelysane's picture

Need to do a reverse Beverly Hillbillies show.  Maybe the zombies will finally wake up.

Wed, 09/26/2012 - 11:12 | 2832054 RSBriggs
RSBriggs's picture

The Brits did - See "Green Acres"...

Wed, 09/26/2012 - 10:57 | 2831962 jjsilver
jjsilver's picture

James Traficant's U.S. Bankruptcy Speech

The Bankruptcy of The United States

United States Congressional Record, March 17, 1993 Vol. 33, page H-1303

Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:

"Mr. Speaker, we are here now in chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner’s report that will lead to our demise.

It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.

The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: "The U.S. Secretary of Treasury receives no compensation for representing the United States."

Gold and silver were such a powerful money during the founding of the united states of America, that the founding fathers declared that only gold or silver coins can be "money" in America. Since gold and silver coinage were heavy and inconvenient for a lot of transactions, they were stored in banks and a claim check was issued as a money substitute. People traded their coupons as money, or "currency." Currency is not money, but a money substitute. Redeemable currency must promise to pay a dollar equivalent in gold or silver money. Federal Reserve Notes (FRNs) make no such promises, and are not "money." A Federal Reserve Note is a debt obligation of the federal United States government, not "money." The federal United States government and the U.S. Congress were not and have never been authorized by the Constitution for the united states of America to issue currency of any kind, but only lawful money, gold and silver coin.

It is essential that we comprehend the distinction between real money and paper money substitute. One cannot get rich by accumulating money substitutes, one can only get deeper into debt. We the People no longer have any "money." Most Americans have not been paid any "money" for a very long time, perhaps not in their entire life. Now do you comprehend why you feel broke? Now, do you understand why you are "bankrupt," along with the rest of the country?

Federal Reserve Notes (FRNs) are unsigned checks written on a closed account. FRNs are an inflatable paper system designed to create debt through inflation (devaluation of currency). when ever there is an increase of the supply of a money substitute in the economy without a corresponding increase in the gold and silver backing, inflation occurs.

Inflation is an invisible form of taxation that irresponsible governments inflict on their citizens. The Federal Reserve Bank who controls the supply and movement of FRNs has everybody fooled. They have access to an unlimited supply of FRNs, paying only for the printing costs of what they need. FRNs are nothing more than promissory notes for U.S. Treasury securities (T-Bills) - a promise to pay the debt to the Federal Reserve Bank.

There is a fundamental difference between "paying" and "discharging" a debt. To pay a debt, you must pay with value or substance (i.e. gold, silver, barter or a commodity). With FRNs, you can only discharge a debt. You cannot pay a debt with a debt currency system. You cannot service a debt with a currency that has no backing in value or substance. No contract in Common law is valid unless it involves an exchange of "good & valuable consideration." Unpayable debt transfers power and control to the sovereign power structure that has no interest in money, law, equity or justice because they have so much wealth already.

Their lust is for power and control. Since the inception of central banking, they have controlled the fates of nations.

The Federal Reserve System is based on the Canon law and the principles of sovereignty protected in the Constitution and the Bill of Rights. In fact, the international bankers used a "Canon Law Trust" as their model, adding stock and naming it a "Joint Stock Trust." The U.S. Congress had passed a law making it illegal for any legal "person" to duplicate a "Joint Stock Trust" in 1873. The Federal Reserve Act was legislated post-facto (to 1870), although post-facto laws are strictly forbidden by the Constitution. [1:9:3]

The Federal Reserve System is a sovereign power structure separate and distinct from the federal United States government. The Federal Reserve is a maritime lender, and/or maritime insurance underwriter to the federal United States operating exclusively under Admiralty/Maritime law. The lender or underwriter bears the risks, and the Maritime law compelling specific performance in paying the interest, or premiums are the same.

Assets of the debtor can also be hypothecated (to pledge something as a security without taking possession of it.) as security by the lender or underwriter. The Federal Reserve Act stipulated that the interest on the debt was to be paid in gold. There was no stipulation in the Federal Reserve Act for ever paying the principle.

Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until the Federal Reserve Act (1913)

"Hypothecated" all property within the federal United States to the Board of Governors of the Federal Reserve, -in which the Trustees (stockholders) held legal title. The U.S. citizen (tenant, franchisee) was registered as a "beneficiary" of the trust via his/her birth certificate. In 1933, the federal United States hypothecated all of the present and future properties, assets and labor of their "subjects," the 14th Amendment U.S. citizen, to the Federal Reserve System.

In return, the Federal Reserve System agreed to extend the federal United States corporation all the credit "money substitute" it needed. Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the federal United States didn’t have any assets, they assigned the private property of their "economic slaves", the U.S. citizens as collateral against the unpayable federal debt. They also pledged the unincorporated federal territories, national parks forests, birth certificates, and nonprofit organizations, as collateral against the federal debt. All has already been transferred as payment to the international bankers.

Unwittingly, America has returned to its pre-American Revolution, feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, We the People are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. We the people have exchanged one master for another.

This has been going on for over eighty years without the "informed knowledge" of the American people, without a voice protesting loud enough. Now it’s easy to grasp why America is fundamentally bankrupt.

Why don’t more people own their properties outright?

Why are 90% of Americans mortgaged to the hilt and have little or no assets after all debts and liabilities have been paid? Why does it feel like you are working harder and harder and getting less and less?

We are reaping what has been sown, and the results of our harvest is a painful bankruptcy, and a foreclosure on American property, precious liberties, and a way of life. Few of our elected representatives in Washington, D.C. have dared to tell the truth. The federal United States is bankrupt. Our children will inherit this unpayable debt, and the tyranny to enforce paying it.

America has become completely bankrupt in world leadership, financial credit and its reputation for courage, vision and human rights. This is an undeclared economic war, bankruptcy, and economic slavery of the most corrupt order! Wake up America! Take back your Country."



The present credit system we have and use as “money” is anti-constitutional and has been erected to transfer the wealth of the American people to the elite operators of this system. Larry Becraft


Wed, 09/26/2012 - 11:34 | 2832188 odatruf
odatruf's picture

Beam me up, Mr. Speaker. I yield back whatever dignity remains....


Wed, 09/26/2012 - 12:04 | 2832346 Almost Solvent
Almost Solvent's picture

His hairpiece was classic

Wed, 09/26/2012 - 12:11 | 2832381 kevinearick
kevinearick's picture

Throw the admirals overboard...

Wed, 09/26/2012 - 12:42 | 2832491 Blizzard_Esq
Blizzard_Esq's picture

The Congressional record does not state this. This is fake bullshit that someone made up.



Mr. TRAFICANT . Mr. Speaker, we are here now in chapter 11.

Members of Congress are official trustees presiding over the greatest reorganization of any bankrupt entity in world history, the U.S. Government.

We are setting forth hopefully a blueprint for our future. There are some who say it is a coroner's report that will lead to our demise.

I am going to support the rule. I am not sure yet if I will support this budget. I want to hear an awful lot more, not being a member of the committee, and I am not going to vote for things I do not understand or do not like, but let there be no mistake. After 12 years of Ronald Reagan and George Bush, we are standing here.

Let me say this to the minority party. Every program that Ronald Reagan wanted in 1981, he got. Reagan got it. There was a Republican Senate majority and there were 70 Democrats in this House that might as well have been Republicans, and we have the program.

The major assumption was very simple. We are going to cut taxes, put money in the pockets of the American people, and when they spend this money our gross national product is going to rise so great that even though we reduced your tax liability on a percentile basis, we will balance the budget, quoting Ronald Reagan, in 1982. It is going to take the fall of our Congress, I think, for that to happen.

Mr. Speaker, let us give this new administration a chance. Democrats gave Ronald Reagan a chance.

But let me give one word of caution here today. America already has race wars, let us be honest about it. We already have gender wars, let us be honest about it. We already have age wars, let us be honest about it.

One thing this Congress had better not get involved in and get trapped into is a class war on money. In America, if you can not earn all that you can, there is something wrong and there is no more a spirit of free enterprise.

I want to say this to the Members. We may talk about taxing the rich, but the rich people have already taken their companies and their jobs out of America. Be careful that the rich people do not take their money out of America, because the government already raises our kids, defends our families, educates our kids, feeds our kids, houses our kids, and the government it doing a very poor job of it. I think mom and dad would be better utilized there once again.

So I am going to listen to the debate. I do not know if I will vote for this budget.

Finally, I do not know if the budget makes one damn bit of difference, because we waive it all the time and I do not think we have ever followed it. I think we have an excellent chairman who worked hard. If we are going to have budget, we should follow it. If not, we once again as Members waste both our time and the people's time.

Let me say this just in closing. Today is not the mother of all debates and the mother of all decisions. When that tax package comes, you will have the mother of all votes on the floor.

Let me say this, I am not for voting any more taxes on the backs of the American people, because I believe the tax of 1990 put on right here today, and I am very concerned about the tax package being discussed in this Congress.

I am one Democrat who believes we should stimulate the private sector. We already have more government jobs than factory jobs, and I think that is an indictment of our Congress.

One basic tenet to this Constitution is life, liberty, and the pursuit of happiness, and there can be no life, liberty, or pursuit of happiness in America without job.

I would like to see the mother of all debates center around the jobs bill.

Mr. GOSS. Mr. Speaker, I yield 4 minutes to the gentleman from Georgia [Mr. Gingrich], the distinguished minority whip.



Wed, 09/26/2012 - 15:07 | 2833075 kevinearick
kevinearick's picture

Gotta love this internet thingy... :).

Wed, 09/26/2012 - 10:57 | 2831979 Storm Bringer
Storm Bringer's picture

Are Americans paying attention; the municpality is reporting an increase in healthcare premiums.  I thought ObamaCare was going to reduce premiums?  Oh yeah, I will just stick my head back in the sand.


Wed, 09/26/2012 - 11:20 | 2832107 insanelysane
insanelysane's picture

Govt workers aren't part of Obamacare just like they are not part of social security.

Wed, 09/26/2012 - 16:01 | 2833305 BooMushroom
BooMushroom's picture

They can exempt themselves from the law, but not from the math.

Wed, 09/26/2012 - 11:01 | 2831992 sangell
sangell's picture

Some bankrupt municipality should offer it services as a money 'laundry' by selling its muni bonds on a cash only basis.

Wed, 09/26/2012 - 11:01 | 2831993 NRGIsFree
NRGIsFree's picture

Big deal.. Have Ben do a flyover with his helicopter. Problem solved.

Wed, 09/26/2012 - 11:07 | 2832022 JustObserving
JustObserving's picture

The US is bankrupt too:


The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.

This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO’s short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.

Part of the fiscal gap’s growth reflects changes in policy, such as the Bush and Obama tax cuts, the introduction of Medicare Part D, and the expansion of defense spending. Part reflects “natural” growth of existing programs, including growth in Medicare and Medicaid reimbursement rates. And part reflects the demographic time bomb U.S. politicians are blithely ignoring.

When fully retired, 78 million baby boomers will collect, on average, more than 85 percent of per-capita gross domestic product ($40,000 in today’s dollars) in Social Security, Medicare and Medicaid benefits. Each passing year brings these outlays one year closer, which raises their present value.


Wed, 09/26/2012 - 19:36 | 2832131 ThisIsBob
ThisIsBob's picture

Obama to the rescue.  I see that he is cracking down on weed sellers in California on the theory, presumably, that you must have been stoned out of your gourd to hold California municipal debt.

Wed, 09/26/2012 - 11:32 | 2832165 Buzz Fuzzel
Buzz Fuzzel's picture

Yes but they have cars which drive themselves.

Wed, 09/26/2012 - 11:34 | 2832181 TroyPDX
TroyPDX's picture

If you extrapolate current trends into the future we're heading towards the day when all that's left of America is a small percentage of elite ultra wealthy, a middle class comprised entirely of government workers and pensioners, and the rest of us fighting for jobs to pump their gas. 

Wed, 09/26/2012 - 12:56 | 2832607 kevinearick
kevinearick's picture

The future is here for the majority, which voted for it.

Wed, 09/26/2012 - 11:38 | 2832207 JR
JR's picture

When will immigration be included in the explanation of economic crisis? For example, California is beset with rapidly changing demographics, which are not being addressed, only exacerbated.

The Demographics of Atwater (US Census 2000):

41.51% Hispanic or Latino; White alone 44.33%;  21 years and older 60.46%; owner-occupied housing units 59.8%; Renter-occupied housing units 40.2%;

The Demographics of Atwater (US Census 2010)

The 2010 United States Census reported that Atwater had a population of 28,168. The racial makeup of Atwater was 18,410 (65.4%) White, 1,225 (4.3%) African American, 364 (1.3%) Native American, 1,416 (5.0%) Asian, 76 (0.3%) Pacific Islander, 5,300 (18.8%) from other races, and 1,377 (4.9%) from two or more races. Hispanic or Latino of any race were 14,808 persons (52.6%).,_California

Atwater’s 2010 Crime Rate Indexes scores compared to the national average of 100, was 121 for Assault Risk, 118 for Burglary Risk, but below average on Murder, Rape, Robbery, Larceny and Motor Vehicle Theft, with a Total Crime Risk of 85.

Atwater is 8 miles west-northwest of Merced.

Wed, 09/26/2012 - 12:02 | 2832332 q99x2
q99x2's picture

This is an excellent precedent for not paying anyone anything on debt contracts ever again.

Head em up move em out ... Banksters.

Wed, 09/26/2012 - 12:07 | 2832364 Keyser
Keyser's picture

Gee, all those public sector employees and retirees finally get to take a bite out of the sh1t sandwich the rest of us have been eating for years. Couldn't come too soon. If the unions balk, fire everyone, just like Reagan did in the 80's. I'm sure there are lots of people willing to fill those positions, without a union to fuck things up. 


Wed, 09/26/2012 - 12:37 | 2832524 SubjectivObject
SubjectivObject's picture

Why is pioneering Valejo always left out of the numbers?

First to be forgotten.

Wed, 09/26/2012 - 13:20 | 2832708 semperfi
semperfi's picture

I have relatives in Valejo - was a nice middle class city 40 years ago - now just another California shithole. What a shame.

Thu, 09/27/2012 - 01:06 | 2834551 Joseph Jones
Joseph Jones's picture

Visited Napa six months sucks there now, used to be pretty nice. 

Wed, 09/26/2012 - 12:50 | 2832581 kevinearick
kevinearick's picture

If you think things are getting bad in or an nh, check out their future in vt, which is where wall to wall mason wa is heading at light speed.

Wed, 09/26/2012 - 15:18 | 2833105 MisterMousePotato
MisterMousePotato's picture

Love that last one. Can't wait for the public unions to sell off, oh, say, Yosemite to quick stuff the dough in their pockets a la Greek islands.

Wed, 09/26/2012 - 17:08 | 2833598 Bastiat
Bastiat's picture

Yosemite is National -- Bernanke will end up with that one.

Do NOT follow this link or you will be banned from the site!