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"The City Is On The Verge Of Collapse" - East Cleveland Is Begging To File For Bankruptcy
With Detroit emerging from bankruptcy yesterday, its experience under Chapter 9 was apparently so successful (occasional subsequent massive power outage notwithstanding), that suddenly every other insolvent city in the US is also i) admitting it is in dire straits and ii) hoping to recreate the Detroit experience.
Enter East Cleveland.
As Bloomberg Brief reports, the council president in East Cleveland said if she had her way, the city would follow Detroit's path and become Ohio's first municipality to file for bankruptcy to help solve its fiscal woes.
State Auditor Dave Yost said the suburb of 17,500, where oil baron John D. Rockefeller once had a summer estate, is insolvent. Things in the small town, representative of most small cities in middle America, are so bad "the community lacks a working ladder truck in its fire department, had its mobile phones shut off and faces $1.7 million in unpaid bills."
East Cleveland, a city of three square miles, has struggled with its finances for decades, said Finance Director Jack Johnson. About 43 percent of residents live in poverty, almost triple the state level, while median household income, at about $20,600, is less than half the Ohio average, U.S. Census data show
It encountered "the perfect storm'' after the recession, with the 2011 closing of a Cleveland Clinic hospital that generated about $1.5 million a year in income taxes and the loss of about half its annual $3 million in state aid since 2010, he said. "There have always been challenges here, but those two things just sort of made it devastating,'' he said.
City officials say the options include asking voters to raise taxes, deeper spending cuts, merging with Cleveland or filing for bankruptcy protection.
Of course, none of those options would rest well with the voters who elect the city officials in well-paying jobs, so the alternative is to simply go straight for the shortcut that cuts liabilities by more than half while, most importantly, preserving city official jobs. After all, why engage in painful reform when someone else (preferably someone who doesn't vote you into office) can bite the bullet.
Council President Barbara Thomas favors the latter, following the Motor City's record $18 billion bankruptcy in July 2013. Detroit was able to reduce its liabilities by $7 billion and exited Chapter 9 as of today.
"We might come out a little bit better, just like Detroit,'' Thomas said. "Isn't it better to clear away your debt in a proven process than to keep trying to rob Peter to pay Paul?''
Ohio has rebounded from the recession that ended in 2009, recovering all but a quarter of the 375,000 jobs it lost.
The state might have, but the small suburb city has not: "Yost sent a Nov. 21 letter to the commission overseeing its finances saying East Cleveland is insolvent, and that its recovery plan "is inadequate to return it to fiscal health in this current environment.''
"It is fair to say the City is on the verge of collapse,'' Yost wrote.
An East Cleveland bankruptcy would probably cause less of a stir among bondholders than those in Detroit and Central Falls, Rhode Island, said Howard Cure, head of muni research at Evercore Wealth Management LLC, which oversees $5.5 billion.
"Detroit is different because it's the biggest city in Michigan, and Central Falls is different because Rhode Island is such a small state,'' Cure said. "Here, you have a small city in a big state, and I don't think it would garner the same concerns.''
Well, that settles it: time for bonds to eat some more losses. Until, of course, the bondholders who are massively levered themselves, scream bloody murder and threaten a repeat of 2008, slamming any attempts of downside risk, and demanding another blank check bailout or else the entire financial system gets it.
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Cleveland wants to default and declare bankrupcy? LET THEM!!!
BEggars will be beggars. So..
Http://www.hedgeaccordingly.com
PR campaigning for your own website . Nice .
with lebron back in town and johnny football taking the helm all should be well shortly
Cleveland will rise from the ashes or the modern day man will perish.
PR campaigning for your own website . Nice .
EAST Cleveland....
Yes, details matter.
East Cleveland is not Cleveland, just like East Palo Alto is not Palo Alto.
Well, if revenues are insufficient to steal and Do the people's business, then the people can go suck it. I want mine, and I gotta pay him for his vote to keep this crappy job for the graft.
FORWARD SOVIET!
How long until Detroit is in BK again ?
Hey, don't be dissing my beloved OH :) It's EAST Cle, only a few square miles, smaller than the avg Arizona parking lot, less than the distance Johnny Football will be running around behind the line of scrimmage on Sunday ...
A quick check on demographics tells me that your beloved Ohio is due for some riots. Ferguson looks like a fine place to live in comparison.
No arguments with you on inner city Cleveland poverty, education, etc., my point is that issues with a "city" (really suburb) of only 17,000 doesn't mean overall Northeast Ohio is at all analogous to Detroit with respect to finances, as a quick reading of the headline might suggest.
Yeah....but NE Ohio still sucks.
That's the progressive liberal left wing East Side right???
Gotta be, cause they ran out of everybody else's money.
Agreed, Stoploss. When I read, "the community lacks a working ladder truck in its fire department, had its mobile phones shut off and faces $1.7 million in unpaid bills." I immediately wonder if they were still paying full wages, benefits and noncontributory pensions to the fire department and all the other fine city servants. I would like to see what their overhead looked like compared to revenues.
One thing the Left does is pay itself and its minions well with other peoples' money.
Are they privatizing municipal $$$$ just before the BIG reset ?
Happened in Latin America.
I wonder...
Burn, Baby, Burn!
US - on your way to become a failed state.
Good let every progressive pile of crap fail as they should...
Problem is you'll be picking up the tab. And probably will wake up to find that you have some new and vibrant neighbors via Section 8.
E Cleaveland Residents should reach out to the UN for help.USSA USSA USSA , Number 2 working on 3
So who is going to pay for all those bankrupties and emerges.
Well.....
Go look in the mirror, and you will find your answer....
Meridith Whitney was on the money, but like me her timing is shit.
A tidal wave of this coming and munis will flee after getting the shaft from Failifornia.
You are exactly right.
And, after seeing how the Detroit deal worked out, anyone who buys bonds of a city with underfunded pension plans is a complete fool. Even those bonds secured by the Full Faith and Credit taxing power were severely haircut. No government promise has value in bankruptcy.
Your right Obama, Detroit is catching on! Transforming the country.
Is it just me or is the eastern part always seem to be the worst section of a city?
U.S. exceptionalism again.
Just putting this out there, because, y'know....
East Cleveland: As of the census[3] of 2010, the racial makeup of the city was 4.6% White, 93.2% African American, 0.2% Native American, 0.2% Asian, 0.2% from other races, and 1.5% from two or more races.Hispanic or Latino of any race were 1.0% of the population.
I'm sure this information is irrelevant to the conversation. Yup. Sure.
The median income for a household in the city was $20,542, and the median income for a family was $26,053. Males had a median income of $26,123 versus $21,960 for females. The per capita income for the city was $12,602. About 28.0% of families and 32.0% of the population were below the poverty line, including 45.5% of those under age 18 and 22.5% of those age 65 or over.
Does the income include EBT, Medicaid, and Section 8 vouchers?
Of course...... not
Of equal irrelevance, what percentage were registered Democrat and voted Democrat? What percentage of the city's leaders were Democrat and what percentage are now under indictment?
Pretty sure Marion Barry's ghost moved there; too many damned Chinese in D.C.
Hmmm. What was the racial composition of Detroit?
I think it's the cities turn to support the suburbs for the next 30 years or so.
I remember reading the news reports leading up to the Detroit implosion that over half of that population was illiterate.
So, combine a high illiteracy rate with a high felony conviction rate, add in a large number of bastard children, and create a new normal of plundering creditors.
The only way out will be to supply each resident with a live in illegal alien.
Caught me hoping that it was the other The City was collapsing.
Move to Ordos.
They only owe 100 bucks each. Is that too much?
when you take their incomes and subtract the necessities, booze, cigarettes, crack, iphone, gun and ammo, then yes, they can't afford it.
Shovel ready, green shoots, jobs jobs jobs.....
https://www.youtube.com/watch?v=7ZKov2oBTFU
"Bend Over America: You're Getting Driven to Cleveland"
BoP's title to his new book.
"About 43 percent of residents live in poverty, almost triple the state level, while median household income, at about $20,600, is less than half the Ohio average"
Are they still permitted to breed, ie REPLICATE ????
They get paid (by us) to breed and replicate.
Exactly!
AND they get paid (by us) to vote for the politicians who pay them with our confiscated earnings.
Why is ther no armed rebellion ??????????????????????????????????????????????
That starts when the gubment checks don't clear...
This is further proof that anyone holding municiple dept is an idiot. The is is just the beginning, I cant wait till Detroit is broke again in the next three years.
All municiple dept is "A" rated just before a financial disater.
They hired the Fonz to rate the bonds: Aaaaaaay!
The niggers have a Christmas backlog on Obama phones, this must be the Euclid group who turned a mall into a Fallujah, Iraq zone. Good for you. Keep tearing up Cleveland, OH. Once everyone leaves, you can be pedophile buddies with your Detroit sister and fuck up all your brothers & sister to extend the EBT card expansion card line.
We are slowly selling off homes in Medina, OH. Reap what you sow Democrat cunt licks. I will never, ever go down to the flats or W 6th street again. Niggerville and high crime. Wasn’t that way in the early 90’s. Charleston. SC is far safer than the shithole you turned Cleveland into. Pat yourself on the back..
But you don't get it, do you? Once they've wrecked their own municipality they'll start coming for your productive ass down in Chareleston or some other Whitopia. Section 8, extending the metro, integrated "education" via bussing and you've been enriched with diversity. Nowhere is safe.
They can sell the ChiComs residency visas.
Well, maybe wait until the next Cultural Revo to get going. They may need extra enticement.
I smell the carcass of what was once Detroit from where I sit. Another bankruptcy is just what the fattened maggots need to spread further and burrow deeper into the federal tit at the suburbs expense.
I like how people are pretending that Detroit has turned the corner. It's all rainbows, unicorns and skittles from now on!
As long as you get the hell out. Rockefellers got big plans, along with Al Bore..lol
We're putting the Buffalo back after we killed them all to starve the Indians and steal the land so we could put them back after we got filthy rich on the backs of the golden age working man busting his ass for us .....because we care
Yes, as in oops. The same as it ever was. Debt gone, system of BS totally intact.
Fire Truck with no Ladder? LMFAO. Why the fuck would you need a fire truck. Anything that catches ablaze there needs to be allowed to burn to the ground.
You need it to appear that you have a real fire department so all the relatives of the city council can keep collecting their paychecks and pensions.
Better than a fire department with no water.
Diesel is cheap now. They can use that.
Margerat Thather once said that socialisum was great, until they ran out of other peoples money. The remarkable Ruyard Kipling poem fits right in here "Gods of the Coppybook Headings". They have returned.
Socialists or Capitalists dont make a difference, the mofos print money like crazy and screw the middle class.
I wonder if this Governmert is going to tax me a visa to visit my Ft. Myers/Marco Island home? Traveling from Chareston, SC
/ /LOL
Your visa has been revoked; Marco Island is much too nice for proles. In fact you will soon be ordered out of Charleston. We do have an opening in East Cleveland, however.
LMFAO.. good one.
Bail in
"the community lacks a working ladder truck in its fire department, had its mobile phones shut off and faces $1.7 million in unpaid bills."
But, all police, firefighters and city employees got 7% raises for each of the next 5 years!
Well the ladder is exactly like most city employees, they dont work much.
If the city up and went Obama then things should be pretty cheap to buy. Maybe you can pick up a house with student loan money there.
The 10 Yr will kill real estate and bankrupt all kinds of junk bond buyers. If you own an annuity.... good luck to you. As yields rise the affect on all sorts of markets will be catastrophic.
http://www.globaldeflationnews.com/10-yr-u-s-treasury-index-yieldelliott...
Another buying opportunity. Just hung up with Mrs. Atomizer. She has been driving me nuts. I want a new house on Blah, blah. Oh, look at this place, blah, blah. I just tell her to wait.
Two type A personalities don’t always mingle to a crest of an ocean wave. Love her dearly, buying something new has to have ROI, not 20-30% HOA bullshit. The HOA president can come in and deliver the newspaper, and lick my balls every day. 3 out of 9 have HOA. Theses cocksuckers are scumbags. Stay away from gated communities and HOA fees. Food for thought.
Edit: Picking on FT Myers house, why should I pay HOA for a community pool when I can open various sliding glass doors to access my pool enclosed within a lanai? Fucking retards!
I dont do group sex nor do I like to share the pool water with a bunch of mofos
Let me guess; the whole area is run by Libtard Democrats who have been plundering the tax base for decades, and have now run out of other people's money. Let them eat cake.
www.traderzoo.mobi
Bingo
East Cleveland should market itself like Honolulu does - a winter vacation spot for failed community organizers. Who amongst us (to channel John Kerry) would not pine to be on the shores of Lake Erie in the dark of winter before the lake freezes solid?
Let's all hope the football games will still be played.
You mean Cleveland Browns pink flag football?
Man, I’ve got to get into a political office at some level. I'm going to work on that goal. The Kennedy's did it over time.
Hell, I thought we were all going to be working for the government after Pres. Golfstix got in. Maybe in his third term...
Absolutely no bankruptcy. No way to run a city. Instead, they should drag back every politician that served and is not dead and tell them to explain the money they spent, and why it didn't work. Then the people should vote on whether or not they accept that politician's explanation. If not, he should lose his pension. That should give pause to these idiots who promise everything to everybody, knowing that stupid people populate the cities and vote. No way should ANY of that debt leak outside the city to other than the city taxpayers who voted these criminals in. Then maybe they'll start paying attention to who they elect.
Here in The D, the former stewards of the city, pensioners, took a 4.5% haircut.
The mantra was, “retirees didn’t have anything to do with the financial crisis in Detroit”.
Basically, The D has a fresh $7,000,000,000 limit on the Credit Card. We’ll watch and measure the progress against the burn rate.
Rock Star or politician.
"No way should ANY of that debt leak outside the city to other than the city taxpayers who voted these criminals in. "
But it will. It will.
I know, I know...
Sorry but if you were stupid enough to buy an East Cleveland bond you do not deserve to even live. Bankruptcy is the only option and the dumbasses get to eat their losses.
And again, everyone will ignore the elephant in the room. East Cleveland is 95% black and that demographic represents the common denominator for all the bakrupt cities. But we can't say that as that would make us RACISTS and HATERS. So good luck on finding a solution that igniores the cause of the problem.
Undoubtedly Obama will order the Feds to print some more to bail them out but that's just kicking the can down the road.
Catapult Cleveland blacks into Lake Erie?
Contravenes EPA water pollution standards. Otherwise an excellent suggestion.
During my 86 – 93 stint, Cleveland OH downtown was a blast; my early 20’s. Had to pull the plug on clubbing because I had a great job. Fond memories of Halles and Higbees
Mr. Jingeling WOIO-19 Cleveland
This is how Atomizer grew up, along with Captain Kangaroo, and Speed Racer.. LOL
student loans are not discharge-able, child support is not discharge-able. back taxes are not discharge-able.
LET THEM EAT CAKE !
Demographics?
Oh yeah...
http://www.city-data.com/city/East-Cleveland-Ohio.html
And LMFAO @ the income distribution graph.
All you need to know is that if a city is mostly black or hispanic, it's either in bankruptcy or about to be. In 2000 the racial makeup of the city was 93.39% African American, 4.56% White, 0.22% Native American, 0.22% Asian, 0.01% Pacific Islander, 0.17% from other races, and 1.43% from two or more races. Hispanic or Latino of any race were 0.76% of the population.
Can't East Cleveland bid on the Olympic Games? What a boost that would be to host the Olympics!.... Promise moving sidewalks, cars that fly, and free hum jobs for the Olympic Committee - why, it would be a shoe-in....
Well next door Cleveland did host Gay Olympics this summer but the games did not prove to be a fruitful enterprise
Who you calling a "fruit"? :)
Any town, city, state, or country could be drug free, if they really wanted to be.
Just shoot the dealers.
It worked for China, to end their dependence on opium.
In 1975 when one of my insurance agents when to a convention he was treated with awe due to having insured 3 cars that received a Youngstown Tune-up -- bombed. At his 1976 convention he was treated with trepidation with 6 more totaled car claims due to Youngstown Tune-ups to his credit. This war headed by turncoats grossed 37 murders. "Accidential" suicides and accidents were likely greater.
MSM nicknamed Cleveland the Bombing Capital of America in 1976 and Youngstown a few years later, "Murder Town USA".
East Cleveland was a safe haven for after-hour joints and card games in the '60s and later. It also housed one of the best neighborhoods with California ranch homes and two nursing homes in a park that are still excellent. Median value price of residences today is about $54K, median sale list price $24K and median sale price of residences $92K -- indicating those who have stayed are staying.
Two major problems with major US cities and states is
Greater St Louis has 60 cities and Cuyahoga (Crooked) County is down from 59 cities to 52 presently. Each time E Cleveland rejected merging with Cleveland there was white flight and increased FHA and VA loans to working, unemployed and investors using strawmen to buy houses. Hough Riots of 1966 marked the evacuation of major industrial employers and public HS students. Mandatory busing by a Youngstown Italian judge in 1976 pretty much was the last nail in the coffin of Cleveland and adjacent suburbs.
"Bombs Away" aside the LCN's failure to replace cadavers and turncoating left rackets to a mixed bag of numbers, drugs and union racketeers. They polluted law enforcement vertically and horizonally -- not to mention world class renegade state and federal politicians. Banks, fogetaboutit.
Sure Cleveland was wealthier than Linndale on the Westside and E Cleveland when Cleveland was rated the #1 city for poverty in the US prior and after the 2007 Global Credit Freeze. Do NOT believe for a New York minute that there is no underground/black economy alive and well with resourceful and ambitious E Clevelanders and Clevelanders. There are still a few lifers without parole inside who were listed as indigent prior to being bitched by the Strike Force.
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Edit: "Throughout the 1990s, despite bond sales, cutbacks and layoffs, East Cleveland remained in a state of fiscal emergency. Community efforts to address these problems included the East Cleveland Coalition for a Better City and housing renovation by the city and the Lutheran Housing Corp. Nevertheless in 2003 East Cleveland was owed $7.8 million in back property taxes, over half the city's $15 million tax base. In 1990 the population stood at 33,096 but by 2000 was 27,217, down 30 percent from 1970."
http://ech.case.edu/cgi/article.pl?id=EC
When the Cleveland Police Department Major in charge of obedience at the Cleveland Work House had half interest in the biggest hotel in E Cleveland, there was no funny stuff dividing a piece of the pie from drugs, loan sharking, gambling, after hour joints, working women, weapon sales and from preventing arson.
http://tebeau304.clevelandhistory.org/files/2012/04/kerr-fires.pdf
"Who Burned Cleveland, Ohio: Forgotten Fires of the 1970s" Daniel Kerr
First rule of bankruptcy is paying the first 90 days of bills after filing for protection in bankruptcy. This is not pro bono territory since any misstep could trigger a grand jury investigation of anyone who signed/received/mailed a check or licked an envelope with a check inside or touched a keyboard that sent payments on-line.
Usually there are lawyers in prison or on parole who, with a Fed bankruptcy court order to supercede state supreme court orders, would be more than competent to keep the breathtaking legal fees for unintended consequences of the bankruptcy under control. East Cleveland is as typical a small Midwestern city as is Palm Beach, Florida where snowbird landlords winter. Westsiders winter in Naples, Florida.
Law enforcement weapon sales occured in East Cleveland by disarming patrons of birthday party in one bar, taking the weapons to another bar to be sold back to the patrons of the first bar and collect a 50-50 split. When Sylvester in a second bar refused to sell them and just gave the weapons back, he was shot in the temple at close range. Round the clock vigil by country cousins was kept at the hospital until Sylvester could be moved back home to North Carolina.
You name it -- hospitals, courts, companies, schools, etc. -- and a country cousin (mostly female) from East Cleveland was working there 50 years ago and after. There were rules that public private partnerships usually overlooked. Quote of Cedric the Entertainer in "Intolerable Cruelty":
"Gus Petch: You want tact, call a tactician. You want an ass nailed, you come see Gus Petch."
You have a $15m tax baset and want $10M of property taxes collected, don't call a lawyer, you come see a country cousin from East Cleveland.
Correction in article: Misleading to say the Cleveland Clinic Hospital was shut down. Cleveland Clinic may have acquired a small hospital in East Cleveland to consolidate with other Cleveland Clinic hospitals in Cuyahoga County, but the template used for clinical care in PPACA is alive and well in Cleveland nearby.
_____________
Carter/Voker and Reagan/Volker's SME cleansing of 1979 to 1982 turned most brownfield US cities into donut holes driving those without head of household wages to welfare and the underground/parallel economy. USDOJ/Fed/SEC/consumer act enforcement greenlighted systemic illegal bank practices targeting dead people's trusts and defaulting on mid to long term loan agreements by unilaterally without notice or legal opinion to 90 day working capital loans with interest rates greater than cash flows.
This war on small/medium business that created 80+% of new jobs was combined with Eliot Janeway and others' "Modern Monetary Theory" of US exporting the largest commodity in the world -- long term US bonds -- to create an estimated $300 trillion in nominal and real dollars aside from zombie/toxic derivatives that are worthless and, at best, are footnote items on central and private banks' balance sheets globally.
Congress should deal with US monetary policy in an open and plain English manner for voters and consumers to understand. Instead most policies and laws of Congress are counterproductive with unintended consequences that are seldom if ever reviewed by Federal Courts.
This is called "Rule of Law" that is NOT the "Rule of Due Process of Law" that distinguishes the US from the UK in the US Constitution.
Doing business while insolvent is illegal. One way governments continue indefinitely to do business while insolvent is to pyramid assets creating priority secured creditors from subsequent creditors without giving legal notice to existing priority secured creditors or revealing this practice to underwriters, rating agencies and in their financial statements.
One unintended consequence of parri passau (equal footing) fabrications in bankruptcy is to attract capital flight from blocked currency Leninist crony kleptrocratic dictatorships. This is what the lawyer recommended but not what the doctor recommended or should be what the minister leading income inequalty protest marches should recommend.
Wiki: "The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well."