And Back To Munis, As Fitch Downgrades New Jersey GO From AA To AA-

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Wed, 08/17/2011 - 16:08 | 1570209 WineSorbet
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Seems like the PPT was back in effect today.  I thought that ended?

Wed, 08/17/2011 - 16:18 | 1570261 Sudden Debt
Sudden Debt's picture

Beter enjoy an take a picture of it because you're grandchildren will still be paying for it...


Wed, 08/17/2011 - 16:08 | 1570210 Dr. Engali
Dr. Engali's picture

Merideth who?

Wed, 08/17/2011 - 16:31 | 1570304 JW n FL
JW n FL's picture

She is a lessor God.. you should be so lucky as to know her.


Meredith Whitney - Wikipedia, the free encyclopedia - CachedSimilar

Meredith Ann Whitney (born November 20, 1969) is a banking analyst and frequent contributor to CNBC, Fox Business, and Bloomberg News programs. ...

Education and career - Rise to fame - Recognition - Personal life


  • Meredith Whitney
  • Wed, 08/17/2011 - 16:24 | 1570215 hambone
    hambone's picture

    I haven't seen a day where the 10yr T has gone down and remained down like almost always recovers after the Equity sell off abates!?!  Not today...just sitting there at 2.16%...very bad omen???  Yields still falling in AH's...I feel like I'm turning Japanese???  Last time T rates were this low, S&P was sitting about 700.

    With T yields like this (now 2.158%) and 30yr mortgages heading for 4% interest could BB justify the need for balance sheet expansion for more QE???  Or will BB move to the MUB world and start the propping there???

    Wed, 08/17/2011 - 16:11 | 1570227 hugovanderbubble
    hugovanderbubble's picture


    Wed, 08/17/2011 - 16:24 | 1570289 I am a Man I am...
    I am a Man I am Forty's picture

    this is a terrible trade, everyone know NJ, CA, and IL have issues, this is old news, if you would have shorted mub when everyone was muni fear mongering you would have gotten your ass kicked

    Wed, 08/17/2011 - 16:33 | 1570318 hugovanderbubble
    hugovanderbubble's picture

    Haircuts has to be applied to Munibonds so ALL munibonds gonna worth less yes or yes sir.


    Its not just a problem of SOVEREIGN BONDS across countries, ------the next crisis = SUBGOVERNMENT FIX INCOME

    For example in SPAIN all the subgovernment bonds.---- SPANISH COMUNIDADES AUTONOMAS ARE IN DEFAULT----

    Specially Catalonia, Valenciana,Andalucia ---- Impossible to repay their debt till XXX Century.

    Wed, 08/17/2011 - 16:12 | 1570230 Dick Darlington
    Dick Darlington's picture

    AA-, really? Same old shit from same old raters.

    Wed, 08/17/2011 - 16:28 | 1570316 A Nanny Moose
    A Nanny Moose's picture

    Expropriation at gunpoint is the best racket going.

    Wed, 08/17/2011 - 16:29 | 1570322 JW n FL
    JW n FL's picture

    it really is more like a AA-(+++) if you know what I mean? wink wink, nudge nudge and dont forget the bird dog fees! never mind the New York DA and his bullshit about kick backs.. he's just a cock blocker.. Oops! never mind he is gone now and the other guy is sooooooooooooooooo a team player! YAYYYYYYY!

    Wed, 08/17/2011 - 16:13 | 1570233 SMG
    SMG's picture

    There is a lot of disruptive news today.  Seems like somethings about to really let loose.

    Wed, 08/17/2011 - 16:14 | 1570239 Popo
    Popo's picture

    IF NJ was a company, it's debt would be C.   The special consideration for government entities is absurd.   There is simply no possible way New Jersey can meet its pension obligations.   Why is the benefit of the doubt being given to them?

    Wed, 08/17/2011 - 16:25 | 1570300 jm
    jm's picture

    You are missing the point.  Pensions and services can and will be cut, dissolved, whatever.  Just operating expenses to reduce in line with revenue. 

    Creditors always take precedence, and ultimately this precedence isn't of a legal nature.  If any party screws a creditor, they won't get credit again without losing some blood. 


    Wed, 08/17/2011 - 16:33 | 1570350 ZackAttack
    ZackAttack's picture

    One big difference is - and I don't know about NJ or these bonds specifically - state constitutions often require that the bonds be paid by tax increases if necessary.

    Wed, 08/17/2011 - 16:17 | 1570252 Sudden Debt
    Sudden Debt's picture

    So New Jersey is totally broke....

    99% of the population are South American unemployed "citizens" who all lost their greencard because the dog ate it....


    Wed, 08/17/2011 - 16:27 | 1570307 hugovanderbubble
    hugovanderbubble's picture

    Fitch downgrades 21 bonds in 12 US CMBS transactions

    Fitch the same that says US is AAA=? lol

    Wed, 08/17/2011 - 16:19 | 1570267 zorba THE GREEK
    zorba THE GREEK's picture

    Considering the downgrade, I may delay my plans to build luxury condos in Camden. 

    Wed, 08/17/2011 - 16:56 | 1570467 Freewheelin Franklin
    Freewheelin Franklin's picture

    Yes, but you might want to consider invewsting in the Revel Casino.

    Wed, 08/17/2011 - 17:06 | 1570522 Freewheelin Franklin
    Freewheelin Franklin's picture

    There's also some land at the site of the former Pennsauken Mart that George Norcross III (King George III) is looking to unload that would be perfect for some condos. State Senate President Steve Sweeney will be happy to send his Iron Workers over there to "negotiate" a contract.

    Wed, 08/17/2011 - 16:23 | 1570288 Seasmoke
    Seasmoke's picture

    fuck you NJSP ! retire at 45 and take another public job for 20 more years while thinking the NJ taxpayer is going to keep paying your pension while paying lifetime benefits for you family (and girlfriends family).......PIGS has taken on a whole new meaning

    Wed, 08/17/2011 - 16:24 | 1570293 gunsmoke011
    gunsmoke011's picture

    WOW -- New jersey must really be sucking to be downgraded by fitch after they just yesterday re affirmed the U.S. AAA rating saying ALL WAS WELL!

    Wed, 08/17/2011 - 16:24 | 1570295 drswhaley
    drswhaley's picture

    Chris Christie for Prez in 2012!!!!!!!!!!!!!!!!!!!!!

    Wed, 08/17/2011 - 16:31 | 1570338 dick cheneys ghost
    dick cheneys ghost's picture

    Has he been to the Bilderberg Meetings yet?.............

    Wed, 08/17/2011 - 16:25 | 1570299 JW n FL
    JW n FL's picture

    Meredith Whitney is not sooo hawt but I would take one for the team.. she is kool enough that we all owe her one on the house.


    Wed, 08/17/2011 - 16:39 | 1570387 zorba THE GREEK
    zorba THE GREEK's picture

    @JW  Zorba would not kick Meredith from bed either, but Zorba's wife would.

    Wed, 08/17/2011 - 17:13 | 1570547 JW n FL
    JW n FL's picture

    half is a LOT! 50% is a LOT!! and then the 50% of income you have left.. half of that too! so it is really more like 75%.. unless you can get an irrevocable trust back dated, dont try it! then she gets is all and you go to jail too!

    Wed, 08/17/2011 - 16:30 | 1570329 Cdad
    Cdad's picture


    Where the heck is ANY coverage of S&P's downgrade on the US economy [you know, beyond ZH]?  Seriously, are we saving that as some sort of "surprise" for the algo's tomorrow?  Are the fellow who backed the downgrade now being carted to prison by the jack booted thugs of President Zero?

    This is most peculiar.

    Wed, 08/17/2011 - 16:32 | 1570344 JW n FL
    JW n FL's picture

    Ulta Top Secret(s) of the Untied States!

    U.S. Down Grade is #1..

    followed closely by??? Ron Paul's Polling Numbers!


    Wed, 08/17/2011 - 16:42 | 1570403 lizzy36
    lizzy36's picture

    Well they should be contributing about $3.5b a year to pension fund. Christie is doing about 22% of that at $750m.

    This is all going to end so well.

    Wed, 08/17/2011 - 17:11 | 1570535 docj
    docj's picture

    Who was the last governor to contribute anything close to 100%? Serious, just asking, I honestly don't know.

    My guess though is you probably have to go back to Kean, if not further back than that.

    Wed, 08/17/2011 - 16:43 | 1570411 Surly Bear
    Surly Bear's picture

    I am not sure I agree with Fitch's assessment because in pension accounting a company would setup a liability account for the shortfall, and an offsetting intangible asset which reflects the 'goodwill' of the employees which, in theory, reflects the 'value' of their work. With all that goodwill floating to the surface shouldn't they have received an upgrade?

    For those unfamiliar with pension accounting, yes, I am being sarcastic.

    ~S. Bear

    Wed, 08/17/2011 - 17:02 | 1570492 Freewheelin Franklin
    Freewheelin Franklin's picture

    Christie caved to the unions. All NJ governors do. They have to. Otherwise, they go all Anthony Provenzano on your ass.

    Wed, 08/17/2011 - 17:03 | 1570499 syvanen
    syvanen's picture

    What does state GO bonds have to do with munis?  I thought muni bonds were county, district and city.

    Wed, 08/17/2011 - 22:44 | 1571344 Bodvar Bjarki
    Bodvar Bjarki's picture

    Munis are state go, city, county, school districts, universities, airports, not for profit hospitals, water and sewer, electric utilities, single family housing, multi family housing, charter schools, nursing homes and the kitchen sink.

    Wed, 08/17/2011 - 17:12 | 1570540 docj
    docj's picture

    mounting budgetary pressure presented by significant and growing funding needs for the state's unfunded pension and employee benefit liabilities, particularly in the context of a weak economic recovery, a high debt burden, limited financial flexibility, and persistent structural imbalance.

    Uh, save for a word or two this could be applied directly to the USA as well - yet didn't Fitch just re-affirm us as AAA, all the way?


    Wed, 08/17/2011 - 17:52 | 1570668 max2205
    max2205's picture

    Fitch (white house) slammed s&p (tea party). But now wacks NJ (rep)

    How long will this go on?

    Wed, 08/17/2011 - 19:02 | 1570856 digalert
    digalert's picture

    Hey Fitch, when you get done shuffling through munis and used, discarded SEC porn portfolios, could ya take a look at the USSA credit standing. I hear it stinks.

    Wed, 08/17/2011 - 19:46 | 1570935 Atomizer
    Atomizer's picture

    NJ peasants still have change in their pockets. Progressives must go door to door to present a donation campaign to save the state against bankruptcy. I can envision the new marketing slogan..

    Kollective Government is your only HOPE

    Thu, 08/18/2011 - 00:20 | 1571562 Bastiat
    Bastiat's picture
    US Inquiry Eyes S&P Ratings of Mortgages
    Published: Wednesday, 17 Aug 2011 | 11:11 PM ET Text Size

    The Justice Department is investigating whether the nation’s largest credit ratings agency, Standard & Poor’s, improperly rated dozens of mortgage securities in the years leading up to the financial crisis, according to two people interviewed by the government and another briefed on such interviews.

    Thu, 08/18/2011 - 03:01 | 1571726 vato poco
    vato poco's picture

    "That's the Chicago way!!"

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