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

Tyler Durden's picture

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WineSorbet's picture

Seems like the PPT was back in effect today.  I thought that ended?

Sudden Debt's picture

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


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
  • 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???

    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

    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.

    Dick Darlington's picture

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

    A Nanny Moose's picture

    Expropriation at gunpoint is the best racket going.

    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!

    SMG's picture

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

    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?

    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. 


    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.

    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....


    zorba THE GREEK's picture

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

    Freewheelin Franklin's picture

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

    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.

    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

    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!

    drswhaley's picture

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

    dick cheneys ghost's picture

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

    zorba THE GREEK's picture

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

    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!

    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.

    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!


    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.

    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.

    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

    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.

    syvanen's picture

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

    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.

    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?


    max2205's picture

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

    How long will this go on?

    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.

    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

    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.

    vato poco's picture

    "That's the Chicago way!!"