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Because Once You Drop By Bankruptcy Court, You Don't Stop: San Bernardino On Chapter 9 Deck

Tyler Durden's picture


Meredith Whitney made her doomsday prediction. The nothing. Nothing. Then lots of glib muni expert pundits gloating because the Fed, the ECB, the BOJ, the BOE, the SNB, and of course, the central bank of Kenya, had managed to delay the inevitable by a year. Then some more nothing. Then suddenly Stockton, Mammoth Lakes, and now San Bernardino all file in the span of 2 weeks.


There is a reason marginal events are oh so very important: because as Greece showed, and now one after another broke California municipalities are dropping like flies, one the precedent is there, the easiest thing to do is to just hit Print on that Chapter X petition. After all everyone else is doing it, and remember: he who files first, files best.


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Tue, 07/10/2012 - 22:17 | 2604493 surf0766
surf0766's picture

The new high speed rail will make everything better in Kalifornia ..

Tue, 07/10/2012 - 22:27 | 2604512 TruthInSunshine
TruthInSunshine's picture

If all of the local, county and state units of government that are in deep fiscal shit, aka FUBAR, akaTARFU, aka SNAFU, aka BOHICA (meaning at least a significant plurality of such units of government) follow Scranton, PA's lead, and impose minimum wages on all employees, would such a measure resolve or merely delay the day of reckoning*.


*Sponsored by arithmetic; "You can run from it, but it will ultimately find its mark, bitchez."

Tue, 07/10/2012 - 22:27 | 2604526 SHEEPFUKKER

Too bad the local beaurocrats didn't legalize meth with all the lab technicians in the area. Might have been a major boom to the economy. 

Tue, 07/10/2012 - 22:35 | 2604553 Joe Sixpack
Joe Sixpack's picture

Anyone know if cities on county borders can petition to  change counties?

Tue, 07/10/2012 - 23:03 | 2604649 SmittyinLA
SmittyinLA's picture

No dude, its the hotel Kalifornia, you can check in but never leave.

Tue, 07/10/2012 - 23:07 | 2604657 mophead
mophead's picture

They need a high speed rail from San Bernardino to Rubidoux. Then from Rubidoux to Yucca Valley. That will boost the economy!

Tue, 07/10/2012 - 23:11 | 2604674 Jena
Jena's picture

Logic says extend it to 29 Palms and the base.  That way maybe the military will be interested in paying for part of it.  So crazy it could actually work...

Tue, 07/10/2012 - 23:19 | 2604693 veyron
veyron's picture

Once you pop the fun dont stop ...

Wed, 07/11/2012 - 00:40 | 2604931 Troll Magnet
Troll Magnet's picture

they should fire ALL public employees and replace them with illegal immigrants. they work (much) harder for (much) less.

Wed, 07/11/2012 - 00:48 | 2604949 fourchan
fourchan's picture

like the feds devaluations, the first to go bk will get reap the best rewards, later in this bk game there will be no rewards. the end is neer.

Wed, 07/11/2012 - 01:07 | 2604970 eatthebanksters
eatthebanksters's picture

What do Stockton, MammothLakes and San Bernadino all have in common?

Wed, 07/11/2012 - 01:26 | 2605005 DeadFred
DeadFred's picture

Stockton- Meth, crime, collapsed real estate market.

Mammoth Lakes- Earthquakes, snow bunnies, collapsed real estate market

San Bernadino, Meth, corruption, crime, earthquakes and collapsed real estate market.

I'm guessing it's about real estate.

Wed, 07/11/2012 - 01:47 | 2605031 The Big Ching-aso
The Big Ching-aso's picture



It's time California merged with its richer neighbor Mexico so it can avoid bankruptcy.

Wed, 07/11/2012 - 02:10 | 2605060 TruthInSunshine
TruthInSunshine's picture

 Krugman endless bowl of stupid for the win (all the Krugmanites will chime in here to claim he was taken out of context; if only it were so, Krugmanites, if only it were so...):


Krugman&Summers-in-Wonderland: Fight the collapse of the bubbles by creating bigger bubbles

"In 2002, Paul Krugman made his infamous statement":

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

"Krugman, of course, later defended his comments to claim that he did not think such a thing to be desired, but nonetheless the underlying Keynesian principle was there: in order to fight a slump in "aggregate demand," the government must think and act boldly, or, to be more accurate, recklessly."

"Indeed, Krugman's fellow Keynesian, Lawrence Summers, has taken this Keynesian principle in the same direction, recently declaring":

The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending. (Emphasis mine)

"While Summers is recommending yet another attempt to reflate the housing bubble (in the name of "fixing" the housing market), the larger principle is the same: inflate SOMETHING. However, as I see it, Keynesians such as Krugman and Summers have overlooked the obvious, and that is the sad fact that governments around the world -- and especially the U.S. Government -- have created the Mother of All Bubbles with government paper."


Wed, 07/11/2012 - 10:10 | 2605785 MachoMan
MachoMan's picture

They've overlooked rudimentary math and common sense.  At some point, the interest on marginal debt is greater than the net tax collectable on the economic activity stimulated thereby.  In other words, there are diminishing returns on debt fueled stimulus.

The problem all of these guys have is that because of their position/thesis, they never KNOW when they will be correct (when stimulus will actually help, e.g. previous recessions) and when it won't (now).  As a result, they're forced to keep their foot on the gas...  thelma and louise style.  In the end, they're simply making an argument from induction, viewing a very narrow set of data.  Yeah, they're right most all the time for run of the mill recessions and downturns...  their solutions actually turn things around (we'll disregard whether this is at the expense of future pain).  But, they can't articulate the alternative circumstances that would cause them to be wrong, e.g. our present situation.  Their view is simply too history centric with a bias towards the modern era. 

They've developed a dogma and, unfortunately, are painted into a corner...  had they undergone a paradigm shift, or at least a retreat and retrenchment following 2008, then they'd still have some goodwill to utilize.  At this point, they're patently retarded (and blazingly ignorant).

Tue, 07/10/2012 - 23:56 | 2604810 knukles
knukles's picture

Holy Shit!
What an Idea!
And bill it as someday connecting to all the DUMBS (Deep Underground Military Bases) scattered throughout the entire US with their mach4 maglev monorails connecting them so that everybody has a free government paid ultra fast transit mechanism about the whole country thereby obviating any further need for computers, tablets and phones since now everybody can talk to everybody face to face and thereby save the planet earth from the evils of the no longer "Green" iWahtchamacallit manufacturing industry and freeing the Chi-nee child slaves laboring under torturous conditions at Foxwoods Casino.

Wed, 07/11/2012 - 00:11 | 2604847 A Nanny Moose
A Nanny Moose's picture

Too much revenue generation from drunk sailors driving back to the base after a night on the town in bustling Yucca Valley.

Wed, 07/11/2012 - 02:47 | 2605096 TruthInSunshine
TruthInSunshine's picture

One has to hand it to The New York Times, one of the establishment proxy standard bearers of propaganda.

You see, if you view the world through the lens that The Times hopes you will, it's all good in the 'hood:


States Face Tough Choices Even as Downturn Ends
Tue, 07/10/2012 - 23:08 | 2604662 aphlaque_duck
aphlaque_duck's picture

I left.

Wed, 07/11/2012 - 00:09 | 2604851 dolce vita
dolce vita's picture

egress being planned...actually moved up in docket.

Wed, 07/11/2012 - 00:53 | 2604956 dolce vita
dolce vita's picture

im being watched............................

Wed, 07/11/2012 - 02:21 | 2605072 vato poco
vato poco's picture

Henley had an even better, if lesser-known, Kailfornia epitaph on that album. "Call a place a paradise, kiss it goodbye."

Tue, 07/10/2012 - 23:40 | 2604667 AlaricBalth
AlaricBalth's picture

Why bother? IMHO the entire state of California is headed for bankruptcy. Was just reading a very recent bond indenture for San Bernadino County (AAA Moody's and AA+ S&P). Cumulatively in CA, the Public Employees Retirement System (PERS) and the State Teachers Retirement System (STRS) have unfunded liabilities in excess of -$75 billion dollars.

What a mess!!!

Here is the indenture posted by the printing company.

Tue, 07/10/2012 - 22:37 | 2604561 OldPhart
OldPhart's picture

The big dollar meth labs are out of the city and all over the county (which is rather large in area.)

Wed, 07/11/2012 - 00:16 | 2604829 knukles
knukles's picture

Berdoo is out on the edge of the Central Valley, the last of civilisation if it can be so called, right next to the edge not to far from the middle of fuck all no where comprised of one massive extended strip mall and trailer park populated by Oakies, Mexicans, Hells Angles, stretching into agricultural and animal processing facilities with an overabundance of meth labs.


You miss me yet said the QE now, huh?

Oh and don;t forget.
Everybody, including most everybody in California thinks it's fucked up, but as goes California, so goes the Rest of America.
You're next, bitchez

(But a Symptom of the whole rotten system disease... it'll spread more quickly than that duck penis rot crap that they tried to immunize us for a few years ago which was another NWO meme.... this is real.)

Wed, 07/11/2012 - 00:23 | 2604886 A Nanny Moose
A Nanny Moose's picture

Berdoo is out in the Central Valley

Inland Methpire. Near Fontucky. IE is not Central Valley. You must be thinking Weedpatch, Oildale, Bakersfield, Fresno, Stockton, Sac, and Molesto.

Spent time in San Berdoo. This is an area of the world wherre the police 'copter is up at 5AM asking Jerome Jordan to "come out with his hands up", and the closest regional park is an old rock quarry littered with dead washers, dryers, fridges, and couches. It almost rivals Newark, NJ.

Tue, 07/10/2012 - 22:54 | 2604623 maximin thrax
maximin thrax's picture

How about imposing a hefty state income tax, say 50%+, on all public employees on every dollar earned above the median income of the people they serve? Sort of a "wealth tax" on the relatively rich (the only kind of rich there are).

Tue, 07/10/2012 - 23:20 | 2604702 Freddie
Freddie's picture

Manson was the end for California.  It was all downhill after that.   The majority of the populace have this glazed over mentaility like Scientologists.   Stoned on Hopium.

Wed, 07/11/2012 - 08:08 | 2605346 ZeroAvatar
ZeroAvatar's picture

Definitely in a state of hypnosis.  Just like all those mooks you see standing behing Ohbummer when he gives his speeches.  You just want to snap your fingers and say, "WAKE UP!"

Tue, 07/10/2012 - 23:22 | 2604706 upWising
upWising's picture

How about imposing a hefty state income tax, say +80%, on all bank and corporate executives (assistant deputy vice president and up) on every dollar earned above the median income of the people they "serve" (or should I say enslave?)    Sort of a "wealth tax" on the ravenous vain self-absorbed vampire squid rich (the only kind of rich there are). 

The ravenos vampire squid rich will drive their Beemers to work on roads maintained by public employees, use and abuse low-paid labour who ride to work on buses driven by public employees and who will water the vampire lawns and wash the vampire clothes and cars with water systems maintained by public employees.  The vampire rich will park their planes ($3/night !!!) and take off and land from public airports run by public employees, etc.  etc.  While they sip extravagently expensive champagne, they will bitch about getting "government off their back." 

I think that's what you meant to say.  A pleasure to make those simple corrections for you.

Tue, 07/10/2012 - 23:58 | 2604813 JLee2027
JLee2027's picture

Brilliant. No one has ever, I mean ever, thought about taxing the sheet out of anything and everything that moves. Ever, I swear. Sheer genuis. It doesn't matter to you, that any bank taxed this way would close it's local business immediately right?  

Wed, 07/11/2012 - 00:05 | 2604837 knukles
knukles's picture

Please don't let them hear about that idea in the People's Socialist Paradise Republic of Californiastan.
By Jove, they'd do it!

Wed, 07/11/2012 - 00:25 | 2604892 A Nanny Moose
A Nanny Moose's picture

In CA those are the fucking state, county, and city employees. They drive the beemers, and fly the airplanes. I know several, and I shit-you-fucking-not.


Wed, 07/11/2012 - 09:07 | 2605537 marathonman
marathonman's picture

You know if CA would set up a state owned bank they could cut out the vampire squid middle man and be the vampire squid.  Pretty funny really.  Instead of taxing their (bank and corporate executives) income, how about dry up their well spring and own it?  CA could devalue the currency all on their own and use the proceeds to pay off the union pensions.

Wed, 07/11/2012 - 07:00 | 2605247 azzhatter
azzhatter's picture

and a minimum 50% haircut on pensions

Wed, 07/11/2012 - 07:03 | 2605251 skipjack
skipjack's picture

No, because that doesn't fix the retiree outlandish pension benefits problems.  Only a BK can grind that nut.

Wed, 07/11/2012 - 09:03 | 2605518 Cole Younger
Cole Younger's picture

SB is a sancturary city for illegal aliens...They spend allot of money on services...oh well, I guess that will end...

Tue, 07/10/2012 - 23:35 | 2604749 Dingleberry
Dingleberry's picture

And that's just cities going broke. Wait until that stupid liberal state  that keeps re-electing Fiend-stein and Babs Boxer and Pelosi goes broke. That's what I want to see. The entire state going belly up just might make them change their mind on a lot of silly socialist shit.  Unless you have lived there, you wouldn't believe it.

Tue, 07/10/2012 - 23:59 | 2604816 JLee2027
JLee2027's picture

Won't change squat. It will all be blamed on the evil Republicans....forever.

Wed, 07/11/2012 - 03:22 | 2605121 jeff montanye
jeff montanye's picture

not sure about boxer or pelosi but dianne feinstein is no "liberal" if that word even has meaning.  she is a war mongering, military industrial complex whoring, israel firster fascist:

Wed, 07/11/2012 - 09:11 | 2605552 marathonman
marathonman's picture

All three of those hags are fascists.  They just create a more politically stable brand of fascism by giving away freebies to the rubes at the bottom and loot the middle and upper to pay for it.  Guns or butter?  Choose both.  That's the game.  They know how to play to win. 

Wed, 07/11/2012 - 10:20 | 2605836 MachoMan
MachoMan's picture

Actually, it is liberal ideology that would allow the exansion of the state sufficient enough to war monger and whore to the military industrial complex.  You have to quit using compromised MSM terms...  ALL of your prospective political representatives are....  liberals.  Republicans, Democrats...  all liberals.  When you see a politician take a pay cut and give himself less power, you'll have found a conservative.

Wed, 07/11/2012 - 00:23 | 2604889 Arnold Ziffel
Arnold Ziffel's picture

The new high speed rail will easier for bankruptcy lawyers to get around.

Tue, 07/10/2012 - 22:24 | 2604500 Cognitive Dissonance
Cognitive Dissonance's picture

Game theory suggests that we get the hell out of Dodge (NOW while the gettin's good) before Dodge files for bankruptcy and triples the taxes on our ranch and equipment.

I hear Zimbabwe is nice this time of year.

Tue, 07/10/2012 - 22:29 | 2604532 Tijuana Donkey Show
Tijuana Donkey Show's picture

Why not Kenya? I hear Obama has dual citizenship just in case.

Tue, 07/10/2012 - 22:40 | 2604565 Unprepared
Unprepared's picture

Are you inferring that the country will never get bombed... err... liberated?

Wed, 07/11/2012 - 00:04 | 2604834 Real Estate Geek
Real Estate Geek's picture

Dual citizenship, eh?  So that'd be Keyna . . . and . . .

OK, I give up. 

Wed, 07/11/2012 - 00:06 | 2604839 knukles
knukles's picture


Wed, 07/11/2012 - 00:40 | 2604929 Overfed
Overfed's picture


Wed, 07/11/2012 - 06:13 | 2605205 Doubleguns
Doubleguns's picture

Yep and the dog tastes better there than Kenyas. I beleive they are raising a dinner meal at the white house now named BO. I am not making this up. Bo is the name of the dog. Talk about vainity.

Tue, 07/10/2012 - 23:38 | 2604756 Catflappo
Catflappo's picture

What about Ug- itsnotSpain- anda?

Wed, 07/11/2012 - 10:23 | 2605850 MachoMan
MachoMan's picture

CD, if Dodge files for bankruptcy, then why would taxes need to be increased?  Wouldn't the filing, in and of itself, require admission that its tax base cannot support its spending?  If it could tax its base sufficient enough to materially pay for anything, then why file?

I don't see taxes increasing if the debts can be discharged...  for tax mules, municipal bankruptcy is generally going to be a good thing.

Tue, 07/10/2012 - 22:19 | 2604502 Seasmoke
Seasmoke's picture

it only takes the first to fall and then they all line up to be 2nd.........

Tue, 07/10/2012 - 23:41 | 2604776 Catflappo
Catflappo's picture

It's like being at a really useless party but everyone waits (im)patiently for someone else to leave before heading for the door themselves.

An hour later the party has gone from useless to totally dead.

Wed, 07/11/2012 - 07:02 | 2605248 azzhatter
azzhatter's picture

it's called removing the stigma

Tue, 07/10/2012 - 22:20 | 2604508 Mae Kadoodie
Mae Kadoodie's picture

Aint no party like a Scranton party..

Tue, 07/10/2012 - 22:20 | 2604509 Bill D. Cat
Bill D. Cat's picture

If the central bank of Kenya can't keep things going , we're truly fucked .

Tue, 07/10/2012 - 22:35 | 2604552 JohnG
JohnG's picture

California is not Uganda.

Tue, 07/10/2012 - 23:37 | 2604754 Dingleberry
Dingleberry's picture

ever been to south LA?

Tue, 07/10/2012 - 23:58 | 2604814 Bunga Bunga
Bunga Bunga's picture

We don't have to worry about those Ugandan towns.

Tue, 07/10/2012 - 22:22 | 2604511 bob_dabolina
bob_dabolina's picture

Maybe they should build a high speed rail between San Bernardino and Corona.

That should fix everything.

Tue, 07/10/2012 - 22:26 | 2604523 GIANTKILR
GIANTKILR's picture

Unfortunately, they built a high speed rail straight to hell!!!!

Tue, 07/10/2012 - 22:45 | 2604585 geoffb
geoffb's picture

How about from San Bernadino to Uganda?

Tue, 07/10/2012 - 22:48 | 2604595 bob_dabolina
bob_dabolina's picture

White House to Kenya

Tue, 07/10/2012 - 22:48 | 2604598 GIANTKILR
GIANTKILR's picture

Isn't that hell?

Wed, 07/11/2012 - 04:08 | 2605142 Gavrikon
Gavrikon's picture

I thought that was what he said.

Tue, 07/10/2012 - 22:22 | 2604513 HungrySeagull
HungrySeagull's picture

Failed cities are going to be very expensive to live in as soon as every person with a address inside Limits will be billed more each month and taxed again at the end of year.

I have said this before and I will say it again, get out of the cities. They are too broke to show care for you.

Wed, 07/11/2012 - 10:25 | 2605865 MachoMan
MachoMan's picture

I'm at a loss for the mechanism that would allow a failed city to charge more tax...  The reason why you have to charge more tax is to pay for debts/spending...  if you discharge your debts and you can no longer spend outside of your means, then what is the mechanism to increase taxes?  What is the need?

Tue, 07/10/2012 - 22:24 | 2604518 genr8n
genr8n's picture

San Bernardino County and neighboring Riverside County forms a metropolitan area that had the third-highest foreclosure rate in the U.S. in May, according to RealtyTrac Inc. The area’s unemployment rate was 11.8 percent that month, compared with 8.2 percent nationwide.

The list of other counties considering Bankruptcy isnt that hard to predict (if you look at the unfunded pensions it must be close to 80%).

Tue, 07/10/2012 - 22:28 | 2604527 bob_dabolina
bob_dabolina's picture

Riverside Country and San Bernardino County are SHIT holes.

I'm surprised it's taken this long for them to file.

Tue, 07/10/2012 - 22:41 | 2604572 i_call_you_my_base
i_call_you_my_base's picture

Thinking about San Bernardino, the exact phrase "shit hole" came to my mind too.

Wed, 07/11/2012 - 00:19 | 2604873 walcott
walcott's picture

Absolute psychopathic inbred nazi scumbag copland shithole. Pray for fire.

Pretty much what San Bernardino is without the greenery.


Wed, 07/11/2012 - 00:31 | 2604908 A Nanny Moose
A Nanny Moose's picture

Pray for fire.

We had a window of oppty yesterday afternoon. The stewpid firefighters put it out. Shit needs to burn.

Tue, 07/10/2012 - 23:11 | 2604675 SmittyinLA
SmittyinLA's picture

Don't forget Los Angeles County, the highest valued County in the nation, the current LA County Assessor John Noguez is on "paid leave of absence" awaiting eminent indictment, slam dunk prosecution and long-term imprisonment. Noguez was being "groomed" to be the next mayor of LA or governor of CA.

Wed, 07/11/2012 - 00:50 | 2604952 SoCalBusted
SoCalBusted's picture

Here in my slice of heaven in LA County, there have been about 5 homes in a few block radius that have gone up for sale and sold in just a month or two.  There are plenty of fools out there that think "It's never been a better time to buy a house".

Wed, 07/11/2012 - 00:29 | 2604901 A Nanny Moose
A Nanny Moose's picture

I wouldn't live in either county if  home prices were as cheap as Detroit. Well...maybe Big Bear..or Idylwild.

Wed, 07/11/2012 - 00:29 | 2604905 Antifaschistische
Antifaschistische's picture

bingo...bankruptcy is about protecting the parasites, not killing them.  It's so unfortunate that Policemen and Fire Fighters (lead by their Unionist) have become some of the biggest parasitic organizations around.   They hide behind "nothing's more important than public safety" and use that as an excuse to say "you can't pay us enough so keep shelling out" more and more special pay opportunities so they can earn 6 digit incomes, for spending most of their day in a cozy air conditioned car.  And I support policemen...I'm pro-police, but this is just the truth.

Wed, 07/11/2012 - 10:28 | 2605877 MachoMan
MachoMan's picture

So when that pension goes poof, that paycheck goes poof, and the parasite loses his job, how does this benefit the parasite?

Tue, 07/10/2012 - 22:25 | 2604522 bonddude
bonddude's picture

As I used to opine here a couple years ago quite a bit that California Munis are f@cked. Unless you have a bond backed by a reliable revenue stream or built out valuable real estate worth many times the debt w/low tax delinquencies the bonds could default. But even if they dont the values crash. If you are in a dumdum bond fund you could get hosed. MW may be really right yet.

Tue, 07/10/2012 - 23:49 | 2604794 CrazyCooter
CrazyCooter's picture

Saw something on hydro power investment in AK a while back. This talked about some projects, but the source I can't find discussed bonds/investment to make projects happen.

But yes, how many cities/counties out there actually produce shit people want? I shudder when I think of insurance, finance, etc industries simplifing per the Tainter complexity/collapse theory because, frankly, there are far to many eaters and just not enough producers. There are MANY industries that would suffer massive losses by doing something along the lines of "IRS goes to flat tax". All the non-producing wheel spinning goes *poof* ... along with the jobs. Our whole society is grossly overcomplicated at little benefit. See Obamacare.



Tue, 07/10/2012 - 22:29 | 2604531 holdbuysell
holdbuysell's picture

Let's not forget Vallejo. They front ran everyone in a couple years. Michael Lewis in Vanity fair has an excellent article on it and CA in general. Long, but worth the read:

California and Bust


Wed, 07/11/2012 - 00:08 | 2604843 VallejoVillain
VallejoVillain's picture

Hey...easy now, Vallejo is filing for a name change - THUNDERDOME! This place is a home nightmare. Only thing keeping me here is immediate family.

Wed, 07/11/2012 - 00:40 | 2604930 RmcAZ
RmcAZ's picture

Wow, great read, thanks for the link.

Tue, 07/10/2012 - 22:30 | 2604537 DanP1966
DanP1966's picture

Wonder how many will go?

Thought I read somewhere yesterday that somewhere on the order of 10% of all the cities and counties in CA were at risk.

Of course we will then have parts of AZ and FL following right behind.

Think this will meet the threshhold MW set at about 100 large defaults?

Gotta think of all those authorities and agencies too of course.

Nope.....betting we hit well over 100.

Tue, 07/10/2012 - 22:31 | 2604538 kevinearick
kevinearick's picture

Have you taken a look at....LA lately?

Tue, 07/10/2012 - 22:34 | 2604547 bob_dabolina
bob_dabolina's picture

I'd rather sharpen a pencil and shove it in my eye.

Tue, 07/10/2012 - 22:31 | 2604541 Casual_Observer
Casual_Observer's picture

I think I have the solution for Scranton, San Bernadino and Harrisburg.

What's it called? A Bridge Loan?

Yea, I think that's it: Church of Scientology, Creditor and Scranton, San Bernadino & Harrisburg, Debtors.

One Billion Year Term.

Or maybe they can just lease city revene to the Arabs ala Richard M.. Daley's 75 year Chicago Parking Meter Lease deal.

Tue, 07/10/2012 - 22:33 | 2604543 GrinandBearit
GrinandBearit's picture

Visiting So Cal tomorrow.  I'll be there for 2 weeks.  I just hope SHTF doesn't happen while I'm there.  I'll be smuggling a few 1/10 oz gold fractionals in my luggage just in case.  Theu appear as dimes to the TSA morons when viewed on the x-ray scanner.

Wed, 07/11/2012 - 00:02 | 2604823 CrazyCooter
CrazyCooter's picture

Wow, that is a great insight. Throw a handfull of change (minus the dimes plus the 1/10 eagles) in with other shit that no one will every have any reason to look at (e.g. clothes and nothing but clothes) and it works. Now, that said, I think one can transfer up to some amount of cash value of coins/etc (10k?) without trouble anyway.

Which begs the question, can Mr T fly with his 750k of gold chains? He could TOTALLY be a gold mule for someone, somewhere, wearing real gold out and replica tungsten back in....

I have come to conclude Mr T was probably the pre-emininent gold investor and hasn't gotten a lick of credit. I mean, he has it in jewelry, not bars/coins/bullion. Genius, pure genius.




Wed, 07/11/2012 - 00:43 | 2604937 NumberNone
NumberNone's picture

Pity the fool that wants to check Mr. T's gold. 

Tue, 07/10/2012 - 22:33 | 2604545 JackT
JackT's picture

Last one there is a rotten egg!!

Tue, 07/10/2012 - 22:35 | 2604550 Agent P
Agent P's picture

All the towns are broke (all the towns are broke), and the bonds won't pay (and the bonds won't pay)...California Dreamin', my pension's gone away...

Wed, 07/11/2012 - 00:04 | 2604835 CrazyCooter
CrazyCooter's picture

Yup, pensions and other social obligations are going to be the big bankruptcy that will be very sad to watch.

Call the family you love and make sure they know you will support them (fuck the ones that grate your nerves in two hours during the holidays). Suicide will claim a lot of lives in the coming years and knowing someone cares and will help could make all the difference.

In fact, now is a great time for you to make that call.



Tue, 07/10/2012 - 22:43 | 2604574 grunk
grunk's picture

She who laughs last...

Tue, 07/10/2012 - 22:47 | 2604594 mjk0259
mjk0259's picture

3 out of 18,000 towns, 1 of them a slum.1 tiny.  Not much of a trend.

Tue, 07/10/2012 - 23:14 | 2604683 Uber Vandal
Uber Vandal's picture

3 towns out of 18,000.

Not much of a trend...

Where has something similar to that been said before?

"At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained" Bernanke said in prepared testimony to Congress' Joint Economic Committee. March, 2007.



Tue, 07/10/2012 - 23:49 | 2604798 Tinky
Tinky's picture

What, me worry?

Wed, 07/11/2012 - 09:10 | 2605551 mjk0259
mjk0259's picture

Avg of 8 towns a year file for bankruptcy including even at peak of real estate boom. The number of towns existing goes up every year.

Tue, 07/10/2012 - 23:20 | 2604699 SmittyinLA
SmittyinLA's picture

Lots more to come, Bell,Cudahy,Huntington Park, Maywood,Los Angeles-all of these cities are broke right now but being used as a criminal enterprises to loot even more and assume even more debt, their only purpose is to facilitate even more debt.

Fortunately for CA citizens, they can write their own bankruptcy terms via referendum.

Tue, 07/10/2012 - 23:51 | 2604804 Centurion9.41
Centurion9.41's picture

Seriously, are you that stupid.  All trends begin, with 1. 

Wait, I'm sorry, that was extremely rude of me.  I'd like to make it up to you. 

I've got this cant miss opportunity where you will be the SENIOR investor, it's an MBS that pays....

Wed, 07/11/2012 - 00:50 | 2604953 Arnold Ziffel
Arnold Ziffel's picture

"but it's only a tiny leak...."


Wed, 07/11/2012 - 04:54 | 2605165 Red Heeler
Red Heeler's picture

"3 out of 18,000 towns, 1 of them a slum.1 tiny.  Not much of a trend."


Tue, 07/10/2012 - 22:52 | 2604616 hannah
hannah's picture

Meredith Whitneywas 100% correct...all these and more municipalities did go bust but pres hussein bailed them all out with printed money. just because they didnt file bnk a week after she made those statements doesnt mean they werent tits up at that point.

Tue, 07/10/2012 - 23:03 | 2604646 mjk0259
mjk0259's picture

Most towns are not going bankrupt because they can just keep raising property taxes. In my town it's gone from 2,000/yr to 10,000/yr in 15 years for an average house. They can also implement local income tax in some states and local sales tax in other places. You can move but it will happen almost everywhere.


Wed, 07/11/2012 - 00:15 | 2604848 jimmyjames
jimmyjames's picture


Good post of todays events-

There is a limit to affordability-

We're there-

Prices must decline to meet tax demands--

They've got us on the the run-

There is a wall-

Wed, 07/11/2012 - 00:11 | 2604855 Real Estate Geek
Real Estate Geek's picture

Not so much in CA, due to Prop 13

Wed, 07/11/2012 - 00:16 | 2604875 object_orient
object_orient's picture

  Most towns are not going bankrupt because they can just keep raising property taxes


Not in CA: Prop 13

Wed, 07/11/2012 - 01:27 | 2605008 Citxmech
Citxmech's picture

Dude, where the fuck do you live?

Wed, 07/11/2012 - 08:51 | 2605483 mjk0259
mjk0259's picture

The great state of New Jersey.

Property tax - we're number one!


Wed, 07/11/2012 - 14:26 | 2606952 tip e. canoe
tip e. canoe's picture

how about an AG exemption?   even with new rules, you only have to make $1k income/yr on your land to qualify in NJ.

Tue, 07/10/2012 - 23:08 | 2604663 Hillbillyfreak
Hillbillyfreak's picture

Fastest moving item on -- muni bankrupt forms.

Tue, 07/10/2012 - 23:10 | 2604671 Joke Heros
Joke Heros's picture

I stick it out in Berdoo because my standard of living expectations are low anyways, and it's like a modern day ghost town, quiet and eery.

There's been some pretty delusional ideas from SB politicians ever since the air force base shut down. My favorite was, after spending decades filling and, diverting, and damming all the local waterways, (and then overdeveloping with little infrastructure) they had this great idea to reopen these waterways and turn downtown into the next San Antonio Riverwalk style attraction. Problem is it required wiping out the west end, sending thousands of multigenerational homeowners (and homeless communities) packing. After that idea burned, not much else has gone on except politician scandals and lawsuits, and a frighteningly high murder rate.

 I believe there was a recent stat that said nearly 50 percent of city of San Bernardino residents were on some sort of government aid (unemployment, welfare, etc.)

 The surrounding cities are not much better. The city council howlings that occurred when the state decided to pull Redevelopment Agency funds was hilarious. "But we need that money!"

Tue, 07/10/2012 - 23:48 | 2604792 object_orient
object_orient's picture

The RDA cuts made further can-kicking impossible. San Bernardino's city manager and a few others looted what they could and jumped ship just in time. Somehow a 1.x million budget surplus changed to a 2 million deficit, from an "accounting error." Good thing nobody goes to jail for stealing (lots) of money anymore.

Wed, 07/11/2012 - 00:13 | 2604860 Real Estate Geek
Real Estate Geek's picture

 I believe there was a recent stat that said nearly 50 percent of city of San Bernardino residents were on some sort of government aid (unemployment, welfare, etc.)

Sounds like a fair proxy for the entire country.

Wed, 07/11/2012 - 04:01 | 2605135 Gavrikon
Gavrikon's picture

Many parts of San Berdoo (where I grew up) are now barrios.  Mexican food markets everywhere. My dad moved to Texas after mom passed away.  It broke her heart when the graffiti began to appear on the side of their little church walls, and the urine started appearing against the side of their modest little house.

Perhaps I don't understand the situation that well, but it appears to me that there is  wealth transfer of sorts happening.  Cities and counties (of which SB counry is the largest in the US) are going bankrupt so as not to have to pay promised pensions, while still allowing them to support the the welfare recipients.  Probably too simplistic, I know.  If someone who still lives there could comment?

Tue, 07/10/2012 - 23:17 | 2604687 buffettwanab
buffettwanab's picture

I live in Ventura county and am sure that we are not far behind LA, a total fkn jokle. Its been frustrating to see all the the cities and counties make with the union whores at the expense of the taxpayer. Ive always thought that its going to be such a glorious end when it comes.

So ill make a toast to all you damfrs that brought us to this totally idiotic end, go foff and die.


Wed, 07/11/2012 - 00:08 | 2604845 Bear
Bear's picture

You must not be a home owner (or renter) ... There is still at least 10 trillion left in Cali property value ... property taxes will eat us alive. They are not at all worried since the golden goose is still alive and well. Our property taxes will fund the retirement every public employee in the state.

California = State of Confusion

Tue, 07/10/2012 - 23:23 | 2604712 world_debt_slave
world_debt_slave's picture

Will I be able to esscape Kalifornia in my less than two weeks window?

Wed, 07/11/2012 - 08:15 | 2605354 TheMerryPrankster
TheMerryPrankster's picture

We are all Kalifornia, as JFK said when he spoke at the Berlin Wall Replika in Disneyland "Ich bin Kalifornian!"  at which point LBJ raised his arm in salute and shouted "Kalifornia uber alles!"

The rot seeps out of washington D.C. spreading through the nation, a trickle at first and now a fire jumping from city to city burning affluency and prosperity to the ground. Soon we live only in ashes while the firemen stand around and do nothing but piss on our heads and call it rain.

Trickle down economics has bladder cancer and soon even the urine will stop flowing as the system dies from its own rot and malfeasance.

Tue, 07/10/2012 - 23:26 | 2604721 palmereldritch
palmereldritch's picture

Interesting article here from 2010 musing about Chapter 8 and the constitutionality of States' bankruptcy.

The last line of the piece is a killer:

"There are ominous parallels between the states' predicament and the condition of the big banks in 2008 before they were bailed out. The one big difference is that, this time, we can see the problem before it blows up and we have a real opportunity to do something about it before it's too late,"

And the banks sitting with all those bailout dollars that helped bankrupt the States in the first place see it most clearly as they hover like the vultures they are...still waiting to privatize and plunder public assets for pennies on the dollar.

Tue, 07/10/2012 - 23:48 | 2604790 Centurion9.41
Centurion9.41's picture

Constitutionality!  WTFLOL

Under the Constitution...

- slavery was protected

- babies are killed

- homes are take to build malls

- and you were just told to engage in commerce or else pay a penalty, no tax, to the King for not buying one of his lord's products

Constitutionality! LOL

PS, I got this bridge in Brooklyn for you.  Cheap.

Wed, 07/11/2012 - 00:19 | 2604878 palmereldritch
palmereldritch's picture

That is correct. I am a writer for CNBC.

Tue, 07/10/2012 - 23:39 | 2604763 Catflappo
Catflappo's picture

Disneyland being in California is appropriate ce n'est pas?

Tue, 07/10/2012 - 23:40 | 2604768 monopoly
monopoly's picture

Now we are getting somewhere. Another 200,000 + face reality.

Tue, 07/10/2012 - 23:44 | 2604769 Centurion9.41
Centurion9.41's picture

The whole system is broke.  The system was built on the ignorance of mathematics.  The people's ignorance of mathematics was played with their desires for "fairness", the holy grail of which was "everyone deserves to join the ranks of a homeowner". 

Financial Sneak Oil Salesmen [#FSOS], who populated both sides of the political spectrum, preyed on YOU. 

They told lies like Fabrice Tourre and defended politicians with arguments the ignorant would buy; like Barry Rithotz', the market #FSOS, author of the "The Big Lie".  BR makes a living off of presenting "financial data" analysis to others; the high-priests of those who make livings off of the mathematical ignorance of others.  Guys like Taibbi and Stewart are merely maggots who care not about the truth but only feeding off the pile of manure left behind by the #FSOS.

Meridith, she's no great intellect, nor noble Joan of Arc who came to warn of an approaching revolution.   But her general theory, was sound. 

That those who manage billions, and I know a few of them, scoffed at her theory, should have raised your interest.  MW is in the company of the great practitioners of science and religion; which is all Economics really is, a perversion of science treated like a religion.  Virtually ALL the great scientist and religious who put forth world changing ideas were first scoffed at by the high-priests of their field, then rejected.

Here's the math that is lost in all the debates, and obscured by moving the decimal place through CB printing presses.  What I am to say is nothing new to those who are well educated in the situation.  If you've been on ZH for more than a few weeks, you're already probably figured it out.

The DEMOGRAPHICS CAN NOT BE OVERCOME by any of the solutions put forth.  Not austerity, not monetary debasement. 

The only thing the latter does is keep the mobs at bay by giving them the chance to eat cake [Twinkies, and their various forms really] and ensuring that modern versions of Deep Thought keep them like this

Without incredible increases in productivity, there is no mathematical way out of the debt issue because the DEMOGRAPHIC'S make it impossible.

The rest of the world, because their demographics are even more f'd than the US, will fail before the US; our laws regarding business and the education of our populace help give us an advantage, but it's really the demographics.

The great irony is this.

Those 99%er kids living in their parents basement.  Well as long as they stay in their parents basement until the mess is over, will have it good.  Emerging market equities will be very cheap, fixer up housing plentiful - that's if they can't simply move from the basement to the master bedroom, and jobs.  Well they will be back to normal.   They'll be mostly "service economy" jobs, but they'll be jobs.

Service economy, what Econ PhD with a tin foil hat ever came up with that line of BS...

Wed, 07/11/2012 - 00:06 | 2604836 OldPhart
OldPhart's picture

Great, now we're doubly screwed...Hostess went more twinkies.

Wed, 07/11/2012 - 07:44 | 2605314 TheMerryPrankster
TheMerryPrankster's picture

Another sign of the end times, no twinkies.

Wed, 07/11/2012 - 08:32 | 2605422 ZeroAvatar
ZeroAvatar's picture

I don't think the shelf life for those things has ever been determined.  Hang on to any that you have, they'll still be good 'on the other side'.

Wed, 07/11/2012 - 00:17 | 2604876 Real Estate Geek
Real Estate Geek's picture

Don't dis Tabbi.  He's about the only journalist who's worth a damn.

Wed, 07/11/2012 - 16:07 | 2607519 waterhorse
waterhorse's picture

Agree.  I like Barry R. too.

Tue, 07/10/2012 - 23:47 | 2604786 ac3
ac3's picture

Dont worry folks Jerry Brown is protecting all those 8% pensions bitchez.....slash and burn

Wed, 07/11/2012 - 00:00 | 2604817 rufusbird
rufusbird's picture

Every day I have to tell someone, it is not an event. I it is a process. Every day I see progress of the process. Every day  I see something new that reinforces the idea that we are in a downward spiral.


Wed, 07/11/2012 - 00:02 | 2604821 Bear
Bear's picture

Better to be the first than the last ... Orange County went BK in 94 ... bounced back by 98. San Berdo goes BK and bounces back by ... Oh, 98

Wed, 07/11/2012 - 00:03 | 2604830 OldPhart
OldPhart's picture

Apparently it's a done deal.

I expect to see SanBerdoo become the next Detroit hellhole with a thirty mile perimeter of abandoned houses, strip malls, and former government facilities.  It would be nice to see the area turn back into Orange Groves and vineyards, at least there would be a return to productive use.

It was such a trajedy to watch them tear out all those vines and trees.

Wed, 07/11/2012 - 00:15 | 2604867 Bear
Bear's picture

How come Reuters reports this ... or did Al Jazerra break it first?

Wed, 07/11/2012 - 01:29 | 2605012 Rearranging Dec...
Rearranging Deckchairs's picture

Wow and it was already affectionately referred to as San Bern-a-ghetto a decade ago by College students at the Claremont Colleges.

Wed, 07/11/2012 - 08:35 | 2605429 ZeroAvatar
ZeroAvatar's picture

When that fault line 20 or 30 miles west of San Diego finally goes, San Berdoo will be the next 'oceanfront property'.  I don't think the tsunami will make it to Arizona.

Wed, 07/11/2012 - 00:21 | 2604882 Hillbillyfreak
Hillbillyfreak's picture

High Speed Rail needs investors.  Retirement funds need yield.  You got it.... calpers, public employees retirement funds buy those high speed rail bonds, not at 8%.... 9%, 10%... how high will they go.  Dont worry, be happy.  Finance 2012.

Wed, 07/11/2012 - 00:29 | 2604902 walcott
walcott's picture

Jerry? Jerry? Jerry remember me?

Fat Linda Ronstadt Mistaken for Michael Moore, Ejected from All-You-Can-Eat Vegas Buffet

Wed, 07/11/2012 - 01:47 | 2605032 Henry Hub
Henry Hub's picture

Hay man, go easy on Lynda. She was an an amazingly hot chick in her time and one of the best singers of her generation. Everyone gets old and fat. Cut her some slack.

Wed, 07/11/2012 - 03:44 | 2605129 Gavrikon
Gavrikon's picture

Well, old anyway.

Wed, 07/11/2012 - 00:29 | 2604903 q99x2
q99x2's picture

The bankruptcy courts are going bankrupt.

Wed, 07/11/2012 - 00:30 | 2604907 boeing747
boeing747's picture

Let's build more parks, roads and bridges (to nowhere?).

Let's hire more teachers, policemen and firefighters.


Oh, wait, let's 'Forward' to bankrupcty court.


Wed, 07/11/2012 - 00:36 | 2604922 TheMerryPrankster
TheMerryPrankster's picture

or lets bury the powerlines underground like in Europe,so every time we geta severe storm, the power goes out for weeks.

Jeez there's an investment.


Remember when an investment and an imrovement were nearly equivical? Now an investment is a piece of paper that says you own more pieces of paper and under certain conditions you might get more pieces of paper


Papering away our prosperity.

Wed, 07/11/2012 - 00:32 | 2604910 JackT
JackT's picture

CHAPTER 9 Has Been Filed

Total Residence: 210,000

Wed, 07/11/2012 - 00:35 | 2604918 tongue.stan
tongue.stan's picture

I pray to the gods that people will start leaving in droves.


As if.

Wed, 07/11/2012 - 03:00 | 2605108 Lednbrass
Lednbrass's picture

Unfortunately if that happens its the equivalent of plague flea infested rats moving on after the humnas died, they will only infect other areas and bring the same rot that destroyed where they left.

Wed, 07/11/2012 - 00:38 | 2604924 chump666
chump666's picture

Meredith Whitney got dissed by the fools at Marketwatch (no offence guys, but your kinda 'real' time charts kinda save your website, other than that...).

"Bank of Kenya" hahahaha

F*ck, China tries to juice the global economy with their PBoC rate cut...and the market sells.  Central banks,  payday is coming...

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