Jefferson County Files Largest Ever Chapter 9 Filing
Update Update: Yep, it's official: JEFFERSON COUNTY COMMISSION VOTES FOR RECORD MUNI BANKRUPTCY, commissioners vote 4 to 1 to screw over JP Morgan
Update: according to an update tweet, "Jeffco bankruptcy: Commissioners are now discussing the motion. They have not voted yet." Things are fluid. Stay tuned.
The bad news for JP Morgan just keep on coming. According to the Tweeter account of Birmingham News, "Jefferson County Commission makes motion to file bankruptcy." We translate this to mean that the "avoided bankruptcy" state has just metamorphosed into simple "bankruptcy" - granted one which will be the largest municipal bankruptcy in history. This means that JP Morgan is now on the Unsecured Creditor Committee of the two biggest bankruptcies of 2011: MF Global and JeffCo as well. And so the second major domino after Harrisburg is down. Many more coming.
More as we see it.
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Anything starting with a J is in trouble. I think those are jackasses.
Place your bets, which goes under first, Jefferson or Jefferies? Someone go get the Dick Handler.
Meridethwhitneysayswhat?
amirite bitchez?
JEFFERSON COUNTY'S MAJOR SEWER CREDITORS
JPMorgan Chase & Co.
Bank of America
Regions Bank
Lloyds Bank of Scotland
State Street Bank of Boston
Societe Generale of Paris
Bank of Nova Scotia in Canada
The Bank of New York Mellon
Financial Guaranty Insurance
Syncora Guarantee, Inc.
Source: Jefferson County
Time to see Meredith's "O" face.
Yo whit NEY! You my girl! WHOO!!!!
No one should be rejoicing in this, especially people from New York, Illinois, or California.
Don't forget New Jersey. I think you overlooked New Jersey.
Well, there are Jefferson counties in AL, CO, TX, KY, WI and OR at least. Probably each one will go the way of their namesake from Sweet bankruptcy Alabama!
if my old (book) memory doesn't fail me, in the thirties, after the bear market rally in equities faded, money flowed into bonds and then that market had a monster waterfall decline. be careful.
Guv Moonbeam here in Cali just signed AB506 makes it harder for Munis to go BK (supported by all the Public Employee Unions of course, cities all opposed but we know who runs this place). Have a feeling the law of unintended consequences will have some strange effects, like any other case of kicking the can down the road it just gets worse later.
If Goldman is the archetype Vampire Squid, what does that make the diminutive, second-rate fiefdom of Jamie Dimon ?
"The Lamprey ?"
http://www.utsc.utoronto.ca/~youson/images/lamprey.jpg
How about a batfish?
http://www.aboutnatia.com/dive/galapagos/batfish.jpg
I think I've seen that chap's mug on "Fast Money."
+1
Lampreys don't kill their host......
True, but they exhibit all the other requisite characteristics of a TBTF outfit: invasive, predatory, and parasitic.
Trouser trout.
JFK quote "Those who make peaceful revolution impossible will make violent revolution inevitable"
Super Commitee-Tax reform is always going to fail when 51% of people pay no taxes (Payroll tax is a ponzi scheme, it is not a tax. Property tax pays for your schools to keep the kids off the street)
Then when public employees have collective bargaining rights you are bringing the percentage up to a 2/3rds super majority. the 1/3 have 3 options in this type of tyrrany that the founding fathers foresaw.
This is how democracy dies. Europe is showing us the way.
Democracy dies when 0.01% of the people embark upon a 30 year spree of kleptocracy... "Greed is Good" is no motto to base a culture or society on...
Firefighters finally got it passed. Now their locally funded bennies are backed by the full might of CA. Probably will be good for an extra couple pension checks before the whole house of cards goes down. Stay far away from California bonds nows. This is a set up for a death spiral.
Taxpayers from Illinois and Cali should be rejoicing. Blood suckers..., not so much.
Illinois gets what it so richly deserves. Corruptuion is very expensive and, knowing this, they still go for it everytime.
REVERSE bailout... bitchez !!
...courtesy of Occupy Jefferson County.
I bought 5 June 2012 puts last week at $33 for $4.44 on JPM.
Let the carnage begin.
As Potsie Put it: "pum pum pump your blood," all over Wall Street. Yeah, I know how the heart of the financial world works bitchez.
all your bonds are belong to us
woot FUCK YOU JAIME! EAT IT BICH!
I bet Jefferies, they may be 48 hours from declaring bankruptcy or are waiting until Sunday so they can file bankruptcy.
schedule Meredith for CNBC Morning Call
told ya so...
Her prediction for bankruptcies among municipalities in 2011 is not even remotely close to what is on pace to occur by the end of this year.
http://www.bloomberg.com/news/2011-07-15/muni-default-plunge-belies-whit...
The attached article is 3+ months old, but its conclusion is still accurate.
TPTB will change the definition of year soon. What choice do they have?
ROFL!
They will ponder the biblical model: What does "a day" actually mean in Genesis 1?"
TPTB extrapolates that ponderance: "Well, after all, what is a year? Why does it have to mean 365 days? It could REALLY mean 365 centuries!" (Shuffling of pages in arcane history books for an ancient civilization's "more enligtened" measurement of time.)
From your article:
Anson Clough, managing director of fixed income at Appleton Partners Inc. in Boston, which oversees $4.4 billion of assets. “That’s why we invest in municipal bonds -- municipalities have the ability to get through this,” he said. “They have that taxing power.”
Oh ya ? Not for long @$$hole - we'll see how much of that tax money gets raised as defaults, foreclosures, joblessness, and true mark to market depereciation escalates.
Entities that have the power to print currency and/or the power to levy taxes will survive longer than those that lack such power. If bankruptices among municipalies begins to gain critical mass, many believe the Fed will intervene.
"Oh ya ? Not for long @$$hole - we'll see how much of that tax money gets raised as defaults, foreclosures, joblessness, and true mark to market depereciation escalates."
From the tone of your comment, you sound as if you want to see more bankruptcies among municipalities. Do you really want to see bondholders get hurt after buying muni bonds?
they should just print a bunch of Jeff-U-Bucks and send them to the Mourge
"they should just print a bunch of Jeff-U-Bucks"
Somehow, I feel that offering to pay back the debt in Confederate Scrip might be so much more satisfying for them!
Prolly Not. This is a BLACK-ruled sinkhole that is defaulting. And that old Confed money is worth big ZOGbux now.
I want the muni system to be corrected to where it will be transparent and operable unlike the paper ponzi it is now -- whoever wants to wager risks that muni's are worthy because there are always Suckers to tax is not of my concern.
I lived in Orange County, Calif when it went bankrupt. I didn't notice a single hair out of place.
Did you say something? I'm hopelessly distracted.
Nice tits
Anybody that buys munis under the impression that the issuer can always steal more to make the bond payments deserves every bit of trauma they receive for their effort.
Sounds rather draconian of you. Municipalities float bonds to raise revenue to build schools, water treatment plants, and all sorts of public works projects. I wonder how else you think municipalities should raise the needed revenue for such projects if people are not willing to buy the bonds.
How about they save the money first and then spend it?
Operate on a cash basis with zero debt? Sure. While you are at it, why not prohibit every American from purchasing a home via a mortgage. Make them save up 100% of the cash value of the home and then buy it all at once.
Fantasyland!
By your posts, it is clear that you support coersion. In other words, municipalities are entitled to take our money, by force. In your mind, this is OK as long as the projects are noble, like schools. Did you ever think that maybe people should just keep their money, and fund a school if they choose to?
Give this a watch, and think about it.
http://www.youtube.com/watch?v=PGMQZEIXBMs
"By your posts, it is clear that you support coersion. In other words, municipalities are entitled to take our money, by force. In your mind, this is OK as long as the projects are noble, like schools."
Absolute bollocks. You will not put those words in my mouth. Aside from that, I have never advocated on ZH that other people should buy munis. I do not advise other people what assets they should buy. I do own munis (Texas GOs and Florida GOs), and I am quite confident they will be redeemed at full value when they mature.
sucker
anarchist
Relax, I didn't. Look, all I'm saying is, nobody has a right to force payments out of people. Even if it is for a noble cause. Municipal bonds are blood money. The municipality steals, and inefficiently pays bondholders with the ill gotten gains.
Did you take the time to look at the video?
You're both ASSUMING that public education is a legitimate function of Govt!
"Fantasyland!"
Not really. I did it. I'm debt-free.
Started in the U.S. Navy. Stayed onbaord and in the barracks, saving money. Bought (cash) a small singlewide on a postage stamp sized lot. Saved more money, moved into a larger singlewide with a bit more land under it. Saved money, sold that place and bought a VA Foreclosure in northern Newport News while working at the shipyard there. You get the rest.
"Not really. I did it. I'm debt-free."
That is nice for you, but we were talking about municipalities that sometimes need to raise substantial funds for public works projects. It is not realistic to think municipalities would save sufficient funds to pay for large-scale public works projects in cash.
I don't think you understand the inequity of the fractional reserve banking system and private central banking. Or maybe don't care, or maybe just can't put all of the pieces together.
The private banks create money for free and then loan it to the munis at interest. That's why they are the biggest creditors.
So, yes, there really are other constructs.
"I don't think you understand the inequity of the fractional reserve banking system and private central banking. Or maybe don't care, or maybe just can't put all of the pieces together."
Save the lecture, professor. I don't need to hear it from you.
"I don't think..."
We agree on this point.
Sorry.
Double-tap.
Itchy trigger finger these days, with all of the financial unrest and all....
I don't believe that criminals have the ability, let alone the capacity to provide goods and services, but instead, use the opportunity to steal the loot while providing the least amount of goods and services that they have to in order to retain credibility in the public eye.
As for the details of how it would work in a truly free society, I'd recommend Rothbard's "For a New Liberty."
http://mises.org/rothbard/newlibertywhole.asp
John Law is missing the point. There is legitimate muni debt, and there is fraudulent muni debt, ala Jefferson County and Harrisburg. Huge fucking difference.
Does this mean Alabama's going to have to leave the EU?
Heeyy, I ree-zint dat dare commeeennt. Roll Tide
John Law is not missing the point. I have long stated on ZH that all munis can not be condemned as an asset class because of some bad eggs (e.g. Jefferson County and Harrisburg).
Many believe? Like who? Krugman?
You can't build an arguement top down, especially quoting "many whom believe".
Mr Lennon Hendrix,
I am not here to craft an argument in defense of munis. I was responding to specific comments made by "Josh Randall". Unless "Josh Randall" is an alias for you, you be a good boy and butt out of our exchange. However, since you asked who believes the Federal Government may bail out U.S. States, why none other than MEREDITH WHITNEY thought so:
http://www.bloomberg.com/news/2010-09-30/whitney-says-states-may-need-fe...
excerpts:
"The U.S. government will face pressure to bail out struggling states in the next 12 months, said Meredith Whitney, the banking analyst who correctly predicted Citigroup Inc.'s dividend cut in 2008."
"U.S. states won't default, Whitney said."
If people on this site want to cite Meredith Whitney as a CREDIBLE source re. her prediction that a wave of bankruptcies among municipalities is coming, it would be LOGICAL for them to also consider her as a CREDIBLE source re. her view that the Federal Government may bail them out. You can't pick and choose. You either believe Whitney is credible or she is not.
Credible does not equal always unbiased.
Credible does NOT always equal 100% correct either.
That is the inherent risk in "investing"....never a sure thing...not even bonds, as we are all learning!
Muni's are not going broke because of massive drops in taxes. They are going broke becuase of massive drops in taxes being massively undereported by corporate america. Walmart is probably collecting 30 percent less taxes and handing over 50 percent less taxes and keeping the rest.
Just like mcdonalds handled food costs by getting employees to "mistakenly" not put one item in every order.
I've said this several times but it's just a matter of time before this type of fraud is going to be brought to the table and discussed because other options will become harder to impliment.
Taxation is theft, so why should any taxpayer not steal as well?
The fish rots from the head down.
The squid rots from the rectal orifice up.
Except in this case, the largest case in history so far, and one that was publicized extensively by writers like Matt Taibbi, they are going bankrupt largely because they were swindled by JPMorgan Chase.
But they knew what they were doing:
“You know, I get the impression that people think a bunch of rubes in Alabama shouldn’t be smart enough to utilize these swaps,” Langford said. “And let there be an understanding: As long as this is a legal instrument, and it drives down costs, if we have to do one tomorrow, I’ll do it again.”
http://www.rollingstone.com/politics/news/looting-main-street-20100331
Langford is rotting in prison. If you've never seen his "chiclet teeth," click the link for a belly laugh . . .
http://news.lalate.com/2008/12/01/larry-langford-arrested/
People without jobs don't pay much in taxes. Corporations that aren't selling things don't pay much in taxes.
Oh shit - Whose left?
Exactly, smart muni bond investors have anticipated this bankruptcy for years now. Meredith Whitney is a moron who got one call right. She was trying to sell her new rating agency when she made that prediction on 60 minutes. She has no idea about municipal finance.
You don't have to know anything about municipal finance, all you need to know is simple math and the answer becomes clear.
Cans can be kicked quite far down the road for quite some time.
In flatland, all roads end suddenly.
Right up until the road gets to the mountain of debt that looks like the Matterhorn. Then, not so much.
The factor that kept the bankrupts alive was a massive transfer from O'Bama to almost all of these govts. You may recall the pronouncement of Harry Reid that govt. jobs were most important to save. It merely caused a postponement.
somewhere Meridith Whitney is smiling and silently raising a glass
And I raise mine back at her, a nice Cabernet. Cheers.
When she made her call one of the Tylers gave her shit for how obvious a call it was and accused her of marketing herself. She has since been dragged through the mud, accused of lying, told her math didn't work out, and called to EXPLAIN HERSELF before congress.
It was an obvious call. BUT SHE WAS THE FIRST MAINSTREAM FINANCIAL FIGURE WITH THE GUTS TO ATTACH HER REPUTATION TO THE CALL. THAT'S CALLED RISK. SHE PUT HERSELF ON THE LINE TO WARN EVERYONE. And yeah, she did good business too. So many of these back-boneless worms are only just now showing up to bat to tell the truth. Some of them still won't.
I wanna say Whitney has balls; what she had was courage.
Right on MsCreant. And guess what? The best thing that could happen for the people of this country would be for munis to crash and crash fast. THEN us sheeple could buy in at high tax free rates and screw the federal government. You go girl.
Sorry, look at the numbers. Her 'call' isn't even remotely correct. Not even on the same continent...
Yet.
All us doomers seem to call it too early. Just true. The Tylers too. I know I did, I looked wacked for a while, and now folks are saying I was "prescient" (if you know what we know it's shooting fish in a barrel, no sport at all). It is all coming to pass, we have not even begun the real party yet. I wish we were all wrong and the evidence was marginal and shaky. Muni's will default. Not hundreds by the end of the year, but hundreds will.
Waterfall ahead.
You've been here too long. You know this too, the whole fucking shebang is unsustainable.
"Muni's will default. Not hundreds by the end of the year, but hundreds will."
... and the world will continue to spin and life will go on whilst you remain barricaded in a bunker.
I can think of $14+Trillion reasons WHY life as you know it is coming to an end...
Maybe she'll get better treatment than the attempted MSM rear guard action when Sean Egan was on Squawk Box yesterday.
They try to rip into Egan-Jones's downgrade of Jeffries, and then when he describes current political actions to buy time to prepare the public for bad news as Clintoneque (with reference to the Monica Lewinsky fiasco), Joe Kearnan tells Egan that they are trying to get Clinton on the show, so please stop talking about/mentioning Lewinsky. I kid you not.
http://video.cnbc.com/gallery/?video=3000056089
Sadly, could not access another video from Egan's visit that I also watched earlier where he was talking about the demographic element to the Euro and American crises. As the segment comes to an end, Barry Knapp cuts into what is a fascinating talk by Egan in an attempt to gloss over Egan's words with hopium, in total disregard of the real situation. It was truly pathetic to watch.
Couldnt happen to a nicer set of folks.
I hope JP's losses are deducted from Blythe's bonus/home/ass...
This will be the downdraft in silver that will enable JP/HSBC et al to cover their remaining short positions and to establish their long positions. I am locked, cocked and ready to rock...
Riding TVIX and FAZ to the moon and then planning on jumping into AGQ, SLW, PNPFF and a whole host of other miners.
JP's silver bets are hedged with their stockprice. Says Max Keiser. Today was the first day in a long time they didn't close above silver..