Jefferson County Files Largest Ever Chapter 9 Filing

Tyler Durden's picture

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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YesWeKahn's picture

Anything starting with a J is in trouble. I think those are jackasses.

redpill's picture

Place your bets, which goes under first, Jefferson or Jefferies?  Someone go get the Dick Handler.

truont's picture

Meridethwhitneysayswhat?

Andrew Jackson epitaph's picture

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

strannick's picture

Yo whit NEY! You my girl! WHOO!!!!

Careless Whisper's picture

No one should be rejoicing in this, especially people from New York, Illinois, or California.

WestVillageIdiot's picture

Don't forget New Jersey.  I think you overlooked New Jersey. 

Hard1's picture

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!

jeff montanye's picture

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.

divide_by_zero's picture

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.

Don Birnam's picture

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

Don Birnam's picture

I think I've seen that chap's mug on "Fast Money."

+1

Tijuana Donkey Show's picture

Lampreys don't kill their host......

Don Birnam's picture

True, but they exhibit all the other requisite characteristics of a TBTF outfit: invasive, predatory, and parasitic.

wisefool's picture

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.

  • Cheat-evade taxes (Romney, Timmay, Buffet)
  • Go Gault
  • Join the 2/3rds 
  •    ...... or any combination of the 3.

This is how democracy dies. Europe is showing us the way.

Flakmeister's picture

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...

DeadFred's picture

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.

kaiserhoff's picture

Taxpayers from Illinois and Cali should be rejoicing.  Blood suckers..., not so much.

Chuck Walla's picture

Illinois gets what it so richly deserves.  Corruptuion is very expensive and, knowing this, they still go for it everytime.

Nigh Eve's picture

REVERSE bailout... bitchez !!

...courtesy of Occupy Jefferson County.

JPM Hater001's picture

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.

gangland's picture

all your bonds are belong to us

 

woot FUCK YOU JAIME! EAT IT BICH!

Buck Johnson's picture

I bet Jefferies, they may be 48 hours from declaring bankruptcy or are waiting until Sunday so they can file bankruptcy.

Deadpool's picture

schedule Meredith for CNBC Morning Call

John Law Lives's picture

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.

Piranhanoia's picture

TPTB will change the definition of year soon. What choice do they have?

my puppy for prez's picture

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.)

Josh Randall's picture

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. 

John Law Lives's picture

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?

dark pools of soros's picture

they should just print a bunch of Jeff-U-Bucks and send them to the Mourge

Iam_Silverman's picture

"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!

CompassionateFascist's picture

Prolly Not. This is a BLACK-ruled sinkhole that is defaulting. And that old Confed money is worth big ZOGbux now.

Josh Randall's picture

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.

 

Strider52's picture

I lived in Orange County, Calif when it went bankrupt. I didn't notice a single hair out of place.

Blano's picture

Did you say something?  I'm hopelessly distracted.

NotApplicable's picture

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.

John Law Lives's picture

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.

fightthepower's picture

How about they save the money first and then spend it?

John Law Lives's picture

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!

 

Seize Mars's picture

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

John Law Lives's picture

"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.