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Stockton, CA Next Muni Default Domino To File

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Mon, 10/24/2011 - 08:50 | 1803855 mayhem_korner
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Harrisburg - POP!

Stockton - POP!

It's like the first few kernels of a jumbo Redenbacher bag in the microwave.  :D

Mon, 10/24/2011 - 08:56 | 1803880 HelluvaEngineer
HelluvaEngineer's picture

Harrisburg was "fixed" by the Governor.  Same will happen here.

Mon, 10/24/2011 - 09:00 | 1803893 mayhem_korner
mayhem_korner's picture



"Fixed" is the new statist term for wealth transfer.

Mon, 10/24/2011 - 09:14 | 1803937 TruthInSunshine
TruthInSunshine's picture

15 years ago, the U.S. had Steve Jobs, Johnny Cash & Bob Hope.

Today, the U.S. (and the EU) have no jobs, cash or hope, bitchez.

Mon, 10/24/2011 - 11:39 | 1804509 William Murderface
William Murderface's picture

Kevin Bacon, please don't die.

Mon, 10/24/2011 - 12:04 | 1804625 MachoMan
MachoMan's picture

It was clever the first time...  and I wouldn't say it's being beaten to death yet...  but, please stop saying it.

Mon, 10/24/2011 - 13:28 | 1804983 anony
anony's picture

It would be best if your advice is ignored as many may not have seen it the first time around.

There is no way I can read all the material here and on other blogs. There isn't enough time in a month to get through even one web site's post and comments.

It's still clever, I haven't seen it before, and if it appears again, I'll just presume that someone else gets to see it for the first time.

No harm, no.....


Mon, 10/24/2011 - 13:50 | 1805086 mayhem_korner
mayhem_korner's picture



Are you curled up in a basement somewhere waiting for the The Wizard of Oz to come out on VHS?

Mon, 10/24/2011 - 09:28 | 1803988 Carlyle Groupie
Carlyle Groupie's picture

"It's like the first few kernels of a jumbo Redenbacher bag in the microwave."

LOL. I liked that.

Hey guess what kids. This is one situation you will never see in China.

'merika muni's; time to chew on that poison pill. Ask Meridith, she'll tell ya!

Thanks! From China. Peace be with you.

Mon, 10/24/2011 - 08:52 | 1803862 brew
brew's picture


Mon, 10/24/2011 - 08:56 | 1803865 lolmao500
lolmao500's picture

It's all bullish. Look :

U.S. municipal defaults fell in the last quarter to 12, totaling $126 million, from 18 a year earlier and 24 in the same period of 2009, according to the Distressed Debt Securities Newsletter.


Any date for the default being official?

Mon, 10/24/2011 - 08:53 | 1803870 malikai
malikai's picture

We're in for quite the comedic juggling act here. Munis, Europe, BAC, etc. It will make for some good television, but the sore asshole part we're all going to feel sorta turns me off to the fun.

Mon, 10/24/2011 - 08:53 | 1803871 Saxxon
Saxxon's picture

Right up the road from my fair burg.

Tax revenues are one buboe they cannot hide.

No position.

Mon, 10/24/2011 - 08:53 | 1803872 buzzsaw99
buzzsaw99's picture

Were I the Jefferson County authorities I would pay only a token amount.

Mon, 10/24/2011 - 08:59 | 1803876 dwdollar
dwdollar's picture

Norman, Oklahoma had a 10-15 million dollar deficit planned for next year. The general fund has about 25-30 million left in it. I imagine this is the typical story all across this country. Time is running out... Major cuts will have to be made for 2013.

Mon, 10/24/2011 - 09:04 | 1803913 buzzsaw99
buzzsaw99's picture

no link you stink

Mon, 10/24/2011 - 09:09 | 1803922 dwdollar
dwdollar's picture

About the only news that covers it is the OU paper from time to time. You can look at here though...


Mon, 10/24/2011 - 09:18 | 1803936 buzzsaw99
buzzsaw99's picture

i guess you meant for me to read through the 2013 budget pdf. :yawn:


the city of norman has money coming out its butt. they projected a shortfall last year then found a million bucks they didn't even know they had. right now they are arguing how to fund a new animal shelter, with the $3M extra bux in the safety fund, or pass another bond measure. it goes for a vote soon. if there were any municipal bond i would be willing to hold through this depression would be ou or the city of norman. the only problem they have is wanting to spend like a drunken californicator.


Mon, 10/24/2011 - 09:21 | 1803965 dwdollar
dwdollar's picture

I agree, IF the education bubble holds. They'll be able to raise taxes to whatever in order to survive.

Mon, 10/24/2011 - 09:26 | 1803981 buzzsaw99
buzzsaw99's picture

ain't it the truth? they want to tax themselves to death around here. i swear we are being run by big city liberals.

Mon, 10/24/2011 - 09:32 | 1804007 dwdollar
Mon, 10/24/2011 - 09:36 | 1804018 buzzsaw99
buzzsaw99's picture

that would make a good halloween mask.

Mon, 10/24/2011 - 10:34 | 1804192 tarsubil
tarsubil's picture

What a profile. Public management consultant, political science professor, policy analyst, all kinds of feel good boards and councils, and to top it all off a methodist named rosenthal. They didn't mention if she was a ginger and a jersoyian too.

Mon, 10/24/2011 - 09:24 | 1803975 Manthong
Manthong's picture

Maybe the animal shelter in Norman can help feed the folks in Stockton and Harrisburg.

Mon, 10/24/2011 - 09:27 | 1803989 TruthInSunshine
TruthInSunshine's picture

Stockton just needs some 'animal spirits,' and everything will turn around for them.


Mon, 10/24/2011 - 09:28 | 1803990 buzzsaw99
buzzsaw99's picture

they'd just get mange and end up in the incinerator.

Mon, 10/24/2011 - 15:22 | 1805482 BooMushroom
BooMushroom's picture

The article says Stockton is a farming kind of place.  It's not.  It's a city, with a large minority population.  The kids have never seen a pig or a chicken or a rabbit, and even wouldn't know that they were for food.  The idea of a Dad getting up in the morning and going to work every morning is as foreign to them as sitting around all day and getting paid to drink and smoke is to us.

Mon, 10/24/2011 - 08:56 | 1803878 Sequitur
Sequitur's picture

Match inching closer to the fuse . . . .

Mon, 10/24/2011 - 09:22 | 1803968 WonderDawg
WonderDawg's picture

The fuse has been lit, the only question is how long is the fuse?

Mon, 10/24/2011 - 08:57 | 1803884 PulauHantu29
PulauHantu29's picture


On Sunday October 23, 2011, 2:20 pm EDT

Anyone whose interest has been piqued by Occupy Wall Street and similar protests, here’s another reason to support their cause.

On Wednesday, the government released data from 2010 paychecks . This includes numbers from payroll taxes that have been reported to the Social Security Administration. They paint a disturbing picture.

The data showed that in 2010, there were fewer jobs and they paid less. One exception is people making more than $1 million annually. This increased by 20 percent from 2009.>>


It goes to the soaring inequality we are seeing worldwide.

Mon, 10/24/2011 - 09:18 | 1803955 LawsofPhysics
LawsofPhysics's picture

None of this is sustainable so why worry, just hedge accordingly.

Mon, 10/24/2011 - 08:59 | 1803891 mayhem_korner
mayhem_korner's picture



A colleague of mine argues adamantly that municipalities cannot default because "state law says so."  I think she is infested with logic antibodies...

Mon, 10/24/2011 - 09:11 | 1803930 ZackAttack
ZackAttack's picture

Well, there's a partial truth in there. Not all, but a number of state constitutions require taxes to be raised if necessary to pay GO bond coupons.

Mon, 10/24/2011 - 09:23 | 1803970 mayhem_korner
mayhem_korner's picture



What happens when the debt exceeds the recoverable tax base?  Take your time...

Mon, 10/24/2011 - 15:24 | 1805487 BooMushroom
BooMushroom's picture

Furlough Fridays become Door-to-door confiscation day?

Mon, 10/24/2011 - 09:12 | 1803933 Chuck Walla
Chuck Walla's picture

Anyone who thinks states can outlaw default is An obvious Obama voter.

Mon, 10/24/2011 - 09:19 | 1803959 LawsofPhysics
LawsofPhysics's picture

Yes, sort of like outlawing plate techtonics and bad weather.

Mon, 10/24/2011 - 10:05 | 1804108 chumbawamba
chumbawamba's picture

Can we outlaw stupid while we're at it?  Thx.


Mon, 10/24/2011 - 09:00 | 1803895 Johnny Lawrence
Johnny Lawrence's picture

Before we declare all muni bonds to be bad, I'd like to know how long there have been problems in Harrisburg and Stockton.  I wouldn't doubt if these cities have been knee-deep in fiscal problems for years.  This was very true for Central Falls, RI, which was in financial problems for decades.

Mon, 10/24/2011 - 09:05 | 1803914 mayhem_korner
mayhem_korner's picture



Not all muni bonds are bad.  All that needs to happen is to quarantine all munis in NY, New England, the deep south, MI, CA, AZ and NV.  Otherwise, the default prospects for the rest of the country are probably < 15%.  It's quite bullish.  :D

Mon, 10/24/2011 - 10:11 | 1804121 chumbawamba
chumbawamba's picture

Stockton has been on a downward trajectory for years.  It's a city that really belongs in Detroit.  However, that being said, I wouldn't count it out.  I've seen a lot of tantalizing signs of growth there in the past couple years.  Lots of businesses have moved out that way to take advantage of the rock bottom rents.  I5 (the main artery of California state) cuts right through Stockton.  It's also got a port by way of the California Delta that opens up to the Pacific.  Being in the middle of vast tracts of farmland, lots of agricultural products terminate there.  It has lots of industry currently sitting dormant that will have lots of relevance in a new economy.  Stockton may go under for now but I think it can come back as a strong center of commerce after the fall.

Just FYI.

I am Chumbawamba.

Mon, 10/24/2011 - 11:52 | 1804579 Boxed Merlot
Boxed Merlot's picture

Hunger will probably not be an issue in Stockton as you've pointed out. Weather, topography, (14' above sealevel), agriculture and central location between major travel routes (I5 and the infamous Hiway 99 straddle our east and west borders) including goods to / from the Port of Oakland and the (Uncle Warrens)railroad activity all contribute to it's future economic viability.

Personally, the "strength" of diversity has been overplayed in the community and has created division and subsequent suspicion, isolation and economic contraction.

Rather than "celebrating" our individual racial / cultural "uniqueness", a return to promoting common social goals of security, integration and prosperity would be a better exercise.

Until we can get a handle on the mortgage bifurcation madness and the ensuing 65-75% decline in local residential RE values, Our struggles will continue. The culprits of this debacle have yet to provide restitution to the aggrieved, (individually and collectively-as tax collections show), though they were made whole over 3 years ago.

Seek Justice, Love Mercy, Walk Humbly.

Mon, 10/24/2011 - 12:08 | 1804642 Jena
Jena's picture

The drought of the last few years hit the Central Valley (and Stockton, by extension) hard.  The growth you speak of may be due to the recent relief of that drought.  Let's hope it holds.  Seeing the miles and miles of dead farmland was heartbreaking.

The water wars between Western States in the years to come will be ugly, but inevitable.

Mon, 10/24/2011 - 15:32 | 1805518 BooMushroom
BooMushroom's picture

"The Drought" meaning "The EPA making it illegal to use the water in the delta, to protect an invasive spieces bait fish with no inherent value."


Yeah, that was rough.   but the data say Stockton is a crappy place to live anyway: http://www.city-data.com/crime/crime-Stockton-California.html

Mon, 10/24/2011 - 16:05 | 1805702 Jena
Jena's picture

The EPA's suck-balls policy made the worst of a bad situation, meaning the diminished water from the actual drought went to protect the delta smelt rather than grow crops, yeah.


Great site, by the way.

Mon, 10/24/2011 - 20:05 | 1806480 Vlad Tepid
Vlad Tepid's picture

The inherent value of the Delta Smelt is to give a convenient excuse for Delta area farmers to shut down the pumps sending their water to the infertile desert called the South Valley.  Those welfare-billionaire farmers dried up Tule Lake a generation ago to make the desert bloom with water intnesive crops like cotton and alfalfa, dried up the Stanislaus River before it reaches the Bay (or the Delta) and now they want to reach into Nature's Switchboard for the California water system and dry up the only natural irrigation farming system in the state?  Fuck them. 

Everytime a Delta conservative farmer type starts to think they might be being robbed, these K Street types sidle up to them with this "Surely you wouldn't support a FISH," argument. 

Mon, 10/24/2011 - 09:03 | 1803910 tarsubil
tarsubil's picture

Can't the Fed just give them some loans to cover their payments?

Mon, 10/24/2011 - 09:08 | 1803924 buzzsaw99
buzzsaw99's picture

or swap for some old road equipment (at brand new 2012 prices)?

Mon, 10/24/2011 - 09:12 | 1803935 ZackAttack
ZackAttack's picture

What do you think Build America Bonds were?

Mon, 10/24/2011 - 09:24 | 1803977 mayhem_korner
mayhem_korner's picture

What do you think Build America Bonds were?


A voluntary means of debt enslavement.

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