As another day passes, we get another confirmation that that racist, unpatriotic, communist traitor Meredith Whitney is absolutely right in claiming that US states are beyond rescue. Illinois, which was supposed to deny all the naysayers, by successfully issuing $3.7 billion in bonds and purchase a few months of breathing space for its insolvent pension funds, courtesy of an underwriting syndicate that includes Morgan Stanley, Goldman, Sachs & Co and Loop Capital Markets on Thursday, has just announced this, uh, isn't going to happen. Reuters notes: "Illinois' sale of $3.7 billion of pension bonds has been delayed until next week to give potential buyers time to go over Governor Pat Quinn's fiscal 2012 budget, a spokeswoman for the state budget office said on Monday." And the validation for the delay just takes Goebbels to a whole new degree:
"We are receiving a great deal of international interest on these bonds. It is only appropriate to give investors time to digest the governor's budget speech which is Wednesday," said Kelly Kraft, the spokeswoman.
Could one inquire where this international interest is coming from: Greece? Portugal? Spain? Ireland? Italy? Egypt? Tunisia? Algeria? Libya? Bahrain? oh wait, it must be Saudi "on the verge of revolution" Arabia, or Ch"we just changed our food CPI weighting"ina, or Bang "stock market is down 10% for the 4th time in a month" ladesh, or, best of all, bankrupt Japan? Inquiring minds really want to know.
The logic goes that since the rest of the world rescued Illinois a year ago, before the world itself was bankrupt, the broke state can pull it off again. Uh, no.
Illinois is turning to pension bonds for a second year in a row to raise money for its payment to state employee pension funds. A $3.46 billion bond sale in January 2010 was oversubscribed and attracted buyers from Europe and Asia, according to state officials.
Since then, however, the state's deteriorating financial condition led to bond rating downgrades as Illinois ended fiscal 2010 in "the worst fiscal position in its history," according to the state comptroller.
Last month state lawmakers passed a hefty increase in income tax rates to stave off a projected $15 billion deficit heading into fiscal 2012, which begins July 1.
Perhaps if Illinois has a huge snow storm between now and next week, when the bond sale is postponed again, the state treasurer can use that good, old (anti)climatic mainstay. In the meantime, we can all just bash Whitney for telling the truth...