Godlike Productions - Reply to Thread

Users Online Now: 2,160 (Who's On?)	Visitors Today: 684,962
Pageviews Today: 1,118,356	Threads Today: 450	Posts Today: 7,549
11:35 AM

REPLY TO THREAD

Subject MOODY’S WARNS OF MASS CALIFORNIA MUNICIPAL BANKRUPTCIES....

User Name

Font color: Font:

In accordance with industry accepted best practices we ask that users limit their copy / paste of copyrighted material to the relevant portions of the article you wish to discuss and no more than 50% of the source material, provide a link back to the original article and provide your original comments / criticism in your post with the article.

[quote:Anonymous Coward 18602520:MV8xOTYyODk4XzMyOTMyMzM3X0YwRjNDMTcw]
[quote:Muzzle:MV8xOTYyODk4XzMyOTMyMjE5XzI0QkZFNEMy]
[quote:Anonymous Coward 22248634:MV8xOTYyODk4XzMyOTMxNjU2X0M1RDAzQjY1]
[quote:Anonymous Coward 21681179:MV8xOTYyODk4XzMyOTI5NDcwX0U1RDUyOUUz]
[quote:Anonymous Coward 22223638:MV8xOTYyODk4XzMyOTI5MzgyXzg5MEM0Mjg1]
Some cities going bankrupt now is actually a good thing. Next year they are back and then can take on new debt.
[/quote]

It's not that easy.  In such an environment it would be very difficult to borrow money.  Also, the bondholders will lose an incredible amount of wealth,  most of the money raised for gov. debt actually comes from individuals, retirement funds and investment funds, and if they lose big they will not have money to invest in future debt.....
[/quote]

So true.  So what happens when retirement funds are invested in these bonds that are not repaid?  Taxpayers are on the hook for the state retirement benefits.  No future debt, but taxes go up! Big time.
[/quote]

And when majority have not the money to pay their taxes?
What then?
[/quote]

Taxpayers are only on the hook to pay the retirement benefits if the city does NOT go into bankruptcy. If the city goes into bankruptcy the city has to go through a structured settlement. That is what's going on right now with the cities that have bankrupted. The union lawyers are scrambling like roaches crawling out of a freshly opened crawlspace for 1st dibbs of the structured settlements.
[/quote]

Original Message The klaxon horn went off this evening for California municipal bondholders when Moody’s credit rating service issued a report stating that the plummeting financial condition of many California counties, cities, school districts and other government agencies will soon result in large numbers of municipal bankruptcy filings. Concerned about their own potential liability for providing high ratings that encouraged conservative elderly Americans to invest in risky bonds; Moody’s announced they will undertake a wide-ranging review of municipal finances because of the growing insolvencies.

The Moody’s report comes just two days after we reported that “CALIFORNIA SALES TAX REVENUE NOSE-DIVES BY 33.5%.” Stock brokers have often recommended California municipal bonds as very safe investments, due to historically low default rates and relatively stable finances. But Moody’s said that outlook is changing after the Chapter 9 Bankruptcy filings of Stockton, San Bernardino and Mammoth Lakes.

Moody’s is especially concerned with the growing attitude among many cash-strapped cities that filing bankruptcy to avoid paying bondholders, is politically more advantageous than cutting spending. As a result, Moody’s will re-assess the financial condition of all California cities, which issues about 20 percent of the municipal bond volume nationwide, “to reflect the new fiscal realities and the governmental practices.”

The Moody’s report said the credit rating service will also examine the outlook for municipal bonds in other troubled states. Robert Kurtter, Managing Director of public finance at Moody’s, would not say which states they will review, though Kurtter mentioned Michigan and Nevada as possibilities.

[link to www.chrissstreetandcompany.com]

Pictures (click to insert)





\| Next Page >>