Posted on 04/02/2013 6:35:23 AM PDT by SeekAndFind
Edited on 04/02/2013 6:38:34 AM PDT by Admin Moderator. [history]
A few years ago, it was fashionable to compare California, Illinois, or whatever U.S. state was struggling financially to the troubled island nation of Greece. Now, with Stockton, California the largest U.S. municipality to enter bankruptcy, it may be tempting to make another Mediterranean comparison - this time to the troubled island nation of Cyprus.
(Excerpt) Read more at realclearmarkets.com ...
This is the biggest news coming out of this decision.
So sad --
The judge 'declared' Calpers just another creditor, but did not overturn California law making them first in line. But hey, it's bond insurers who are negotiating in bad faith...
I think the article is wrong..the last sentence says that the judge ruled that CALPERS is just another creditor..I thought he ruled the opposite..that CALPERS MUST be paid in full..no haircut for them...if that stands, it will cause the big problems long term..
CalPERS will fight during the bankruptsy proceedings that according to the CA constitution they cannot recieve a haircut. They will spend more money fighting this than the other side is willing to spend, and most likely will win. What gets me is that the bonds issued were pension bonds; to make payments to CalPERS; then they turn around and screw the bond holders and still pay CalPERS.
Good analysis breakdown of the scam over here:
http://www.freerepublic.com/focus/f-news/3003260/posts
How are pension bonds even legal and how many government entities are using them???
Bankruptcy is all federal law.
The pension fund should have federal insurance.
The more screwed california, the better for the nation.
When a pension bond is issued they present to the investors that they can make a bigger return than what the interest rate is on the bond instead of paying their pension bill. But if bond holders keep losing money on this scheme they won’t be buying anymore pension bonds at any rate.
Thanks for the link. Good read and so true. Investing in munis is (was) considered a safe investment for average people saving for their own retirement, as they don’t have the fat defined benefit plans that gov’t employees do.
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