With S&P downgrade, New Jersey now second-lowest rated state

Reuters ^ | September 10, 2014 | Hilary Russ and Kanika Sikka

[C19fan]

Standard & Poor's Ratings Services cut New Jersey's credit rating one notch to A on Wednesday because of concerns about budgetary pressure from the state's underfunded public pension system.

The action makes New Jersey the second-lowest rated U.S. state for S&P, behind only Illinois, rated A-minus with a negative outlook. S&P also rates California A, but that state's outlook is positive.

It was the eight consecutive downgrade for New Jersey, but S&P's action contained a silver lining: the rating agency removed a warning of possible further downgrades in the near term and revised its outlook to stable from negative.

[C19fan]

Nice going Christie. Moonbeam Brown has done a better job in CA than you.

[needmorePaine]

Sports betting will solve all of the state’s problems.

[SeekAndFind]

I thought NJ had a fiscally conservative governor who was willing to fight the unions to take control of pension costs...

Remember all those YOUTUBE townhall videos which made him a star?

How did it end up this way?

[Alberta's Child]

Christie deserves a lot of credit for what is driving the bond rating downgrade. He's basically screwing retirees on behalf of taxpayers. I have no problem with that, because doing anything else would just chase more taxpayers out of the state.

New Jersey will have the highest bond rating in the history of mankind once it announces that it's dissolving its pension system entirely.

[Alberta's Child]

Read the article. Christie IS taking control of pension costs. LOL.

[Zakeet]

Nice going Christie. Moonbeam Brown has done a better job in CA than you.

Actually, bond ratings for public sector issued securities are worthless these days with respect to evaluating their credit worthiness. Most of the larger states and the federal government are insolvent. It's not a matter of if but when people discover just how broke they are.

Considering the miniscule coupon rate, the level of inflation, and the risk of default, why anybody would buy any sovereign debt is, in my opinion, a mystery.

[SeekAndFind]

RE: Christie IS taking control of pension costs. LOL.

And even with that, NJ is still close to the last in the fiscal ratings?

I can’t imagine what would have happened to the state had a Democrat been the governor instead...

[Alberta's Child]

NJ has been downgraded because the unfunded pension obligations are viewed by the bind rating agencies as future liabilities.

I view them differently because I recognize that they can't be liabilities if the state never pays them. And trust me ... the state will not meet its pension obligations.

[Alberta's Child]

Sorry ... That’s BOND rating agencies.

[SeekAndFind]

RE: And trust me ... the state will not meet its pension obligations.

Well, how is this not going to end like DETROIT? ( even bigger ).

[Alberta's Child]

I have said for years that New Jersey is either a small version of California or a large version of Detroit. Neither one is a good place to be. But Detroit is negotiating to pay its lenders 26 cents on the dollar for their bonds — which is a good indication of how New Jersey will solve its fiscal crisis.

[RaveOn]

Christie is fiscally conservative and a fairly decent governor, all things considered.

The problem is the state legislature is totally controlled by Democrats, a situation which hasn’t changed in years. They are mired in liberal politics and are economically illiterate — they couldn’t make change for a nickel.

[ex-snook]

" thought NJ had a fiscally conservative governor who was willing to fight the unions to take control of pension costs..."

It seems like beating up on the old lady teacher unions was not the solution even welching on the States obligation did not help. Christie is a bridge too far. All fat and no cattle. He thinks that talking a big shtick and doing nothing is how conservatives solve problems.

[Rockpile]

Sultan Hussein said that Jon Corzine was one of the most brilliant economic minds in the country.

The Sultan could issue a fatwa making Corzine the state financial czar. Problem solved.

[kearnyirish2]

Those “old lady teacher unions” are the communists’ base in NJ; the members are our upper middle class, bleeding taxpayers dry for 180 (less-than-8-hour) days of “work” (which gets little results) and enjoying benefits that vanished for most Americans decades ago.

Christie has all the right enemies, and other states will look to his strategy for dealing with the public education scam perpetrated on their own taxpayers/voters.

Christie can only be understood by those who have lived here through the worst of the taxpayers’ rape; thankfully we’re laying off public employees left & right (especially teachers before they get “tenure”), and costs are coming down. The more senior grifters are quite willing to throw new members under the bus to maintain their own privileged positions/perks.