Posted on 04/07/2010 11:49:20 AM PDT by Cheap_Hessian
It is all those damn CDS speculators' fault! Just as we suspected over a month ago, and before Lockyer's silly missives, it was only a matter of time before muni "speculators" start getting a greater portion of the blame. In the meantime, as we have been saying for about, oh, 12 months, munis are about to implode. Here is Moody's, actually being just a year behind the curve on this one.
From Moody's
NEW YORK, Apr 7, 2010 -- Moody's Investors Service has downgraded to Aa3, from Aa2, our rating on the City of Los Angeles' general obligation bonds. At this time we have also downgraded each of our ratings on the city's general fund obligations by one notch, resulting in ratings ranging from A1 to A3 depending on the specific security pledge. The downgrade primarily reflects the continued erosion of the city's historically better-than-average willingness and ability to quickly rebalance its budget mid-year. This is a particularly important rating factor for Los Angeles since its balance sheet has typically been relatively weak for the rating level. The downgrade also partly reflects the likelihood that the city's general fund reserves at the end of the current fiscal year could be materially weaker than we had previously expected, now that an expected transfer from the Department of Water & Power may be reduced. The loss of these DWP funds would, at a minimum, make the city's planned rebuilding of its budgetary reserves over the next few years more difficult, if only because it would likely be starting from a weaker position.
(Excerpt) Read more at zerohedge.com ...
The march to socialism has left much "junk" in its wake.
The whole west coast should be declared junk status
“The loss of these DWP funds”
I liken it to a raid on the funds. It will only stave off things for a short while even if the got the funds as the underlying problems are still there.
Senor - where are my freebies? Can you not sell more bonds for me and my 10 children - we like Uncle Sam’s gifts to us?
LOL! -- Muchacho need taco. And education. And doctor appointment. And new home. And swimming pool.
Senor! Please offer a higher yield on those LA junk bonds. Those gringoes will buy them if they yield 10.75%.
Our 4500 sq ft home in the Inland Empire needs a bigger pool. Our Escalade needs nicer magnesium wheels too for our weekend trips to Santa Babara.
My poor babies need the newest Nike model shoes that just came out and each one of them needs a new iPad to learn the Englishe good I theenk.
Senor McCain said all my babies deserve a new iPad.
The sad thing is that in a few months they might not buy them at that yield.
OMG that pretty impression of LA Latino Lib LOL!
Good one ROFL
Being from SO CAL I tell you that scary impression LOL! very ACCURATE
Right, there aren’t any problems on the east coast /sarc
Is this the teetering of the first domino I see getting ready to take the whole United Dominoes of Amerika down with it?
Thankfully I live in the middle
AAA?
Los Angeles has the attitude of Greece,the population of Mexico and the sense of entitlement of a 16 year old girl.
That place is totaled.Lend them money and you’re not getting it back.They will use every legal trick they know to screw you over.
Then they’ll pat themselves on the back afterwards.
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