Posted on 06/30/2015 10:35:36 AM PDT by Mariner
When Chicago Public Schools announced on June 24 that it would borrow $1 billion to make a $600 million-plus pension payment due June 30 an eerie feeling spread across bond investors and taxpayers alike.
It was the same feeling that gripped investors when Moody’s Investors Service downgraded Chicago’s credit rating to junk based almost entirely on the city’s pension problems.
The fear was that elevated pension costs, in cities like Chicago, might push these public entities into insolvency, wiping out much of the holdings of municipal-bond investors.
Once a sleepy corner of the municipal bond market — often not even properly reflected on cities’ balance sheets — public pensions have recently turned into the biggest headache for taxpayers and municipal-bond investors, threatening to bring down the finances of U.S. cities and states.
(Excerpt) Read more at marketwatch.com ...
Anyone who buys municipal bonds is stupid. Investors may think they are funding roads, but they are really funding $300,000 pensions for workers who retire at 50.
Re The next Greece may be the US.
Why not? The people are Hungary for change but we are ruled by a Turkey whose wife buys Red China for the White House.
Also, most of Congress has the intelligence of a Brazil nut in Chile sauce.
I think I’ll skip eating for a while.
Thanks, Liberals!
The Chicago school district borrowed $400 Million MORE than it needed to make a one-time payment of $600 million?
I’m confused. I mean, I understand that we’re screwed, but I’m still confused...
The difference is, Greece can’t print euros.
We can print dollars.
Our fate is hyperinflation rather than default.
“...it would borrow $1 billion to make a $600 million-plus pension payment due June 30 ...”
I don’t always borrow money, but when I do... I borrow $400 million more than I actually need.
Baby needs a new pair of shoes.
They ALSO issued new Pension Obligation Bonds backed by no collateral and no revenue stream.
Nothing but a wink and a promise.
Bond Insurers are starting to see their exposure.
And it's $ trillions.
10's of trillions.
I’ve also seen some rumors they plan to transfer ownership of large tracts of land to US bond holders. Essentially China would take over California.
I think they’d be more likely to pay off the Chinese (and us other bondholders!) in funny money.
Plus, the illegals wouldn’t like losing California.
I do think that there may be a plan being worked on to reorganize the pension system in Chicago, the one that is causing problems in Illinois.
All that means is that the pensions will get funded and the bond holders get screwed.
Their goal is to destroy the US. Thats why I think this could be real.
Buying large chunks of U.S. real estate didn't work out too well for the Japanese in the 1980s, when we had a large trade deficit with them. Much of it was eventually sold at a steep discount from the original purchase price.
Well, somebody is buying these bonds.
That “somebody” made a commission buying those bonds.
Does that person pay up when the bond is no good?
I’m sorry, but we are going to have to start hanging thieves in this country. There are too many of them and they aren’t afraid of going to jail.
That would be all Union members from stage hands to teachers to federal employees....all on some pension plan. Firemen, military, police, to pilots also on a pension plan. Early retirement and government programs for those (8.7 million) not working and the government programs for illegals coming in daily to our nation. Look into a mirror Americans to see Greece.
In a nut shell, politicians wanting your vote and the government largess on the tax payer dime got us into this bind.
You don’t understand.
COMMON CORE MATH !!!!! LOL
Torches were lit. Pitch forks were polished. The citizens descended on city councils in both Pocatello and Chubbuck. The issue was forced to a vote. When it was over, the voters rejected the bond with a 72% NO vote.
“In the bankruptcies of Detroit, Vallejo, Stockton and San Bernardino, bondholders have faced losses of up to 99% of their holdings, according to a Moody’s report dated May 18. Meanwhile all three California cities chose to preserve full pensions for their employees, while Detroit only cut pensions by approximately 18%.”
Both Vallejo and Stockton will be back in bankruptcy soon. Their “bankruptcies” were an “innovative” way to kick the can down the road again, but the can is too bent up to go very far. Until city councils understand that they are there to serve the citizen taxpayers and not “their employees,” these bankruptcies are simply pi$$ing into the wind.
The Illinois State Constitution needs to be amended to really address the pension problem in Illinois it seems?
http://will.illinois.edu/legalissuesinthenews/program/illinois-pension-system-and-changing-the-states-constitution
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