Chicago Outlook "Negative"
A bad year for Chicago with Rahm in charge and Standard and Poor hammering the bond ratings:
- Chicago’s looming pension crisis — and the $1 billion shortfall it creates in 2015 — has prompted Standard and Poor’s to change from stable to negative the outlook on Chicago’s A-plus general obligation bond rating.
In mid-July, Moody’s Investors ordered an unprecedented triple-drop in the city’s bond rating, citing Chicago’s “very large and growing” pension liabilities, “significant” debt service payments, “unrelenting public safety demands” and historic reluctance to raise local taxes that has continued under Mayor Rahm Emanuel.
Now, Standard and Poor’s has cited those same factors for its negative outlook on Chicago’s A-plus rating.
And the same questions arise about those lobbying for the downgrades are the ones supposedly in charge of "fixing" the mess.
Labels: money questions
posted by SCC at 12:01 AM
24 Comments:
Yep, whatever u do don't give into pension reform. Guys, we need it or we will get nothing.. Think about it
In normal circles Moody's and Standard & Poors would be sued for manipulating a government financial market perhaps even indicted.
F+ rating downgraded to an F- with interest rates at -4 percent and printing 85 billion a month just for the south side lmfao.
Trying to drive it down to
"REAM" the bond holders
As that one reader on here said then set up the infrastructure for privatization and skin
millions off the top.
Reluctance to raise local taxes my ass !
Those assholes must not live in Chicago.
[...]...Ty Fahner, president of the Civic Committee of the Commercial Club of Chicago, was claiming that he and his cohorts had been urging Wall Street agencies to downgrade the state’s credit ratings as a way to pressure lawmakers to slash pension benefits for current and retired public employees.
The story was broken in late July by Rich Miller on his capitolfax.com blog site, a must-read for anyone interested in what’s happening in state government and politics. Miller posted an Illinois Channel video of a Union League Club luncheon last March, at which Fahner said he and some of his Civic Committee colleagues contacted the rating agencies, saying, “How in the hell can you guys do this [maintain the state’s existing credit rating]? You are an enabler to let the state continue.”
Miller’s report drew calls for investigation from We Are One Illinois, a labor coalition working to protect public employee pensions but was ignored by virtually all the major media, save Illinois Public Radio.
Two weeks later, Fahner emailed Miller to say that he “misspoke,” and that no one connected with the Civic Committee had contacted the ratings agencies.
Still, the video speaks for itself — or rather, in it, Fahner speaks for himself. So was he lying to the luncheon audience? Maybe ... after all, why would a group of self-styled civic leaders try to drive down the state’s credit, resulting in higher interest rates that would end up costing taxpayers more to borrow money?
One plausible explanation: Unless pension benefits are gutted, Illinois might be forced to revamp its revenue structure to pay for them, including adopting the graduated income tax that tax reformers have long advocated. That would cost the generally well-heeled Commercial Club members big bucks, depending on the rate structure adopted. For example, using Wisconsin’s current graduated income tax with a 7.75 percent top marginal rate, someone with $1 million in taxable income would owe roughly $74,500, compared to $50,000 at Illinois’ flat rate.
A more sinister motive also suggests itself — forcing Illinois to pay higher interest rates to borrow, despite virtually no chance of default, means higher returns for those buying Illinois bonds, no doubt including some Civic Committee fat cats. Market manipulation, anyone?
What morphed the story from simply “amazing” at what the super-rich might do to protect or enhance their fortunes to the higher level of “unbelievable,” though, is the fact that Fahner also is a current partner and former chairman of Mayer Brown, the Chicago law firm that two years ago won a lucrative contract to serve as the state’s bond counsel.
So in essence, a partner of the law firm advising Illinois on its borrowing — for which it’s already been paid more than $1 million in fees and expenses — was simultaneously stabbing the state in the back by trying to crash its credit rating.
Breath-taking perfidy, even for Illinois, but also a good reminder that one should never, ever say, “Now I’ve seen it all!”
read the full piece -->> http://illinoisissues.uis.edu/archives/2013/08/ends.html
The sad part is Chicago has so much potential. Just look at all those empty factories that are owned by the city. I say give them away for free and you might see jobs will come back to the city.
Those vacant facrories are made of solid brick and can be of use to companies that make things like general electric, Boeing, 3d printing companies.
"historic reluctance to raise local taxes that has continued..."
What? My property taxes are up over $700 in a recession.
City sticker and State sticker cost are up. City tax is up, also tax on water, liquor, cigarettes, and now varying taxes on all food items. Water cost double what it was. Parking up ten times what it was, What reluctance are they referring to?
Emanuel took the latest Wall Street hit in stride by essentially saying, “I told you so”
That asshole needs to be bitch-slapped by a Girl Scout.
Detroit?
You ain't seen nuthin' yet.
Nonsense. The ballerino said it's all rainbows and unicorns. He would never lie.
The powers that be want to use the word BANKRUPTCY.
How about the historic reluctance to stop stealing and pissing money away on connected companies for bullshit like flower pots in the middle of streets that trap emergency vehicle and cost millions to maintain?
How about handing millions to gang bangers to "interrupt" violence? How about KNOWING you are violating the US Constitution with your anti-gun stance and responding that those who oppose you should just sue you so that you can piss away more tax dollars in court on indefensible cases?
How about selling buildings to connected individuals for ONE FUCKING DOLLAR? How about paying $300 per sign for a bullshit safe passage show and $15 per hour for people to stand around on that passage just to showcase that you lost control of your own city?
I am not a financial expert, but it has been said that the powers that be are manipulating the bond ratings to stick it to us. Could this be true?
I guess all those retired guys checks gonna end. Can I just cash out and invest my money myself?
guess I better get out of the Chicago blended fixed funds
Chicago isn't broke look at Maggie Daley park
That is why I am taking a proactive approach. I signed up for the Sergeant's test. Now, all I have to do is get promoted to Sergeant and I will get Sergeant's pay. I am a doer, I take a proactive approach, and I have positive attitude. I already bought a Management book at Barnes and Noble. And, because I have a positive attitude, I already bought my Sergeant's uniform.
Good south side comment. Funny. However Rahm is a north sider.
I am currently on furlough in Europe. I saw that 20,000 workers in Poland protested against any cut in their pensions. You think we could get together with other unions and do the same against the "little dictator"?
Negative outlook
From: Ted Dabrowski tdabrowski@illinoispolicy.orghide
Tue, Sep 17, 2013 2:12 pm
While all eyes are focused on a solution for Illinois’ state-run pension systems, Chicago’s own debt crisis is looming.
Chicago taxpayers are on the hook for more than $63 billion in pension, health insurance and other debt. That’s the total debt of the city and its sister governments, as well as Chicagoans' share of Cook County debt.
In total, each Chicago household is on the hook for more than $61,000.
Chicago’s pension crisis isn’t new, but Detroit’s bankruptcy has brought national attention to Chicago’s growing crisis. Just a day after Detroit filed for bankruptcy, Moody’s Investors Service downgraded Chicago’s debt by a rare three notches. Chicago is now just four notches away from junk-bond status — and any further downgrades mean the city could face problems borrowing money.
Standard & Poor’s Rating Services followed late last week by threatening its next downgrade. It placed the city’s debt on a “negative outlook.”
Without pension reform, Chicago Mayor Rahm Emanuel will be forced to raise taxes or dramatically cut government services.
Emanuel knows he can’t raise taxes. Chicago has lost more than 200,000 residents in the last decade and the city’s population is lower now than it was in the 1920s. America's slowest-growing major city can’t afford to chase away even more taxpayers.
To make matters worse, Chicago’s services are already faltering. Chicago Public Schools closed nearly 50 schools this year, forcing children and families to travel across gang lines. Nearly 3,000 school employees have been laid off. And the city’s crime rate is among the worst in the nation.
Higher taxes, taxpayer flight and an inability to provide core services contributed to Detroit's demise — and it’s a trend that Chicago must reverse.
Fixing Chicago's pension crisis will require help from Springfield. Lawmakers need to follow the lead of the private sector and move all workers to 401(k)-style plans for all work going forward — an idea that Emanuel supports as an option for the city's new hires.
Ted Dabrowski
Vice President of Policy
P.S. View the full report — The hidden bill: Chicago taxpayers and the looming crisis:
http://illinoispolicy.us1.list-manage.com/track/click?u=7fe208d3c85ffa1d03aeaade4&id=38929eaae5&e=70d3f64f32
In normal circles Moody's and Standard & Poors would be sued for manipulating a government financial market perhaps even indicted.
9/17/2013 12:33:00 AM
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No, you have it exactly ass-backwards, son. The manipulation and false assessments done by the financial ratings agencies were going on before the crash of 2008 when they gave AAA ratings to worthless derivatives and gimmicks peddled by Wall Street firms. In fact, that’s in good part what CAUSED the crash. Read Michael Lewis’ The Big Short and you’ll understand this.
The ratings agencies are currently very nervous about lawsuits being brought by people and companies who understandably have the lingering impression that they are incompetent or corrupt, and that their ratings are bogus. Because they are nervous and understand that they are being watched very closely, the ratings agencies are now doing their jobs and issuing their ratings very, very carefully. As a result, the current ratings are now more honest than any of the recent past.
The ratings for Chicago and Illinois will continue to drop because we’re in a financial mess that no one is stepping up to fix, not because of a wild conspiracy between the ratings agencies and short-sellers.
Anonymous Anonymous said...
I am currently on furlough in Europe. I saw that 20,000 workers in Poland protested against any cut in their pensions. You think we could get together with other unions and do the same against the "little dictator"?
No your not, you just woke up on the northwest side
Rham=shit for brains.
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