Credit Rating Spanked Again
- Chicago’s financial standing took a hit Tuesday when a major bond rating agency once again downgraded the city’s credit worthiness because of a huge government worker pension shortfall and the overall amount of money it owes.
Moody’s Investor Service rated the city’s upcoming $388 million bond issuance at Baa1, down from A3, a level set last year after an unusual triple downgrade. The new rating is still investment grade, but puts the city on a lower tier. Moody’s also gave the city a “negative outlook.”
The move could end up costing Mayor Rahm Emanuel’s administration more to borrow money. Two other major agencies earlier had maintained their existing Chicago debt ratings for the upcoming city bond issue, but Moody’s move could raise interest rates if it reduces investor confidence in the city’s ability to make the required repayments.
We think we see part of the problems there - that word...."borrowing." That has a lot of negative connotations. The bond rating is working its way downward through the alphabet, approaching the "D" rating - Detroit, and that won't be good at all.
Labels: money questions
posted by SCC at 12:03 AM
49 Comments:
Can someone ask, Please, Union maybe? Why is it that we (persons promised a pension) are the problem and not the Billions spent on...Ohare, Depaul, New Hotel, Superbowl at Soldiers field, CTA blue line, a park, closing then building new schools,and millions paid on lawsuits that are winnable????????? Why is it that our union, and ALL unions are not educating the population????? HELLO MEDIA!!!!!!!!
Someone should sue Moody's investment does anyone else believe that it's a conspiracy by Rahm and Moody's to force and scare everyone into pension changes
Thanks for the post. Very scary.
Our city spends money like someone on a link card... Flashy clothes, shoes, hair and nails, cars with rims and sounds, all the while living in a dingy bug infested apartment sponsored by the government.
done on purpose to claim broke when its time to pay us and into our pensions. its all a big sham. who believes this isn't a behind the scenes set up.
Sorry to say it but the only way to fix state and city budget mess is to slash payroll. 20% RIF.
That's about 8,000 city workers and 12,000 state workers. Keep raising fees and taxes will only excelarate exodus.
In Chicago credit rating hikes and drops are ALL political to support a particular agenda.
Meanwhile we just gave 1 billion in aid to Ukraine...
"Moody’s Investor Service rated the city’s upcoming $388 million bond issuance at Baa1..."
"Baa" is right...the sound of the sheep that continue to vote for incompetent politicians that got us into this mess.
rb
How does Rahm deal with this?
Why he goes out and borrows another BILLION dollars and refuses to spend any of it on the city's existing debt( pensions etc.)
Nope the lions share of this Monopoly money will be spent on Rahm's pet projects and interests. He's looking out for the taxpayers huh??
Only in the real world is endless borrowing bad. Liberals do not live in the real world.
We have already been on the road to Detroit for some time now.
Anonymous Anonymous said...
Meanwhile we just gave 1 billion in aid to Ukraine...
3/05/2014 02:42:00 AM
Loan guarantees
Once again money for everything but pensions, hello media!
Love how they keep blaming it on pensions. Not false promises, not the "gold braid" gifts for friends and family, not the old Illinois legislature switcheroo that allowed politicians to dip as much as they could. Nope, it you guys, the little guys who actually do the work. You are the problem. Not the liars and thieves who talked out of both sides of their mouths and reached with both hands into every pocket.
Sorry to say it but the only way to fix state and city budget mess is to slash payroll. 20% RIF.
That's about 8,000 city workers and 12,000 state workers. Keep raising fees and taxes will only excelarate exodus.
3/05/2014 12:51:00 AM
Exactly right. People, jobs, and tax revenue are flowing out of IL. Who will be left to pay for our pension?
Lets get ahead of the curve and get some guarantees in exchange for capping pensions at 3 times max social security. If it wasn't for the abuses and the higher ups, the problem would not be nearly as bad
It's no conspiracy, there is no money and Rahm just borrowed another billion with no real way to pay it back. Therefore the rating was dropped.
On the news last night the talking head said that the other bond rating services didn't agree with that rating? Who do you suppose got to who to put the fix in? Gotta make everything a big drama! Just think of the children....
Were going to make it!
Contrary to popular belief, the ratings issued by the Moody's, S & P, and Fitch are now the most honest in history. This is because the memory of the mortgage securities disaster is still fresh in everyone's minds. The agencies got sued for the dishonest "AAA" ratings they applied freely to bonds that should've been rated junk, and they don't want to get sued again. Read The Big Short by Michael Lewis. I recommend it highly.
The reason the credit ratings have been lowered is because Daley and Emanuel spent more money than the city took in. That simple.
For all his stupidity, Daley knew the real depth of the problem and jumped ship.
Like Illinois, Chicago is in a death spiral.
There is a simple answer. Higher taxes. It is time that the wealthy and the rich corporations and banks pay their fair share. Just tax anyone that makes over $50K a year at the 75% rate. It's not fair that some make and keep all their money while others have nothing. Chicago's own president said on the campaign trail, It's time we take from those that have too much and give to those that have little or nothing. Property owners should also be paying higher property taxes.
Rahm loves this shit!
The banks who donate all that free money to The Rahmulians PET projects also lend money.
If the city needs cash the banks now charge more interest.
The banks also hold all that TIF cash which can't be used by law!
And all those elected officials chirp about pension stealing your children future.
The super Bowl will solve it all just like a De Paul stadium or A Obama museum in the ghetto.
Someone should sue Moody's investment does anyone else believe that it's a conspiracy by Rahm and Moody's to force and scare everyone into pension changes
Yes it is, and Rahm is loving it. It looks better for him if others are saying it is pension obligations that are keeping our city down. He will do anything in order to welch out of paying the court ordered payment due. He needs that money to build his legacy, just like King Richard did.
After we slash all the pensions everything will be wonderful. We will be able to keep the entitlement programs floating thus ensuring that our democratic candidates get reelected. All the greedy Police and Firemen will be fine living on cat and dog food, plus they can apply for a link card as well. Oh Happy Day!!!
Dark days are coming my friends, be prepared and keep your powder dry.
Stop it. I need things. Pony up taxpayers.
I am obviously not a Financial Guru, but I have the question. If the extra money the city is now going to have to pay to Bond Holders was put toward the Pension Problem? How much closer to solving the problem would we have been.
I really hope you officers are putting away VRI, etc money because honestly - do you trust the city to actually have that money when it comes time to pay? I'm planning on not having my pension and SSI, so I'm socking away money.
If taxes go up, I'm out of Illinois, and I won't be alone.
Perhaps rahm can ask obummer to have holder lean on moody's like he did S&P.
Let me see if I got this wrong but 24 hours before the CNN special on City of Chicago Series airs.....We are downgraded to just a sliver away from junk bond rating and our pensions are blamed while multimillions are spent and planned to be spent on domed Bears stadium and new DePaul private University basketball stadium by McCormick place and still the Maggie Daley Park fiasco....just to name a few of the wasted pension fund dollars. Rahm has nothing for taxpayers in city but plenty for his political buddyboys! He makes Michele O look good for kicking his ass out of Washington, he should have gone back to the suburbs from which he came. He doesn't have a clue how badly he 's breaking the backbone of taxpayers and or he doesn't give a damn, God help the cloutless little city workers who are not entitled to social security due to their contracted public pensions. Hang on we are in the fight of our lives. retired and modest pension! Tune in to Mar 6th CNN special and see which way the media blows us nationwide
i don't know why anyone is working.
when push comes to shove you know that the bondholders and stockholders that took the risk of investing in this rigged economy, the sit on their asses and do-nothing non-producing wall street investors will be the ones made whole with a bailout.
yep, if it takes every last dime from actual workers soc-sec, pensions, ira's, 401k's, wages, etc.. to pay the bondholders back, do it.
the workers didn't take the risk why should they lose their earnings. their savings.
leadership are working on the weasel words in the laws and are busy creating the crisis to use as tools to transfer the wealth as i type.
wall street companies are doing it already. workers aren't getting raises. the people actually doing the work aren't climbing up the social-econ ladder.
when there's a choice on who should be financially rewarded it's the do-nothing lazy-ass shareholders and bondholders.
why work. there's no future in it. no job security. tax and spend.
borrow and when the bill comes in give the taxpayers the dumb deer in the headlights face then shout look at this debt..we must pay the debt or we all are going to die/
fact is as long as the fed can print money. pick and choose which companies get the free hand out there is no reason to create jobs or hire anyone.
they don't need you.
productivity doesn't matter because you can just go the the fed's fishbowl of cash and grab another fist full.
they don't need you. they don't need workers.
grab a fist full of cash and play the rigged wall street casino if you need money.
f--k this work and earn shit. the ivy-league crowd isn't producing anything of value.
That sound you hear is Chicago being flushed down the toilet!
This city is the next Detroit!
What more proof is there when finance companies do NOT like the business climate here and downgrade our credit rating!
Junk bond status? Right above Detroit and Puerto Rico!
Get out of Illinois now!
Say good-bye to Pensions in Illinois!
Portable Government 401k's for all new hires!
No more 30 year employees either! You may as well, put revolving doors in all government buildings as long term employees will be a thing of the past! Nobody is going to retire from government!
You heard it here first!
Thats what happens when you dont pay your bills.
Rahm, like his mentor the Messiah, have maxed out every govmint credit card and have yet to stop spending.
Chicago’s credit rating downgrade does not bother me. Chicago is lead by none other than rahm emanuel. He knows a lot about making money, cost cutting and media manipulation. After leaving the Clinton administration, dual-national rahm joined Wall Street investment banking powerhouse of Wasserstein, Perella & Co. making the living wage of 18.5 million dollars in just 2 ½ years. Bruce Wasserstein from this firm was a big contributor to dems and Clinton. What a coincidence that this firm took rahm under their wings providing much needed sustenance despite the fact rahm had no prior experience in finance nor banking. Rahm was once a paid board member in the failed C.H.A. He was also a paid board member of Freddie Mac during the housing boondoggle, the eventual housing meltdown and financial crisis which was conveniently blamed on someone else. On a local front, rahm was a lead negotiator on the merger of Commonwealth Edison & Unicom Corp. This cost cutting merger resulted in slashing and hatcheting 3,350 good- paying middle class jobs or a 10% reduction in its workforce. Rahm was compensated generously forever changing the lives 3,350 American families putting the corporate bottom line or corporate profits ahead of the so many average Joe type careers. Rahm is a monetary scheister with too many financial wheelings and dealings to mention. Rahm, a one percenter in charge of a major American city with unprecedented record levels of African-American youth unemployment, is rumored to have friends in high levels of government. Moody’s Investor Services may receive an IRS audit from Lois Lerner much like people who question and challenge government. Administrative law enforcement from federal regulating agencies focused on increased government scrutiny may be on their horizon. Moody’s lobbyists may get the cold shoulder when advancing legislation favorable to their firm or be denied the opportunity to contribute monies to so many elected representative’s personal political campaign lockboxes in D.C. Rahm is that type of guy who may advise/influence those writing the laws in Washington D.C. to forgo taking campaign money from the identified blacklisted Wall Street credit rating service denying them a voice in the federal government's pay for play scheme, in essence giving them a spanking, shutting them out of their self-serving legislative interest processes and sending them to the back of the political influence bus making it crystal clear not to embarrass a powerful democrat in the president’s political fiefdom. Rahm knows money, punishing adversaries, misuse of government powers and political influence. Rahm is sly, crafty and calculated. He knows how to put the hurt on those who cross, block his agenda or embarrass him and put the blame or a case on someone else and then effectively market this message to the masses.
shitcago values
Beware Moody’s for you have stirred up a financial hornet’s nest in the tiny dancer’s socialist republic. Remember when Standard & Poor’s along with Fitch Ratings lowered the U.S. credit rating score? The heavy hand of government used persuasion to have S & P “correct” the rating on advice from the Federal Reserve. The Fed cited proposed, never realized fiscal cuts along with the elusive “timely and effective action” to boost the economy as a rationale for the correction. Rahm has a collective well-placed sphere of influence in the federal courts, assorted financial regulating agencies, government officials pulling the strings for granting corporate tax incentives/tax loopholes, the congress, the executive branch, the media, the extreme left leaning lapdog academics and the Federal Reserve. These entities in concert can put a full court press to pressure Moody’s to reconsider those failing marks on the city’s financial report card. Bad,bad rahm. If the city’s bills and obligations to the pension funds were both honored in a timely fashion, this would not have morphed into this quagmire. Time to audit rahm’s and the 50 thieve’s reckless spending and credit card binge being paid for by the working class, their children and their children’s children. How will this credit crisis be spun and not allowed to go to waste? Who will be paraded in the media on orders from this administration as the fiscal boogeymen? Too bad this didn’t come to light sooner so we could have hung this fiscal crisis, this calamity around rahm’s pencil neck like an anchor prior to his Excellency taking his polar plunge. Moody’s should have factored in those soon to be not yet realized future revenue generating/enhancement efforts waged on the middle class by the party of the middle class. Or could this all be a deception and public relations stunt by rahm to gin up support against public pensions?
Say good-bye to Pensions in Illinois!
Portable Government 401k's for all new hires!
No more 30 year employees either! You may as well, put revolving doors in all government buildings as long term employees will be a thing of the past! Nobody is going to retire from government!
You heard it here first!
3/05/2014 01:47:00 PM
Yep and an asteroid is going to hit Chicago tonight.
Anonymous said...
There is a simple answer. Higher taxes. It is time that the wealthy and the rich corporations and banks pay their fair share. Just tax anyone that makes over $50K a year at the 75% rate. It's not fair that some make and keep all their money while others have nothing. Chicago's own president said on the campaign trail, It's time we take from those that have too much and give to those that have little or nothing. Property owners should also be paying higher property taxes.
3/05/2014 08:11:00 AM
Hey, we already pay big bucks for the bottom feeders, so lighten up a bit on the tax hike.
--No Cop Here
So I just checked the ten worst cities for bond ratings, and every one of them have democrats in charge! Spending liberals with NO sense of a balanced budget. Check the FACTS
There is a simple answer. Higher taxes. It is time that the wealthy and the rich corporations and banks pay their fair share. Just tax anyone that makes over $50K a year at the 75% rate. It's not fair that some make and keep all their money while others have nothing. Chicago's own president said on the campaign trail, It's time we take from those that have too much and give to those that have little or nothing. Property owners should also be paying higher property taxes.
3/05/2014 08:11:00 AM
*******************************************
Great ideas there, Mr Socialist.
You think raising property taxes is a good idea?
News flash for you pal: Landlords don't pay taxes, tenants do. Landlords just get the bill, and pass the expense along to you.
If property taxes skyrocket, your rent will skyrocket, moron.
Typical liberal; born without a math gene.
Signed,
Your Landlord.
Want to know why Rahm has money to upgrade Soldier Field and Madigan has $100 MIL to build a library we don't need, for a President nobody likes, but ain't got no money for the pensions?
That's easy.
Both are skim-able and scam-able. Plenty of construction contracts means plenty of campaign kickbacks from contractors.
Paying the pension that was contractually PROMISED? Hey, there ain't no percentage in THAT.
Bastards.
Second worse credit rating next to Detroit.
Makes me proud to vote Democrat.
The credit rating will return to normal after a pension plan is put into place. The poweres need to talk with the city and at least get them to pay half the money's owed and get them on a payment plan.
Anonymous said...
Anonymous Anonymous said...
Meanwhile we just gave 1 billion in aid to Ukraine...
3/05/2014 02:42:00 AM
Loan guarantees
3/05/2014 05:03:00 AM
They're on the brink of being invaded and possible war do you really think they're not going to default?
Wasn't it Moody, Standard & Poor,s and Fitch that got caught rating junk paper triple A, Which was responsible for this latest recession.
Can,t you all see that Rahm is using all his connections at wall street to make it like like Chicago is in a crisis to avoid pension obligations.
These rating agencies made tons of money giving worthless paper triple A ratings so......I asking why in the hell are you believing anything these rating agencies are putting out.
This smells of another one of Rahm's tricks.
WAKE UP PEOPLE!!!!!!!!!!!!!!!!!!
0037.
The future of Chicago!
http://voices.suntimes.com/business-2/boeing-ending-its-pension-plans/
Don't get me wrong in saying this, but the lower the rating Chicago receives may just lead to less money that can be borrowed....eventually! No one wants bad credit and yes it can affect many other things besides borrowing, but it could just be a blessing in disguise! At least until until Rahm, democrats and Obama and his cronies are booted!
And why is it every freaking Dems answer is borrow more, tax rich , corporations, property owners and eventually anyone who is willing to work?! Lower the taxes! Cancel corporate taxes, kill Obama-care! Do that and we will end most financial issues very quickly, probably faster than anyone can imagine! And I will bet those pensions could be honored too!
Just raise taxes. No problem
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