Almost Junk
- Chicago had its credit rating cut to the lowest investment grade by Fitch Ratings after the Illinois Supreme Court tossed out Mayor Rahm Emanuel's plan for dealing with the mounting debt to its workers' pension plans.
The two-step downgrade on Monday to BBB-, one rank above junk, affected $9.8 billion of general-obligation bonds and $486 million of debt backed by sales taxes. The company said the outlook is negative, indicating that the rating could be lowered further.
The step follows the March 24 decision by the state's top court to strike down Emanuel's plan, which required the city and employees to boost contributions to the municipal and laborers retirement funds and cut future cost-of-living increases. The court ruled that it violated safeguards to public pensions enshrined in Illinois's constitution, illustrating the difficulty Chicago faces in reducing a $20 billion shortfall in its retirement funds.
If only someone would tell Rahm to stop spending money on the unnecessary trinkets and excess construction while concentrating on vital infrastructure and broadening the actual tax base, things might start to bend upward....or at least slow the descent.
Labels: money questions
posted by SCC at 12:01 AM
30 Comments:
Wow. Well, you can't blame that one on Rauner.
This is the culmination of decades worth of "leadership" by Chicago Democrats. Thank you, Mike Madigan, Daley family and friends. Junk status coming shortly.
Thankfully, Rauner is in Springfield and may be able to stave off a similar end result from hitting the state... just barely, if we are lucky.
You can't explain fiscal responsibility to a democrat. It's not in their lexicon.
This is the way Detroit happened. Thankfully Chicago is to big to fail. The feds will step in and taxpayers from out of state will save Chicago.
Forget Chiraq, they will be filming The Big Short II here.
(Selling Junk Bonds - for those who did not see the movie, or read the book.)
An economic graduate course that should be taught at the University of Chicago, "How Democrats Economically Run a City Into the Ground". The first part of the course will focus on the politics of the city from the mid 1920s to present day. The second part of the course will target financial/economic decision making, its impact on the city finances, wasteful spending, neglect of financial obligations and how the burden of taxation impacts business and citizens. The last part of the course will tie both politics and poor financial/economic decision making together. What better place to teach this course than the U of C where the first nuclear chain reaction occurred. Explosion of the atom, explosion of a city.
Don't worry, most of the bonds will end up as CPD Pension Fund assets.
They'll have a great yield, right up to the time they default, and the pensions stop getting paid.
Wait until they do a leaseback of the beat cars, fire trucks, the precinct houses and fire stations.
Then you will know they finished busting out the city, and they are all about to flee to someplace without extradition.
Rahm's priorities have been screwed up ever since he started running for mayor.
You can't expect a Zebra to change its stripes now.
He's a cocky, condescending asshole who does whatever he wants whenever he wants. Yet the Sheeple keep voting for assholes like him and Rauner.
The looting of the treasury is always the last act of tyrants. The people who run this city aren't going to waist money that could go to connected folks on something silly like fixing workers pensions. The pension problem will fix itself in about 6 years. When the fund goes bust the scared and desperate workers & retirees will accept pennies on the dollar and like it.
Good luck.
SCC - you are smokin' hot tonight!!!
Slow the descent? His spending has put us in a free fall.
Most currency exchanges won't cash city checks anymore because of it.
Safe Passage signs at $300 each, Safe Passage crossing guards at hourly rate, bicycle lanes put in to choke traffic, pedestrian crossing signs put in the middle of the street to be hit and turn into metal spikes to damage your cars, money for DePaul to build a stadium, PAYING FOR ALL THE SHOOTING VICTIMS' MEDICAL CARE, paying for a failure of a public school system.
How much more do you want to pay, Chicago? Still voting for the same criminal democrat socialists? Still not willing to try another party? You get the government you deserve.
According to Lefty Rosenthal in "Casino", the new Vegas was built on junk bonds. What's the problem?
The Daley-Emanuel Death Spiral
Corrupt politicians spend tax dollars on themselves and their friends' pet projects, neglect the pension funds.
Pensions go into arrears and more money has to be raised. Politicians squeeze the middle class for money.
Taxpayers begin to move out due to high taxes.
Corrupt politicians spend more tax dollars on themselves and their friends' pet projects, neglect the pension funds.
Ratings agencies warn of future shortfalls.
Outflow of money accelerates because politicans are too stupid and corrupt to heed debt warnings. Ratings lowered on city debt which causes interest rate for city to rise when it borrows money.
More taxpayers move out.
City has to raise taxes again and borrow money at higher interest rates just to pay for basic functions.
More taxpayers move out. More neighborhoods looking distressed.
Ratings lowered again as politicians take no steps to save money or pay down debt.
Taxes raised again. More taxpayers move out.
Ratings lowered to junk.
Middle class decimated as more taxpayers leave. Only people who can afford to stay are the rich and poor.
…...repeat until Chicago = Detroit.
Decades of uninterrupted Democratic mayoral administrations, and this is exactly what you get.
If it wasn't for the support of the minority communities, bought and paid for with pilfered pension dollars, the Democrats would never be in power.
Want to see your pension get flushed in a bankruptcy proceeding?
Then just keep voting Democrat.
Call the next case. Not a cop.
When city property taxes rise again in 2 yrs the only ones left will be pockets of city workers building walls [torture] to protect them from the gangs....hello detroit!
Speaking of money, you guys will love this idea: "Cities begin to challenge a bedrock of justice: They’re paying criminals not to kill" From the Washington Post: https://www.washingtonpost.com/local/dc-politics/cities-have-begun-to-challenge-a-bedrock-of-american-justice-theyre-paying-criminals-not-to-kill/2016/03/26/f25a6b9c-e9fc-11e5-a6f3-21ccdbc5f74e_story.html?tid=sm_tw
How much will the south side version of The 606 cost? $100,000,000 or so? How much for the riverfront bike trail? The Ashland bus lanes? Is he counting on the casino going into the old Post Office?
Quit pissing away money!!
I would buy Enron bonds before I spent a buck on Chicago municipal bonds. Yes sir Mr Madoff, what, you wouldn't touch those Chicago bonds either? Why am I not shocked?
I have a solution. Stop spending money that you don't have.
Anonymous said...
Wait until they do a leaseback of the beat cars, fire trucks, the precinct houses and fire stations.
Then you will know they finished busting out the city, and they are all about to flee to someplace without extradition.
3/29/2016 02:57:00 AM
Look at some of the streets and san vehicles,many have out of state plates no city stickers, because they are being leased from out of state, guess they cannot even spend the money in this corrupt city/state/county! doj is here come on now the real criminals city haul,crook county building,state of il buildings come on pull back the curtain so easy to find,and bag!
You can quit whining about your pensions because as long as there are suckers living in Chicago, those taxpayers will be responsible for making you "whole" as they say per the Supreme Court. So please stop whining.
Rahm was placed here to crash everything, just like jug ears was put in place to do the same on a national level. Who the hell can claim residency on the basis of a dress left in a former residence? The fix was in like it was with jug ears' two "elections."
.........When the fund goes bust the scared and desperate workers & retirees will accept pennies on the dollar and like it.............
.........Want to see your pension get flushed in a bankruptcy proceeding?...............
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HEY - I have been saying these things for a couple of years here now.
You can only play with money you don't have for only so long.
"Cities begin to challenge a bedrock of justice: They’re paying criminals not to kill"
3/29/2016 08:16:00 AM
Kind of ties in with that new weird idea going around.
"Do yo' job! Lock his a_s up before he get killed up in here!"
Rahm could not care less.
He's pushing his agendas and then will ride off into the sunset to enjoy his ill gotten millions while the city crumbles.
Anonymous IN THE KNOW said...
.........When the fund goes bust the scared and desperate workers & retirees will accept pennies on the dollar and like it.............
.........Want to see your pension get flushed in a bankruptcy proceeding?...............
----------------------------------------
HEY - I have been saying these things for a couple of years here now.
You can only play with money you don't have for only so long.
3/30/2016 02:23:00 AM
It would not be "flushed" Detriot coppers got their pensions, but then again would rahm and his crew allow the books to be subject to a forensic federal audit? Don't forget the city still has assets to sell off many airports,bike lanes,trails,maggie daley park, many parks, soldier field the trillions we could have, maybe a fully funded pension and rahm and the crew in shackles now that would be "change we did believe in!"
People don't like coppers yet the real criminals are on Wall St., hedge funds and your friendly bankers. And EVERY presidential candidate is bank rolled by ill gotten gains. Yeah even Trump. The country is run by WHORES and I apologize for giving legitimate whores a bad name. ♠️
I would over spend on everything and anything as well if it weren't my money.
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