How Stupid are Californians?

[4est_4est_Gump]

Stockton’s Racket — And Ours
Kevin D. Williamson, NRO
April 3, 2013

Words of wisdom from an investment adviser: When it comes to municipal bonds, the ones you want you can’t get, and the ones you can get you don’t want.

Assured Guaranty and other large holders of bonds issued by the city of Stockton, Calif., got a sharp reminder of that on Monday when a federal judge ruled that the city was entitled to file bankruptcy under federal law to gain protection from bondholders and other creditors. The bondholders’ suit was probably never going to stand up: The city is plainly insolvent. Faced with a choice between screwing its bondholders and reneging on the pension benefits it owes to union goons, Stockton’s leaders clearly calculated that at this point they have little to lose by shortchanging bondholders — its credit rating is already so low that it’d have a hard time financing a used Hyundai with $5,000 down — and that while creditors may sue, complain, and caterwaul, they do not get to vote. Moody’s responded by downgrading the credit on the pension-obligation bonds of nearby Solano County.

Pension-obligation bonds fall under a special class of idiocy. Municipalities with large unfunded liabilities for employee pensions wipe those obligations off the books by selling municipal bonds, investing the proceeds in stocks or other investments in hopes of earning a spread that will make the whole thing work out for them. Noted bond speculator Jon Corzine once called the maneuver “the dumbest idea I ever heard.” Make a note: Too stupid for Jon Corzine is a rarified kind of stupid.

...

Some investment professionals have suggested to me that bondholders are fools for entrusting their money to the likes of Stockton and San Bernardino. I agree. But the bondholders at least had a choice in the matter. If they’re fools, what does that make taxpayers?

 

[RobDownSouth]

Good morning, Chief.

 

[4est_4est_Gump]

Just like the GM Bondholders...

 

[RobDownSouth]

Got something original to share, chief? didn't think so....

 

[Wat_Tyler]

It's what's for breakfast:

 

[4est_4est_Gump]

He's on a Mission from Gawd!
He must prove who Democrats are!

 

[Wat_Tyler]

Deserve's got everything to do with it.

 

[4est_4est_Gump]

Hey Throb,
You gonna shoot us another one of your
hollow-point bullet proof facts?
Or are you just hateful, angry rhetoric?
One of Dem inspirational and motivational speakers?


http://forum.literotica.com/showthread.php?t=745068​

 

[Wat_Tyler]

 

[4est_4est_Gump]

... and now, for a classic interlude...

I bitched about Bush for six years, and through all that time the Republicans on this board never trashed me the way the Democrats do now that "their guy" is "in charge."

They were angry when Bush was President, but they seem even more angry now that Obama is President.

Maybe it's just disappointment.

Maybe, it's who they really are and have been all along.
A_J, the Wiser

 

[Wat_Tyler]

No! No!!!! Let me finish shitting first, for Gawd's sake!!!

 

[RobDownSouth]

Yo, chief! Refresh my memory here....why is it not racist when you say this...

I call him a nigger all the time. It's funny to watch him turn purple and start spitting...

but when I refer to your pretend "daughter" as a RentAGook™,

that....That...THAT'S RACIST!

Bit of a double standard, no?

 

[4est_4est_Gump]

I'm ThrobDownSouth!
Prepare for my demise!

 

[Ishmael]

Stockton isn't going to be the last. US States and Municipalities have consistently underfunded their retirement accounts, 35-39%, and have just as consistently overestimated their annual returns, approx. 7.5%. This particular method of book cooking isn't restricted to Stockton, it's a nationwide scheme.

The courts and the city can do as they will, for whatever reasons they can rationalize, but only a few more shoes dropping will change the nature of 'Munnies' for long into the foreseeable future. Interest rates on bonds will become prohibitively high and the municipalities are going to find themselves severely cash strapped, or no cash at all, when it comes to funding civic infrastructure improvements. No one is going to invest because the bonds themselves will be bordering on junk bond status. The chickens are indeed coming home to roost.

Ishmael

 

[4est_4est_Gump]

Stockton isn't going to be the last. US States and Municipalities have consistently underfunded their retirement accounts, 35-39%, and have just as consistently overestimated their annual returns, approx. 7.5%. This particular method of book cooking isn't restricted to Stockton, it's a nationwide scheme.

The courts and the city can do as they will, for whatever reasons they can rationalize, but only a few more shoes dropping will change the nature of 'Munnies' for long into the foreseeable future. Interest rates on bonds will become prohibitively high and the municipalities are going to find themselves severely cash strapped, or no cash at all, when it comes to funding civic infrastructure improvements. No one is going to invest because the bonds themselves will be bordering on junk bond status. The chickens are indeed coming home to roost.

Ishmael

Tomorrow was always going to be better thanks to their policies.

A_J's corollary #7, “To the New Age Liberal, the past is an indictment, the present is unjust, and the future will be perfect if and only if they establish the rules and cultural norms for current society.”

When their policies fail, blame your internal enemies.

When you run out of internal enemies...

You make with the bellicose,

Like North Korea.

Then, war...

1984

 

[unregistered]

 

[sigh]

Stockton isn't going to be the last. US States and Municipalities have consistently underfunded their retirement accounts, 35-39%, and have just as consistently overestimated their annual returns, approx. 7.5%. This particular method of book cooking isn't restricted to Stockton, it's a nationwide scheme.

The courts and the city can do as they will, for whatever reasons they can rationalize, but only a few more shoes dropping will change the nature of 'Munnies' for long into the foreseeable future. Interest rates on bonds will become prohibitively high and the municipalities are going to find themselves severely cash strapped, or no cash at all, when it comes to funding civic infrastructure improvements. No one is going to invest because the bonds themselves will be bordering on junk bond status. The chickens are indeed coming home to roost.

Ishmael

Whew! I was just about to give up on yet another morning pic-war but then you came and revised the actual discussion. Well done, Ish. Not sayin' it will last, but you gave it a shot anyway.

You're right, too. Underfunding pension funds has been a shell game for a long time. What's sad is that now the politicians who played it so well are retired and home free, and we're left holding the bag.

 

[BotanyBoy]

You're right, too. Underfunding pension funds has been a shell game for a long time. What's sad is that now the politicians who played it so well are retired and home free, and we're left holding the bag.

Greatest generation indeed......



On another note why aren't all the CA dumb shit libs in here telling us how fucking amazing their state economy is due to liberal economic policy??

They do it every time one of the RWJC post something about all the CA refugees blowing up other cities red/purple states where there actually is an economy.

 

[zipman]

Yo, chief! Refresh my memory here....why is it not racist when you say this...




but when I refer to your pretend "daughter" as a RentAGook™,

that....That...THAT'S RACIST!

Bit of a double standard, no?

It makes both of you racists, you dumbass.