Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Could Illinois maybe merge with a richer state, say North Dakota. Chicago would be situated in the newly created state of East-North Dakota. Could they make it out of debt with the right mutual fund mix.
I wonder what will happen to Illinois GO bonds [I have one of it] still rated BBB+ interestingly but has Negative Outlook [use to be AA]
I think we still hear these news headlines every few weeks so often: Cali/Florida/Arizona worse than Greece [PIG, etc]. Difficult to predict what will happen but I think the worst could have been over, could be just another 'large bump' . don't want to disrespect the news but I think [to be optimistic] may work themselves out.
I think there was an article somewhere this morning that states Michigan unemployment rate has improve dramatically the past few months and sound like American Cars are building again [again, I am being very optimistic]
I hope Catch and Rono can share more news than us since they do live there... There would be very difficult as they call it tough love down the line
I love these disaster blogs. They present these debt as if all of it is due tomorrow and state is not able to service maturing debt. While on the subject:
It was the state treasurer on CNBC (note the CNBC link) saying that the state's finances are a disaster, and due to their deteriorating fiscal state, they are borrowing at higher rates than other states, among a number of problems (spending $3 for every $2 taken in, $25B in $45B in debt is for pension borrowing/unfunded liabilities, etc.)
The current budget is to spend $2.4B more than revenue. They have billions in past-due bills (an estimate by the comptroller of as much as $8B in past-due bills by July - there are apparently currently 208,635 unpaid bills) which should give confidence on repayment of their bond debt.
In microcosm, here is an one example of what a small city in deep financial trouble has done to try to responsibly dig its way out. As should not surprise anyone, there is a nice business for financial work-out consultants.
Taking a wild guess, I infer that Meredith Whitney has never dug into the details of what happens at a municipal level on the way to an actual default. At a detail level, such defaults involve failures of local administration, along with failures by consultants called in to help, along with a failure for help to come from the state or the feds. No one doubts that the risks are higher now, and the safety nets tattered and torn. Still, we could do with less macro-level blather from the talking heads on TV and more ground-level reporting.
Comments
great link
I wonder what will happen to Illinois GO bonds [I have one of it]
still rated BBB+ interestingly but has Negative Outlook [use to be AA]
I think we still hear these news headlines every few weeks so often: Cali/Florida/Arizona worse than Greece [PIG, etc]. Difficult to predict what will happen but I think the worst could have been over, could be just another 'large bump' .
don't want to disrespect the news but I think [to be optimistic] may work themselves out.
I think there was an article somewhere this morning that states Michigan unemployment rate has improve dramatically the past few months and sound like American Cars are building again [again, I am being very optimistic]
I hope Catch and Rono can share more news than us since they do live there...
There would be very difficult as they call it tough love down the line
http://www.bloomberg.com/news/2011-05-19/meredith-whitney-trips-over-her-muni-default-tale-joe-mysak.html
The current budget is to spend $2.4B more than revenue. They have billions in past-due bills (an estimate by the comptroller of as much as $8B in past-due bills by July - there are apparently currently 208,635 unpaid bills) which should give confidence on repayment of their bond debt.
From Planet Money:
http://www.npr.org/blogs/money/2011/03/10/134430495/a-failing-city-calls-in-the-finance-doctor
Long version:
http://www.npr.org/blogs/money/2011/03/04/134265471/the-friday-podcast-a-city-throws-in-the-towel
Taking a wild guess, I infer that Meredith Whitney has never dug into the details of what happens at a municipal level on the way to an actual default. At a detail level, such defaults involve failures of local administration, along with failures by consultants called in to help, along with a failure for help to come from the state or the feds. No one doubts that the risks are higher now, and the safety nets tattered and torn. Still, we could do with less macro-level blather from the talking heads on TV and more ground-level reporting.
this is an interesting article from E.Jones
should you worry about your muni bonds?
http://www.edwardjones.com/groups/ejw_content/@ejw/@us/@graphics/documents/web_content/web224251.pdf