Moody's warns of mass California municipal bankruptcies, page 1


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Topic started on 19-8-2012 @ 01:19 AM by xuenchen
Moody's is a big credit rating service and financial research company.

They are issuing dire financial warnings for California.

In the wake of a recent shocking announcement by California that its' sales tax revenues have plummeted 33.5%, Moody's is now saying more municipalities could go bankrupt.

A few already have recently.

California has been playing the accounting tricks by shifting credit from one place to another in order to cover expenses.

The vultures are circling. The money has to come from somewhere.


Chriss Street -- Aug 17, 2012
The klaxon horn went off this evening for California municipal bondholders when Moody’s credit rating service issued a report stating that the plummeting financial condition of many California counties, cities, school districts and other government agencies will soon result in large numbers of municipal bankruptcy filings. Concerned about their own potential liability for providing high ratings that encouraged conservative elderly Americans to invest in risky bonds; Moody’s announced they will undertake a wide-ranging review of municipal finances because of the growing insolvencies.

The Moody’s report comes just two days after we reported that “CALIFORNIA SALES TAX REVENUE NOSE-DIVES BY 33.5%.” Stock brokers have often recommended California municipal bonds as very safe investments, due to historically low default rates and relatively stable finances. But Moody’s said that outlook is changing after the Chapter 9 Bankruptcy filings of Stockton, San Bernardino and Mammoth Lakes.

Moody’s is especially concerned with the growing attitude among many cash-strapped cities that filing bankruptcy to avoid paying bondholders, is politically more advantageous than cutting spending. As a result, Moody’s will re-assess the financial condition of all California cities, which issues about 20 percent of the municipal bond volume nationwide, “to reflect the new fiscal realities and the governmental practices.”........


Moody's warns of mass California municipal bankruptcies

This is a major problem in every State.

What will it take to solve the problem ?

More jobs or more government "assistance" ?

Which solution do YOU want ?

More jobs will reduce government assistance




reply posted on 19-8-2012 @ 01:53 AM by Samuelis
reply to post by xuenchen




Who would be the main victims?

The citizens of coarse.



Who would be the main benefactors?


Also the citizens. The end of one kind of system marks the beginning of a new an improved beta economy. One without career politicians, and their constant greed and collusion with the private sector. A true and fair media owned and moderated by the people. A brand new banking system.



Who would be the main beneficiaries?


The citizens.


reply posted on 19-8-2012 @ 02:24 AM by benrl
reply to post by Alxandro




their citizens start moving to other states.


Too late, lol, Im closing on a house outta this god forsaken cesspool any day now.

Should have the keys to my new place soon and Im outta here, Im right near San Bernandino so I have been following the budget shortfall extensively


reply posted on 19-8-2012 @ 09:16 AM by jibeho
Cali is a prime example of a failed model. Heavy on taxes and heavy on entitlements and heavy on ridiculous spending. ie. Browns new rail system....

For examples of successful states, just look to those states with no personal income tax. Their revenues are actually increasing. WOW.

Art Laffer is proposing a 5% flat tax for California in an effort to save the state.

Over the past decade, non-income-tax states have seen 59 percent economic growth, versus just 38 percent for high-income-tax states. Job growth has been 4.7 percent in the non-income-tax states, while high-income-tax states actually lost 2.9 percent of their jobs. Population growth is the same story, up 12.3 percent in the non-income-tax states and just 3.8 percent in the high-income-tax states. Perhaps most interestingly, non-income-tax states are seeing more rapid growth in state and local tax revenue, as the high-income-tax states are undermining economic performance and, as a consequence, depressing revenues.


www.nationalreview.com...

Laffer's plan for a flat tax. Note that Jerry Brown campaigned for a national flat tax when he ran for president in 1992.
www.freerepublic.com...

Let's hope that it's not too late. It is definitely NOT too late for sweeping tax reform on a Federal level. Time to put something in place that actually WORKS. For everyone. Everyone needs to have a little skin in the game somehow, someway. Either by Flat taxing or by a FAIR tax system (National Sales Tax not VAT tax)
edit on 19-8-2012 by jibeho because: (no reason given)
edit on 19-8-2012 by jibeho because: (no reason given)



reply posted on 19-8-2012 @ 05:11 PM by ABNARTY
reply to post by xuenchen


Great questions. However I partially disagree with the solutions presented by Samuelis below.

While a clean slate is possible, it is not a free and clear deal. The same economic arsonists who assisted in these economic hardships for these various municipalities, now see further financial upside.

www.abovetopsecret.com...

The privatization of parts of these municipalities or the entire things is a real possibility. At that point, I am not sure where we area anymore as a nation: a corporation with share holders decides local laws and ordinances.


reply posted on 19-8-2012 @ 11:42 PM by Rockpuck
reply to post by xuenchen


WOW.. how the holy hell did their sales tax revenue fall so much so fast???

Putting it into a perspective we can all understand.. a 33% decline in general consumption in the broader Federal economy would put us into a technically classified depression.


reply posted on 19-8-2012 @ 11:56 PM by VforVendettea
reply to post by xuenchen


Well, yeah.

The state has become a parasite which is so bloated they are killing the host.
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