Moody's warns of mass California municipal bankruptcies

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posted on Aug, 19 2012 @ 01:19 AM
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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





posted on Aug, 19 2012 @ 01:29 AM
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Which solution do YOU want ?


Economic collapse and a clean slate. It's gotten way out of hand.



posted on Aug, 19 2012 @ 01:40 AM
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Originally posted by Samuelis



Which solution do YOU want ?


Economic collapse and a clean slate. It's gotten way out of hand.


Interesting view.

Who would be the main victims?

Who would be the main benefactors?

Who would be the main beneficiaries?



posted on Aug, 19 2012 @ 01:53 AM
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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.



posted on Aug, 19 2012 @ 02:19 AM
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What even more disturbing is what Cities like san bernadino are considering doing about it.

There was the proposal to cease foreclosures with imminent domain and charge the foreclosed properties occupants rent.

On the surface it sounds good because it buys good will toward the cities, but its a gross miss use of imminent domain and its a money grab on the cities part having nothing to do with helping but rather to fill the short comes in the cities budget.

Id much rather them fix the spending problem rather than make up new sources of revenue.



posted on Aug, 19 2012 @ 02:21 AM
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Tax the hell out of the super rich Hollywood actors and get them to bail out their state before all their citizens start moving to other states.
I'd rather take my chances with West Nile than deal with Californicated left wing ideologies.



posted on Aug, 19 2012 @ 02:24 AM
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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



posted on Aug, 19 2012 @ 09:16 AM
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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)



posted on Aug, 19 2012 @ 05:04 PM
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There are only two words to define the problem in Cali. “Illegal Immigration”!



posted on Aug, 19 2012 @ 05:11 PM
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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.



posted on Aug, 19 2012 @ 08:01 PM
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This is what happens when public union backed leftists control the purse strings for decades and nothing is done to stop the illegal alien invasion due to fears of being wascist!

If you think Jerry Brown is doing a great job, vote Obama or third party (it counts just the same)

If you think that Tom McClintock should have been elected instead of Arnold, vote Romney (and get your leftist friends to vote Green party)



posted on Aug, 19 2012 @ 09:43 PM
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california, your liberal utopia is collapsing.


but don't worry, your government will save you.

i mean someone else's money will save you.



posted on Aug, 19 2012 @ 10:15 PM
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alright Humanity!!~



Times dawnin to wipe the slate CLEAN!


like or dislike, just about all of us are in for the ride. Lets make it a peaceful one!



posted on Aug, 19 2012 @ 10:17 PM
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Originally posted by TheCoolKids
This is what happens when public union backed leftists control the purse strings for decades and nothing is done to stop the illegal alien invasion due to fears of being wascist!




This is what happens when you orchestrate a collapse. Things change.



posted on Aug, 19 2012 @ 10:37 PM
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The only thing that will save them is.......


REDUCING THE SIZE AND SCOPE OF GOVERNMENT



posted on Aug, 19 2012 @ 10:46 PM
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coming to a city near you!

i can feel the excitement in the air



posted on Aug, 19 2012 @ 10:46 PM
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Slightly off topic, but a Deutsche bank whistleblower came forward a few weeks ago and stated that the bailout in 2008 was sent to the Chinese for the most part.

Seems they bought the majority of the fraudulent mortgage based securities and announced that they were going to send 'their people' here to claim their property or else... Henry Paulsen, Ben Bernanke and Friends told Congress that without the money 'there would be martial law' but I suppose that's true in a way. If the Chinese invade and want their property back in 1/2 acre plots, what are you going to do about it?

The whole system completely collapsed in 2008, the Fed has been propping up the fantasy ever since, and your money went to the Chinese investors without your knowledge, permission or input.

And the bankers got really big bonuses, kept their cush jobs, and are still running the casino we laughingly call the stock market.

More at this blog here, where I initially read about it:

occupycorporatism.com...



posted on Aug, 19 2012 @ 11:29 PM
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Originally posted by zzombie
The only thing that will save them is.......


REDUCING THE SIZE AND SCOPE OF GOVERNMENT


and, don't forget about........

The Corruption, Bribery, and Theft




posted on Aug, 19 2012 @ 11:42 PM
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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.



posted on Aug, 19 2012 @ 11:56 PM
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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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