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Finance - Investments Sub-forum: Non-Actuarial Personal Finance/Investing

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  #81  
Old 09-19-2011, 01:34 PM
Irish Blues
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At this rate, we should take bets on whether JeffCo or Greece go belly-up first ... because both of them seem hell-bent on sticking it to the people at all costs instead of declaring the obvious.
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  #82  
Old 09-20-2011, 12:31 PM
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Yeah, if you're having to write down 1/3 of the debt, that's at least partially a default.

Now, it's not as big a write down as it could be, but it's still not being made whole.
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  #83  
Old 09-23-2011, 04:12 PM
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http://latimesblogs.latimes.com/mone...er-obama-.html

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A steep drop in interest rates on tax-free municipal bonds this year has curbed individual investors’ appetite for a new California debt offering.

The state’s brokerage network took in orders Friday and Monday for $640 million of a $2.5-billion general obligation bond deal offered by Treasurer Bill Lockyer, his office said late Monday.

By contrast, individual investors put in orders for nearly $1 billion of bonds at the last such offering, in November.

The difference between then and now: Market yields on California muni bonds have fallen sharply, pulled down by the slide in U.S. Treasury bond interest rates this year and by the relative calm in the muni market after a major sell-off last fall and winter fueled a spike in yields.

When it issued bonds in November the state paid an annualized tax-free yield of 4.23% on 10-year securities in the offering. This time around the state set the preliminary yield on its 10-year bonds at 3.17%, more than a full percentage point less.
....
Because of its protracted budget woes, California has the lowest bond ratings of any state, at A1 from Moody’s Investors Service (tied for last place with Illinois) and A- from Standard & Poor’s.
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  #84  
Old 10-12-2011, 10:34 AM
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Harrisburg, PA city council votes to throw in the towel, admitting what's obvious to most.

http://www.pennlive.com/midstate/ind...l_votes_2.html

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Harrisburg City Council answered the state’s takeover threat by voting to seek Chapter 9 municipal bankruptcy protection Tuesday night, essentially adding the courts and more turmoil to the fight over the capital city’s fate.

The same majority who voted down the state-sponsored Act 47 plan and Mayor Linda Thompson’s followup fiscal-recovery plan voted 4-3 to hire Philadelphia-area lawyer Mark Schwartz to fight the takeover and then 4-3 to file for bankruptcy as soon as possible.

Councilman Brad Koplinski said the recovery plans introduced so far have done nothing for the city and only protect creditors and other stakeholders of the city’s debt. Harrisburg would have to file for bankruptcy in three to five years under the plans anyway, he said.

Koplinski introduced both resolutions Tuesday night and said the bond insurance company Assured Guaranty Municipal Corp., which backed much of the city’s incinerator debt, has to step up with at least $100 million in concessions to make any plan work.

“This really is our only option out there,” Koplinski said of bankruptcy. “I believe this is the only thing that will work.”

Susan Brown-Wilson, Eugenia Smith, Wanda Williams and Koplinski voted in favor of both resolutions.

"Wake up, Harrisburg. Wake up and look around,” Smith said. “I’m tired of being bent over and spanked in the corner. We should have been filing for bankruptcy in 2010.”

Brown-Wilson said she can sleep at night because she rejected the plans state lawmakers wanted the city to adopt.

“AGM needs to come to the table, ladies and gentleman,” she said. “It’s about political gamesmanship and lining pockets.”

Schwartz would not say when he would file bankruptcy papers on the city’s behalf, but said it would be soon.

“[Chapter 9] means Harrisburg may get immediate relief from the lawsuits against it,” Schwartz said. “Nobody has tried to negotiate more than the four people who carried the vote tonight and me.”

Thompson’s spokesman, Robert Philbin, said the council made a very unpopular move Tuesday night. He said a recent poll commissioned by ABC27 News of 1,000 city voters shows that only 13 percent of the city’s residents support the bankruptcy option.

City Council President Gloria Martin-Roberts said filing for bankruptcy would only create more lawsuits against the city.

Council Vice President Patty Kim and Councilman Kelly Summerford echoed Martin-Roberts’ sentiments.

“Our creditors are going to sue us out the wazoo before we even get to bankruptcy court,” Kim said. “From this point on, this is going to get harder.”

Schwartz recently sent a letter to Gov. Tom Corbett’s general counsel, Steve Aichele, asking for a meeting with him to discuss alternatives to a takeover.

He said Aichele, who used to be a lawyer for Saul Ewing, the law firm that represents Assured Guaranty, called his request “ridiculous.”

“What’s ridiculous is the fact that this governor’s council’s previous law firm is the one representing the bond insurer and they’re acting just like an insurance company. A tree falls in your yard, you paid 30 years worth of insurance premiums, guess what, they don’t want to pay for it,” Schwartz said.

“They were paid a fee to take a risk. And what this whole thing is about, the lawsuits and the takeover legislation is all about their getting priority over the other creditors,” he continued. “The governor hasn’t brought 10 cents to the table. Nor the state senators, nor any of the legislators.”

The fiscal-code amendment promises to take away state funds available to the city if it attempts to file for bankruptcy before next summer.

Those funds include grants, economic development monies and other entitlements it could be eligible for moving forward.

The amendment cannot prevent the city from filing for bankruptcy, however, and it cannot strip pension funding and fire protection money the state delivers to Harrisburg each year.

Schwartz called the state’s attempt to block the city from filing for bankruptcy and its takeover threat “unconstitutional.”

Further, Thompson cannot veto Resolution 48, which the council adopted, acting city solicitor Jason Hess said.

Hess told the council the resolutions are not binding because it did not send him a letter of engagement defining the scope and fees associated with the hire, nor did it advance copies of either resolution for him to review.

“If you choose so, you can go against the advice,” Hess said. “As parliamentarian, I cannot enforce the rules of City Council.”

Council tried to hire Schwartz at its last meeting, but Roberts and Hess fought the hire shortly afterward.

In an attempt to prevent the city from filing for bankruptcy, state lawmakers passed an amendment to the state’s fiscal code just before it recessed for the summer.

Last month, the House overwhelmingly approved an amendment Rep. Glen Grell, R-Hampden Twp., made to legislation introduced by Sen. Jeffrey Piccola, R-Dauphin County, that would allow a state takeover of the city.

Neither Piccola nor Grell could be reached for comment following the council’s vote Tuesday night. The state Senate is expected to vote on legislation shortly after it returns from recess Monday.

Corbett, who also could not be reached for comment, promised to sign takeover legislation should it reach his desk.

A spokesman for AGM could not be reached for comment.

Piccola and Grell said previously that the city could avert a takeover if council could come together on a fiscal-recovery plan that addresses the city’s $310 million of incinerator debt and budget deficit.

Schwartz said he normally charges $525 per hour to represent clients, but will represent the council for $300 an hour unless it wins substantial concessions from the city’s creditors.

He said he doesn’t expect the cash-strapped city to pay him immediately for his services.
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  #85  
Old 10-12-2011, 10:56 AM
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Finally.

Also, nice of the lawyer to slash his billing rate, I suppose.

It's got to suck to work for bankrupt clients.
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  #86  
Old 10-12-2011, 12:53 PM
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Quote:
Originally Posted by campbell View Post
Finally.

Also, nice of the lawyer to slash his billing rate, I suppose.

It's got to suck to work for bankrupt clients.
I could be wrong, but I think the lawyers are the first to get paid in bankruptcy.
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  #87  
Old 10-12-2011, 01:01 PM
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Originally Posted by echo View Post
I could be wrong, but I think the lawyers are the first to get paid in bankruptcy.
I'm sure that the lawyers who wrote the bankruptcy law were nothing but disinterested parties.
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  #88  
Old 10-18-2011, 09:23 AM
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http://www.snl.com/InteractiveX/arti...px?ID=13454450

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Connecticut Attorney General George Jepsen reached settlements with the three major credit rating agencies over allegations that the firms unfairly gave low credit ratings to public bonds.

As part of the settlements, Moody's Corp.'s Moody's Investors Service Inc., McGraw-Hill Cos. Inc.'s Standard & Poor's, and Fitch Inc. have agreed to credit the state approximately $900,000, which will be used to offset the expense of obtaining future credit ratings on sales of state bonds, Jepsen said in an Oct. 14 news release.

In suits filed in July 2008, Connecticut alleged that public bonds frequently received lower credit ratings than corporate bonds, even though the rating agencies' own studies showed that public bonds were far more likely to be paid back than their corporate counterparts. Connecticut alleged that the agencies' deceptive and unfair trade practices cost the state and its cities, towns and schools, as they paid higher interest rates than necessary on the bonds and bought unnecessary bond insurance.
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  #89  
Old 10-20-2011, 04:10 PM
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This is going to be fun:
http://mobile.reuters.com/article/id...11020?irpc=932

Quote:
Pennsylvania Governor Tom Corbett signed legislation on Thursday that allows for the takeover of the state's capital city of Harrisburg, setting up a legal confrontation between the state and the city.

The bill paves the way for the governor to declare a state of fiscal emergency that leads to a recovery plan for Harrisburg, which filed for bankruptcy last week.

Harrisburg, a city of about 50,000, is struggling to pay for essential services as well as about $300 million in debt that funded an incinerator project that failed to generate expected cash.

The Harrisburg City Council voted 4-3 on October 11 to file for a Chapter 9 municipal bankruptcy as a way of resolving a massive debt crisis brought on by the funding of an incinerator that hasn't generated enough cash.

The action immediately generated conflict between the City Council and the mayor, Linda Thompson, the state legislature, and the governor, who dispute the legality of the Council's action in filing for bankruptcy.
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  #90  
Old 10-20-2011, 05:38 PM
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money well spent on the incoming legal fight!
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