Showing posts with label Bankruptcy. Show all posts
Showing posts with label Bankruptcy. Show all posts

Monday, May 15, 2017

Something to read while you are eating your Rice Krispys

Hurricane Bearing Down on the Casino

Yesterday I said the Donald was absolutely right in canning the insufferable James Comey, but that he has also has stepped on a terminal political land-mine. And he did.
That’s because the entire Russian meddling and collusion narrative is a ridiculous, evidence-free attempt to re-litigate the last election. And now that the powers that be have all the justification they need. And what is already an irrational witch-hunt will be quickly turned into a scorched-earth assault on a sitting president.
I have no idea how this will play out, but as a youthful witness to history back in 1973-1974 I observed Tricky Dick’s demise in daily slow motion. But the most memorable part of the saga was how incredibly invincible Nixon seemed in early 1973.
Nixon started his second term, in fact, with a massive electoral landslide, strong public opinion polls and a completely functioning government and cabinet.
Even more importantly, he was still basking in the afterglow of his smashing 1972 foreign policy successes in negotiating detente and the anti-ballistic missile

Wednesday, January 20, 2016

Board of Education may soon be gone

This union leader is going to be out of her mind today as she realizes she killed the golden goose
GOP to move for state takeover of CPS — Rahm '100 percent opposed' (Don't believe it)


Rahm and other elected officials secretly love the idea. It gets them off the hook. The advantages are:

  • The state will take over one giant cluster-f---.
  • The state will probably take the school district bankrupt right away
  • A bankruptcy filing will result in a prompt renegotiation of union contracts
  • The bankruptcy will result in a redesign of the pension program (no, your existing pension will not be grandfathered)
  • The takeover and bankruptcy will be a precedent for other municipalities and school districts that get into trouble. Chicago, Cook County, Harvey, 

Thursday, June 11, 2015

A trial balloon

And with this tax, every business that can will exit.

City income tax should be on the table, mayoral ally says

WRITTEN BY FRAN SPIELMAN POSTED: 06/10/2015, 07:12PM
Ald. Joe Moore (49th), left, shakes hand with Mayor Rahm Emanuel in 2012 as then CTA President Forrest Claypool looks on. File Photo. | Al Podgorski~Chicago Sun-Times


Chicago needs so much new revenue to solve a $30 billion pension crisis and shed its junk bond rating, it’s time to consider imposing a first-ever city income tax, according to one of Mayor Rahm Emanuel’s staunchest City Council supporters.
Ald. Joe Moore (49th), newly-elected chairman of the City Council’s Housing Committee, acknowledged a city income tax that applies to all wages earned in Chicago — whether by city residents or suburbanites — would need to be authorized by the Illinois General Assembly.

Unlike the state income tax, which is based on a flat rate, Moore favors a graduated city income tax. If it’s legal, that

Wednesday, June 10, 2015

Rahm shows his gratitude to the voters of the 19th Ward by

sending in revenue agents on bicycles to write everyone up. 


The 19th Ward voters came out in droves to put this clown back into office and this is what he does. We are getting what we deserve. 

Revenue agents have been spotted pedaling in N. Beverly, Walden Parkway, 104th Claremont and in Fishers.  They are looking for anything to bring in $$$$$$.

Legit violations they are writing,
  • Vehicle stickers
  • License plates
  • Illegal parking
Pimpy violations they are writing,
  • Vehicle parked too far from the curb or facing the wrong way
  • Cracked tail light
  • Grass not cut
  • Garbage cans overfilled
  • Peeling paint
Rumor is that the program to is going to be expanded to include 
  • Revenue agents standing at a stop sign with a camera, watching for people that don't come to an absolute dead stop.
  • Property owners that don't shovel snow completely
  • Failure to recycle
  • Speed radar on a bike
Don't worry. You will get an opportunity to contest the ticket. 

I'd like to see Rahm expand this program into the 17th or 9th wards. 




Friday, May 29, 2015

Disgusting

The Hastert indictment is just the latest example of our leaders feeling that they are above the rules. Hastert is the Illinois second congressman in as many months to have his career destroyed by ignoring the rules. 

Locally, the Chicago pols have created a facade of reform only to be sure that the ethics rules are riddled with holes. We are hopelessly lost. Rahm was reelected just last month by an electorate that was easily bullshitted. When will people wake up?  

Our so-called leaders are funding a decadent and corrupt machine that exists to serve themselves rather than the city.  The players are extracting extreme and undue profits as the city careens into financial insolvency. Residents face bleak futures while the players enjoy bright futures.  The fact that Chicago is famous for this “machine” is disgraceful.

The hard truth is our elites – business and civic leaders – have sold the city out. While they strip the city of needed funds with their no-bid, non-competitive contracts for millions of dollars, they recycle a portion back into politics by funding the political machine that is designed to protect their own positions.

Let’s look at another example – the lawyers.  Since Emanuel’s executive order on May 15, 2011 banning pay-to-play, Schiff Hardin LLP attorneys have given $31,850 in campaign cash to

Tuesday, May 26, 2015

This guy has an ego as big as the city's debt. Proposes back door real estate tax increase.

CHAIR - AFRICAN, AMERICAN CAUCUS
Chicago homeowners have managed to avoid suburban-style garbage collection fees, but those “spoiled” days may be coming to an end, the newly elected chairman of the City Council’s Black Caucus said. “I hate to say it. I know there’ll be a lot of pushback. But a nominal fee may be something we have to look at” to solve the $30 billion pension crisis, said Ald. Roderick Sawyer (6th).

“All over the country and in smaller municipalities, they do pay for garbage collection. In Chicago, free garbage collection is something we’ve become accustomed to. But just like not having a sales tax on services, those days may be over. We have to look at it to balance the books.”

Four years ago, Inspector General Joe Ferguson estimated that a volume-based, “pay-as-you-throw” garbage collection fee could generate as much as $125 million a year for the cash-strapped city. Chicago could raise an additional $18 million a year by imposing a blue cart recycling fee, Ferguson said then. Emanuel ignored both ideas, apparently concerned it would be viewed as a back-door property tax increase.
But now that the Illinois Supreme Court has overturned state pension reforms and placed Emanuel’s plan to reform two of

Thursday, May 21, 2015

City workers are about to get what they voted for.

Did you think Rahm would not walk away from the pension obligations? You were dumb. He's walking. You have nobody to blame but yourselves. 

Nobody involved in the city pension crisis would want it to come to this, I’m sure, and there are plenty of assurances all around that it never will.
But if city pension funds are allowed to continue on their current trajectory and become insolvent, whose responsibility is it to make sure the retirees get paid?
I’ve always assumed the answer is that it’s ultimately the responsibility of the city, and therefore of city taxpayers.
OPINION
Maybe not.
In defending against a lawsuit brought by city workers and retirees over benefit cuts to those covered by the municipal employees and laborers pension funds, lawyers for the Emanuel administration have started casting doubt on that assumption.
Moody’s Investors Service also made reference to this legal uncertainty in a report this week clarifying the reasoning behind its decision to downgrade the city’s bond rating to junk status.
Illinois law defines pension benefit payments as obligations of the pension funds, which are separate legal entities from the city, Moody’s noted.
“But if the pension funds are unable to fulfill these obligations, it is unclear which party will

Saturday, May 16, 2015

Substance or window dressing?

Will this person lead Chicago out of it's financial morass or will  she be the point person during the march to bankruptcy?


Mayor Rahm Emanuel Friday named former CTA chairman Carole Brown as the city’s new chief financial officer, putting her in the driver’s seat as Chicago nears its fiscal cliff.
Brown headed the CTA board under former Mayor Richard M. Daley. She replaces outgoing chief financial officer Lois Scott, who leaves the job next week.


“Carole Brown brings decades of financial experience to the City of Chicago,” Emanuel said in a statement. “Carole’s experience and reputation as a tough, but honest financial manager will be a valuable asset as we continue to create a conducive environment for job creation and economic growth for the City of Chicago.”

Brown inherits the fiscal turmoil facing the city. The Illinois Supreme Court’s decision last week overturning pension reform placed Emanuel’s plan to reform two of four city pension funds in similar jeopardy. That triggered the dominos that fell this week as several credit-rating agencies downgraded the city’s credit rating.
It started on Tuesday when Moody’s Investors Service dropped Chicago’s bond rating to junk status.


On Thursday, Standard & Poor’s lowered the city’s credit rating to three notches above junk status.
And on Friday, Fitch Ratings joined the other two major credit-ratings firms and downgraded the city’s creditworthiness to three notches above junk status.
In a news release, Fitch said, “The downgrade reflects increased fiscal pressures on the city following last week’s Illinois Supreme Court decision severely limiting the ability to modify pension benefits in the state and a subsequent downgrade of the city’s credit to below investment grade.”
Outgoing CFO Scott, reacting to Fitch’s downgrade, said in a statement, “Today’s downgrade by Fitch is the result of heightened pressures on the City’s portfolio, prompted by the recent reversal of the Illinois pension reform bill and subsequent downgrades. However, Fitch does not believe that the court decision has a direct effect on the prospects for the city’s pension reform for the municipal and laborers’ funds, and recognizes that the city has many strengths – from its role as an economic hub for the Midwest to improving employment address and adequate reserves – to address the challenges it faces.”

Brown, a longtime investment banker, will have to negotiate with the banks to call off the wolves. Banks will have the ability to call back $2.2 billion in debt, Moody’s said earlier this week.

The Moody’s downgrade is expected to cost the city hundreds of millions of dollars in increased borrowing costs and penalties forcing the city to either cut spending or raise taxes.
And unless the Illinois General Assembly lifts the hammer, Brown must also find a way to meet a state-mandated $550 million payment due in December to shore up police and fire pension funds.
Laurence Msallthe president of the Civic Federation, pointed to Brown’s experience as an investment banker and as the former CTA chairwoman.

“She brings a wealth of financial and real government experience, but she faces the greatest fiscal challenge in the city’s history,” Msall said. “She will need to work both with existing creditors and credit-rating agencies to present both a short term and a long term plan that’s both credible and stabilizing to the city’s ongoing financial challenges.”
Brown is currently a manager director at Barclays, leading the firm’s Midwest municipal practice and serving as senior investment banker for municipal clients. 

She is a Harvard University graduate with a master’s degree from Northwestern University’s Kellogg School of Management. Her inner circle includes Valerie Jarrett, senior adviser to President Barack Obama; Desiree Rogers, the CEO of Johnson Publishing, and former CTA board member Sue Leonis. And Brown is no stranger to Emanuel’s administration, serving on the mayor’s panel to reform special taxing districts and on the selection committee that deadlocked over the appointment of an independent City Council budget analyst.
  
During her tenure as chairman of the CTA board from 2002 through 2009, she helped “the CTA address structural deficits through efficiencies and reforms, finance billions of dollars in deferred maintenance, rail improvements, and capital construction. She also helped oversee development of the Pink Line and the first Blue Line reconstruction project,” the city said in a press release.

But it wasn’t all a smooth ride. Brown, who worked as senior vice president of Lehman Brothers while heading the CTA board, was berated by former Ald. Dorothy Tillman for defending her employer after the company became the first city contractor to admit past ties to slavery. Tillman demanded Brown step aside as CTA chairwoman or apologize for allowing herself to be used to sanitize the reputation of a company built on the backs of her own people.

Brown could not be reached Friday, but in a press release she said, “I am grateful to Mayor Emanuel for offering me this opportunity to serve Chicago residents, and I am eager to begin working with the mayor’s financial team to address the city’s financial challenge.

Thursday, May 14, 2015

Layoffs Coming Soon

20% reduction in workforce across the board in all affected agencies (except police and fire) predicted! Layoffs may eventually hit 40%.  

Moody’s Investor Service dropped the bond ratings of Chicago Public Schools and the Chicago Park District to junk a day after it did the same for the city of Chicago.
For CPS, the downgrade doesn’t trigger any new payments to financial institutions, but the worsening of CPS’ ratings could potentially affect negotiations the district has entered into with several banks over those “swap” termination fees.
Moody’s dropped CPS’ rating three notches to Ba3 from Baa3, with a continuing negative outlook. The Chicago Park District saw the same three-notch slide to Ba1 with a negative outlook.

CPS’ rating, which determines its borrowing costs, applies to $6.2 billion in general-obligation debt; the park district’s rating to $616 million in general-obligation debt.
Moody’s blamed CPS’ “steadily escalating pension contributions and use of reserves to fund those contributions.”
“We believe pension costs will place increasing strain on the district’s precarious financial position” absent new revenue or cuts, “both of which appear increasingly difficult for the district to achieve,” it wrote of CPS.
As for the Park District, it said, “We perceive increased risk that the city’s intensified pressures will adversely affect CPD’s [Chicago Park District] financial operations and position.”

The Chicago Park District says it strongly disagrees with the downgrade and Moody’s assessment that the park district has governance ties to the city. The park district has operated as its own entity for 81 years. It also has its own pension reform that went into effect in January and allows for any source of

Wednesday, May 13, 2015

Moody's downgrades Chicago credit rating to junk bond status - FOX 32 News Chicago



Moody's downgrades Chicago credit rating to junk bond status 



Wait until you see what happens next.


This day has been coming for a long time. Don't say you are surprised. 


If you are a City of Chicago retiree you should be concerned. 


If you are a City of Chicago employee, you should be scared, real scared. You are about to sit in the barbers chair. 



The pension guarantee clause in the Illinois constitution means absolutely nothing to a bankruptcy judge. 

Monday, May 11, 2015

The foundation for a bankruptcy filing looks like this.

Source to FOX 32: CPS may run out of money during next school year


1. First there was the 7% pay cut.

2. Then Rauner addressing the city council said, "the state can't help you".

3. Then the state Supreme Court upholds the priority of pensions. 

4. Now stories like this are starting to appear. 

5. Soon legislation permitting governmental bankruptcy will be passed.

6. So after that, any local government with a pension "problem" will be able to clean it up.