Jefferson County Alabama Files Bankruptcy

[BattleFlag1776]

Jefferson County, Alabama, filed the biggest U.S. municipal bankruptcy after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart.

http://www.bloomberg.com/news/2011-11-09/alabama-s-jefferson-county-files-for-u-s-s-biggest-municipal-bankruptcy.html


If anyone ever wonders how "leading" cities fall, this is about as good an example as one can hope to find. Bad stuff!

[donnay]

This is just the beginning...

[Seraphim]

Good. It needs to happen en masse. Guess what? These debt write downs are good for your wallet. It's deflationary. It's also good for these counties.

They paid over inflated prices for goods and now they get a 750 million $ write down. That's good for the county.

Look at who the creditor is. JP Morgan - they have extended so much ridiculously bad credit (and inflated the cost of living) they can suck a fat one. Creditors like that had better write down these debts to make them reasonable.

The Kondratieff winter seems to be kicking into high gear.

[jmdrake]

Said. What the OP article doesn't tell you is that the sewer upgrade that's responsible for this bankruptcy was because of a federal mandate.

http://www.miamiherald.com/2011/11/09/2494501/ala-county-votes-for-largest-municipal.html

Perhaps the biggest is the potential impact on the county's 658,000 residents, who could be asked to pay higher sewer rates. Officials say it's too early to assess the full impact, though bankruptcy filings can lead to layoffs, tax increases, pension reductions for public workers, and spending cuts on things like schools and roads.

The problems were years in the making.

The county's debt ballooned after a federally mandated sewer project was beset with corruption, court rulings that didn't go its way and rising interest rates when global markets struggled.

[Seraphim]

^^^^

No surprise there. JPM and Federal intervention go hand in hand. Ditto for Goldman Sachs.

[xFiFtyOnE]

Jefferson County is named for Thomas Jefferson...help me find the irony in this.

[ShaneEnochs]

Good for them. Now they can start fresh.

Hell, I filed for bankruptcy a couple years ago. It's not something to be feared. You should AVOID it if you can, but sometimes circumstances warrant it. As Ron Paul said, you gotta liquidate the debt.