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Post by jacquelope on Aug 5, 2012 10:47:52 GMT -6
Say it ain't so! Er, no, wait, say it is so. www.reuters.com/article/2012/08/02/us-usa-bankruptcy-stockton-idUSBRE87100420120802Assured says Stockton bankruptcy plan unfair, favors Calpers By Peter Henderson SAN FRANCISCO | Wed Aug 1, 2012 8:02pm EDT (Reuters) - Bond insurer Assured Guaranty, facing massive losses in Stockton, California's bankruptcy, on Wednesday said the largest U.S. public pension fund, Calpers, was getting preferential treatment among creditors. That may set the stage for a fight over whether cities in dire circumstances legally have the ability to change obligations under pension plan benefits agreed to in much better times. Calpers, the California Public Employees' Retirement System, so far has said that the cities don't have that ability. A Stockton proposal to creditors in May, which was made before Chapter 9 proceedings began, showed the city on the far outskirts of the San Francisco Bay Area was ready to fully pay pension fund payments but largely abandon payments on $121 million of pension obligation bonds backed by Assured Guaranty. Assured calculated that the loss on bond principal would be 83 percent. That amounts to $100 million, which Assured would have to cover.
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Post by unlawflcombatnt on Aug 5, 2012 13:39:04 GMT -6
A Stockton proposal to creditors in May, which was made before Chapter 9 proceedings began, showed the city on the far outskirts of the San Francisco Bay Area was ready to fully pay pension fund payments but largely abandon payments on $121 million of pension obligation bonds backed by Assured Guaranty. Sounds perfectly fair to me. Bond investors agreed to take the risk of not being paid back when they purchased bonds. City workers did NOT agree to any such risk. They never agreed to take the risk that they wouldn't get their pensions. Their contracts GUARANTEED those pension. Bond buyers knowingly take a risk. That's why they're paid interest. Workers with pension guarantees do not knowingly take a risk.
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Post by jeffolie on Aug 5, 2012 14:58:07 GMT -6
A Stockton proposal to creditors in May, which was made before Chapter 9 proceedings began, showed the city on the far outskirts of the San Francisco Bay Area was ready to fully pay pension fund payments but largely abandon payments on $121 million of pension obligation bonds backed by Assured Guaranty. Sounds perfectly fair to me. Bond investors agreed to take the risk of not being paid back when they purchased bonds. City workers did NOT agree to any such risk. They never agreed to take the risk that they wouldn't get their pensions. Their contracts GUARANTEED those pension. Bond buyers knowingly take a risk. That's why they're paid interest. Workers with pension guarantees do not knowingly take a risk. You are accurate ... their assumptions and intent of being able to get benefits rarely, if ever included not getting them .... they assume no risk in their mindsHowever, ignorance is not a legal defense. History is replete with failed American govt.s not being able to give their employees their contractual agreements. One need only look to Cities that failed and current govts that failed. In addition, examples can be found in failed foriegn govts. But, the most clear evidence remains in the thousands of failed American govt.s during various American depressions, not just the Great Depression of the 1930s. I have added to my below predictions in posts this year that by the time the Dollar crisis is over that there will be thousands …US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs, bills will not be paid, some bonds will default. When?Currently, I guess that the full impact will be about 2016 because I predict conservatives to sweep into more political power in Nov resulting in enacting conservative actions during 2013 that mostly impact in 2014 which will start a Dollar crisis that often takes a year or more to full devalue the Dollar's purchasing power into 2015 and/or beyond. I have a long term economic history point of view regarding my predictions including the predictions in 2011 & 2012 labelled: ' ... jeffolie predicts…US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs by the end of 2012, bills will not be paid, some bonds will default. Read more: www.unlawflcombatnt.proboards.com/index.cgi?board=general&action=display&thread=10102#ixzz22hwAUm2wOne of my favorite books which I bought copies of and made my adult children read now in its 6th edition, Selected as one of the best investment books of all time by the Financial Times, Manias, Panics and Crashes puts the turbulence... :
Manias, Panics and Crashes: A History of Financial Crises by Robert Z. Aliber, Charles P. Kindleberger
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