Just the numbers please
You can save the $100,000 that Meredith Whitney charges for her research. Reuters has the data on municipal bond issuers with the weakest profiles by bond-market standards. Puerto Rico leads the pack as the least credit-worthy issuer. Issuer Weekly Yearly Outstanding Unfunded S&P Moody's Spread* Average Tax-supported Debt Pension Rating Rating Puerto Rico 225 203.7 $40 bln $24 bln BBB A3 Illinois 174 175.5 $24 bln $62 bln A+ A1 California 95 106.3 $87 bln $50 bln A- A1 Michigan 80 81.2 $7 bln $12 bln AA- Aa2 Nevada 70 68.0 $2 bln $2 bln AA Aa2 New Jersey 65 54.7 $32 bln $37 bln AA- Aa3 D.C. 60 57.3 $6.4 bln $0 A+ Aa2 N.Y. City 47 55.7 $61 bln $76-122 bln AA Aa2 Rhode Isl. 47 45.9 $2 bln $4 bln AA Aa2 Ohio 38 31.9 $11 bln $2.9 bln AA+ Aa1 *In basis points for the week ended June 17, 2011, Sources: Municipal MarketData, Moody's Investors Service, Standard & Poor's Ratings Services, local government budget reports, official statements
The roots of delusion
Small snippet from an excellent piece in the New York Times on the roots of the unfunded pension mess (emphasis mine):
It was 1999, and the California Public Employees’ Retirement System, or Calpers, the large government agency that manages retirement benefits for more than 1.6 million public workers, retirees and their families, was lobbying the legislature to increase employees’ benefits. Calpers’s plan would lower the retirement age for some workers to 50 years, even as it raised pensions to as much as 90 percent of their salaries.
Lobbyists were arguing that the plan — which would ultimately create the largest pension increase in the state’s history — wouldn’t cost “a dime of additional taxpayer money.”