There seems to be no limit to the amount of relevant news about the U.S. economic and financial system that the mainstream media keeps off the radar screen. I truly believe the technically insolvent status of the country’s fifth largest State is a lot more relevant to our collective lives than is the latest episode of
The Jerry Springer Show Trump vs. Rubio vs. Cruz vs. Clinton “reality” TV show.
Illinois sports a $111 billion unfunded State pension, it has $8 billion in unpaid bills, tax revenues are declining, spending is accelerating and it has yet to approve a FY 2017 budget. If this were a private corporation, it would have been taken through bankruptcy court and emerged with new owners at this point.
But the true financial condition is even worse than advertised. Let’s examine that underfunded pension estimate for a moment. That number would be based on the existing actuarial assumed liabilities vs. the allegedly marked to market value of the assets. I can say with 110% certainty that the total value of the assets are over-estimated by at least 10% and probably more. Included in its cesspool of investments would be items like private equity tech investments, high yield-turned-distressed bonds, overvalued real estate and energy investments and, of course, derivatives. There’s no way that the people running the fund have properly marked to market any of the above toxic assets.
The now-Senator and supremely corrupt Michael Bennett plugged the Denver Public Employee pension fund for a cool $250 million of losses on interest rate derivatives that he bought from his former colleagues at JP Morgan. Denver’s pension fund is tiny compared to Illinois’ grotesque public employee entitlement monstrosity.
I don’t rely on the mainstream media for updates on the Illinois financial saga. But every time I run across updates on the situation it has become worse.
I wonder if Obama will avoid the State of Illinois’ funeral the way he’s avoiding SCOTUS Justice Scalia’s funeral: LINK. Obama is a real class act…
Great article and, as an Illinois resident, right on! We elected a new Republican governor in 2014 with the hopes of getting our budget on the road to stability. Well, the Illinois House and Senate are run by Democratic machine con-artists, Michael Madigan and John Cullerton, respectively. Madigan’s daughter-in-law, Lisa, is our Attorney General.
Cullerton’s son has been pulled over numerous times for drunk driving, and in his dad’s state-issued car. Each episode quickly ‘goes away’. Governor Rowner has attempted to cut spending, but the dems refuse to work with him at all. We have not had a budget for nearly two years now, and the two sides are miles apart. Here’s the kicker…Obama flew in here last week and spoke to members of the House and Senate, and on the surface making it appear that he was trying to resolve the state budget issue. But the scuttlebutt afterwards, the word on the street, was that our wonderful president told Cullerton, Madigan and the other socialists NOT to compromise one bit. Of course you also have another Obama buddy, Rahm Emmanuel, as Chicago’s mayor. I think deep down in my heart that Rahm actually runs the state, and takes his marching orders from Valerie Jarrett, who ran a slum housing Section 8 hell hole called Sunnyside for years, and who has ties to now imprisoned Tony Rezco. So, it is one big, happy family and we working people just suck it up until we can move out of Illinois. Stay on top of this one, sir.
Like you I live in this despicable place called ILLANNOY in the Chicago metro area.
You are spot on when you said: “So, it is one big, happy family and we working people just suck it up until we can move out of Illinois.”
After 30 years of living here with decreasing opportunities for viable work, leisure and other ‘amenities’, I have made the decision to move out of this flea infested cesspool this summer – going west to join the ranks of Dave in Colorado – not living in Denver, or JeffCo, Arapahoe Co or Aurora. Staking my claim further south in Doug Co. Heading there with no job. I am desperate enough to do that to get the hell outta here.
Dave mentions some 110 bil in unfunded liability – the lastest figures I had heard from the Civic Federation headed by Lawrence Msall is ILLANNOY is indebted to the tune of over 200 bil in unfunded current liability and growing each and everyday. Illinois Policy mentions similar statistics. Dan Proft’s Upstream Ideas site also has interviews and good information on how we got here and how bad the mess is.
Think too of the mess in Chicago – CPS and the CTU for example. The fact that CPS bonds are paying at premium junk status (I think the lastest was 8.5%!!!! in the latest offering a couple of weeks back), the ongoing blood bath in the inner city – (not uncommon for 5 to10 murders a week here now and growing), the disatisfaction of all colors and stripes re fiscal policy, 1984ish command and control etc. There is just way too much to list. The corruption is so broad and so deep I truly believe it is time to flush this place and start over. It is in a word unfixable.
Edog, there is not enough space here or time to fully explore this. Madigan apparently runs a chicago law firm that for hugh fees protests real estate tax valuations. Cullerton got a relative, long gone, PJ Cullerton who was Cook County Assessor and set property valuations and with Papa “shoot to kill ” Daley ran the Democratic Machine.
I was at a UCLA law school graduation maybe 6 years ago when Jarrett was keynote speaker. First she bragged that she went to stanford, the she promoted Obama, then she advised the graduating class to chuck working in the field of law and do public service.
And we wonder why we are in the problem we have.
As for the pensions, the teachers whet on strike every 3 years for better comp. they got great pension promisses. Then the state constitution was changed to guarantee those benefits which inclde free healthcare. Then the teachers were able to retire at age 55 with spiked wages so they received benefirs as if they retired at age 55. Then when the city and state could not or did not fund those benefit, these educatoes said nary a word and thats where it stands today. Except almost all the teachers are or pretend to be liberals and they picked up their tax free pensions and moved away to double dip while chicago and illinois have to pay for two sets of teachers at the same time.
As i said, scratching the surface.
Most public sector “workers” don’t deserve a dime of those pension payouts anyway. What an absolute scam. These pensions will implode eventually, regardless of the government’s efforts to steal from taxpayers to keep them propped up.
The despicable Soviet State of California is bankrupt. I can’t imagine any state in the union with worse financial condition than California. It’s my personal belief (although no hard data to back it up) that California must be in a worse shape than Illinois. Nothing could be as poorly mismanaged as California. It’s like a literal rabid zoo over here.
What do you feel, between the comparison of financial standings of California versus Illinois?
California has great private companies and tons of foreign investment and what does Illed-nois got? Sky-high taxes and, Cat, Deer, ADM or Sears, or what ever you can think of… other low-tech deadbeat monopolies?
“Obama is a real class act”
Yes a real low class act.
On more thing:
I have come to find that the only ‘export’ that comes from ILLANNOY anymore are the likes of Obama, Jarrett, Jesse Jackson Jr., Durbin, Hitlery and other political xxxx – well I can’t use that word here.
I warned my left leaning buddies across Murika that if obama was elected – this back in 07 /08 that the foul smell of Chicago politics would waft across the country and they didn’t believe me (actually they still don’t). And so here we are – a real class act (clown) hell bent on the hopey changey of the last best hope of freedom.
I have a double MBA relative living in California and we discussed finances in December–he thinks california has solved its problems. The problem of course is thats the headline and accounting gimmicks such as ignoring pension liability makes things look better.
Once the dominos start falling…..when is the issue.
A real POS classless act…ONLY the hillary could follow such trash and still make it look good…….imho
Thank you Libiots. You destroy everything you touch.