Friday, August 7, 2009

Shylock comes for his pound of flesh

Jefferson County is bankrupt. It laid off two-thirds of its employees this week and its government is close to being non-existent. The crisis was caused by the county's decision to refinance its water and sewer bonds with financial derivatives known as interest-rate swaps, something Jackson is considering right now (see posts on this subject in lower sidebar). The Wall Street Journal reported Jefferson County's woes are of no concern to Wall Street as it wants not just the blood but the turnip also:
NEW YORK (Dow Jones)--The Bank of New York Mellon Corp. (BK) Monday filed suit against Alabama's financially-strapped Jefferson County, seeking to expedite payments for holders of the county's $3.2 billion in outstanding debt.
The bank, which is the trustee for the owners of Jefferson County's auction-rate and variable-rate debt issued by the sewer system, argues the county failed to pay $331.7 million in principal payments on warrants due for redemption since June 2008.
In a complaint filed this week with the Circuit Court of Jefferson County, BNY Mellon asked to appoint a receiver, or custodian, for the county's sewer system. It also seeks a court order that would require the county to raise sewer fees and levy other charges to pay bondholders.
BNY Mellon also says in the suit that the county has failed "to operate the system in a manner that will generate net revenues sufficient to service the county's warrant obligations," and that the work on the county's sewer system has been "fraught with fraud and abuse."
The most densely populated county in Alabama, Jefferson's finances have been in dire straights after it placed interest rate bets using derivative instruments that backfired. The derivatives were meant to help the county lower its financing costs.
Since last summer, the county has been struggling to meet payments and keep up with services. In an effort to raise funds, the county tried to impose an occupational tax that was ruled invalid by a circuit court judge earlier this year.
As a result, this week Jefferson County furloughed roughly one-third of its 3,000 employees.
The 36-page lawsuit points out that 21 former county officials and three former county commissioners have been indicted or convicted of crimes related to work on the system.
The Bank of New York Mellon lawsuit follows a similar lawsuit last fall in the U.S. District Court for the Northern District of Alabama, involving the bank as well as municipal bond insurance companies Financial Guaranty Insurance Company, Syncora Guarantee Inc. and XL Capital Assurance. The court said in June it lacked jurisdiction to grant the request.
Standard & Poor's Ratings Service Monday warned it could lower its junk bond rating on the county's sewer system revenue bonds to default status if the county misses principal or interest payments on outstanding auction-rate bonds. S&P in April 2008 lowered its rating to default status on certain of the county's variable-rate debt because it missed a principal payment.
Moody's Investors Service has a junk rating on all of Jefferson County's outstanding sewer revenue debt.

Harvey: Hope you are paying attention.


Anonymous said...

No prob... just have Obama cut a check for 3.5 billion and the County will show a surplus.

Anonymous said...

Uncle Bennie will get him a grant.

Anonymous said...

Here is an update on the occupational tax. Nothing would empty out Jackson faster than such an approach.

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS