by John Galt
June 27, 2012 05:20 ET
As per my original article titled “Municide” from 2008 and the warnings of Meredith Whitney, the specter of a massive wave of municipal bankruptcies may have been delayed by the Federal Government’s largess but the inevitable can never be prevented when the math does not work. With outrageous pension obligations and plunging revenues due to the housing crash in addition to insane spending by city and county governments who think they have little kingdoms impervious to market forces, the crisis has come full circle and the bankruptcy filings will accelerate.
The filing by Jefferson County, AL might seem like a nightmare but the action taken last night by Stockton, California signals a new phase in the crisis as this story states from Reuters:
Needless to say, Detroit, Michigan and many other cities are eager to follow suit.