Risk by other means
Would you want to foreclose on a sewer?
Lehman's bankruptcy involves such huge $ amounts that everyone's finances could be impacted. The Vallejo bankruptcy can clear a path other cities may follow, but also on the verge is a bankruptcy of the Jefferson County sewer system. Sounds boring.. but the $ amounts involved are in the $billions and you can draw a lot of parallels between plight of local water systems here and how Jefferson County got into its current predicament. To meet clean water standards they invested in significant infrastructure investment that left then with massive debts they have now been unable to pay off. Likewise the water and sewer systems here are facing similar EPA consent orders that will only be addressed with equally massive investments. But that is an issue unto itself. For the moment the financial linkages are worth noting.
Yesterday Jefferson County was sued by none other than our own Bank of New York/Mellon which holds (see update below) warrants for most of the system's $3+Billion debt. I think BoNY Mellon is not at that much risk itself in that most (but not all) of the debts in question are insured, but still it highlights the connectedness of the myriad problems in financial markets these days. We may be the Birmingham of the North in more ways than you can imagine.
update: I said I didn't think there was much risk to Bank of NY/Mellon and I was at least half right. A note direct from the folks at the bank tells me:
"Bank of New York Mellon serves as trustee in the Jefferson County case. It has no financial exposure whatsoever. It's simply acting on behalf of the majority holders (the bond insurers) in its role."