Tuesday, November 30, 2010

Pittsburgh, you're no Vallejo

No time to parse this as it deserves for us, but big developments in the bankruptcy of Vallejo, California.  Some may recall when I compared the fiscal state of Pittsburgh to Vallejo.  I have not updated that, but the basic situation will not have changed much.  If there is a change, some of the city's GO debt has been paid down, but the calculated pension obligation has jumped up. The bottom line was that when looking at total debt and liability, Vallejo in bankruptcy is in nowhere near as dire shape as we are in no matter what we like to think...  Compared to Vallejo we would be worse off even after this whole notional parking lease were to go through by the way.

The news is there is finally a proposed plan to have Vallejo emerge from bankruptcy.  I am sure I will try to parse all this better in the future, but the short version I see (via first link above) has these key points:  1) unsecured creditors paid 10 cents on the dollar (ouch) 2) at least a 3 year moratorium on bond interest payments and possible other bond debt restructuring and 3) a big haircut on retiree health care benefits.

Probably not news in this, but I notice the confirmation that the bondholders of city debt are being paid by the bond insurers. 

and as a former battleship sailor I am obliged to point out what may be bigger news out of Vallejo today.  They are making efforts to bring the retired battleship the USS Iowa to Vallejo.  If you thought the LST visit was cool...  can you imagine?  If only the rivers were deeper and the bridges higher.   The lesson though is that life goes on in bankruptcy, for cities as well as people and more than a few firms.

4 Comments:

Anonymous Rex said...

I suppose the displacement of even a WWII-era battleship would essentially leave it beached in any of our Three Rivers, even if we could clear the bridges.....

You're right..... If only....

Wednesday, December 01, 2010 1:11:00 AM  
Anonymous MH said...

We could probably bring in one of the main batteries by rail or barge. Put in out Mt. Washington and I think the whole county would be in range.

Wednesday, December 01, 2010 10:56:00 AM  
Anonymous The Wiz said...

I took a tour of a WWII flat top in Charlseton SC. It would be great to tour a battleship.

C; which ship did you serve on?

Wednesday, December 01, 2010 12:25:00 PM  
Anonymous MH said...

The USS Alabama is still in Mobile. I remember touring it as a kid.

Wednesday, December 01, 2010 1:18:00 PM  

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