Friday, February 05, 2010

How The Bankruptcy of Harrisburg, Pennsylvania Affects Me, Personally.

~~~~~~~~~~~~~click on map to embiggen~~~~~~~~~~~~~
Seriously. It does.

I’ve been to Harrisburg, capital city of Pennsylvania, a few times. Mainly driving through it and on to somewhere else. But one time we actually stayed there. It was foggy going through the Pennsylvania mountains on our way to South Carolina so we found this little motel and slept, dead to the world, from the sheer exhaustion of gripping the wheel and squinting our eyes to see through the fog for many hours. The breakfast we all remember, it was that good. There was fabulous ham from a local farm and eggs bennie. And home-made bread. I measure my life by the great meals I’ve eaten. I come from a long line of good grubbers.

But that’s beside the point.

Harrisberg is now but the canary in the coalmine in our new world of cities collapsing under unsustainable debt. And through the overextended tentacles of financial engineering and global credit defaults, we are all connected.

The latest fright comes from Harrisburg, the capital of Pennsylvania. The city is considering seeking bankruptcy protection—as well as tax hikes and asset sales—to address $68 million in debt service payments due this year.


Carol Cocheres, bond counsel for the incinerator’s operator, the Harrisburg Authority, told the city council at a Dec. 14 hearing that the city is already in danger of legal action for payments that were missed last year on $288 million in debt it has guaranteed with its full faith and credit.

“There’s never been a default like this in Pennsylvania municipal history,” she said. “This is all new territory.”

Cocheres told council members that by skipping payments that are made on behalf of the authority, the city risks being sued and ordered to raise taxes or fees by Assured Guaranty Municipal Corp., formerly FSA Insurance, which has insured the bonds, or by the deal’s trustee, TD Bank.
Read all about it here:

And my point?

You see, way out here on the edge of the Atlantic in Newfoundland, TD Canada Trust Bank is my bank.

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Blogger The Green Stone Woman said...

It's a small, interconnected world after all, isn't it? Scary!

Fri Feb 05, 02:24:00 AM GMT-3:30  
Anonymous nick said...

Wow, are you saying your bank TD may go bankrupt because of the Harrisburg insolvency? Does that mean you might lose a lot of money? All these financial connections between different organisations are scary. When one goes down, you can get a massive domino effect.

Fri Feb 05, 05:36:00 AM GMT-3:30  
Blogger The Poet Laura-eate said...

Change banks while there's still time WWW!

Wow, what if Harrisburg ends up being repossessed?

And by what?

Fri Feb 05, 10:44:00 AM GMT-3:30  
Blogger Wisewebwoman said...

More than ever, GSW, what happens at the extreme outskirts of the world affects us all.

Fri Feb 05, 11:24:00 AM GMT-3:30  
Blogger Wisewebwoman said...

Oh I think it far too big to do that, but I really wonder what other US cities it has as trustee. But it does make one wonder if banks are safe at all and where does one put one's monthly stipend?
Anyone got gold to sell?

Fri Feb 05, 11:26:00 AM GMT-3:30  
Blogger Wisewebwoman said...

Maybe I'll be a stakeholder (though minescule!) in Harrisburg yet. LOL.

Fri Feb 05, 11:27:00 AM GMT-3:30  
Blogger Twilight said...

Bad, inefficient management is a fact of life in the US these days.
I don't fully understand the situation to be honest....all I can think of to comment is to quote Dickens'
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Hope difficulties won't affect you personally though, WWW.

Wish we could find a motel like the one you describe with yummy breakfast on offer instead of the terrible cardboard bread and pastries of the average "continental" breakfast on offer in motels generally. I often wonder which "continent" they refer to! ;-)

Fri Feb 05, 12:06:00 PM GMT-3:30  
Blogger Twilight said...

(Forgot to say Dickens' Mr. Micawber)

Fri Feb 05, 12:07:00 PM GMT-3:30  
Blogger Wisewebwoman said...

Oh T:
Were there ever words as true as Dickens. And to think that a garbage incinerator started poor Harrisburg on the slippery slope of destitution! I'm going to write for the local paper on this subject of garbage, we are literally and figuratively drowning in it.
Re Hburg Bfast:I'm going back to when the kids were younger and American service (still is, I suspect) was so much better than Canadian.
And I so agree on that abomination called 'continental'.

Fri Feb 05, 12:41:00 PM GMT-3:30  
Blogger Annie said...

Bankruptcy is the coming thing at both the state and municipal levels in the USA, and probably here too. In some cases mismanagement, but in a lot of cases just the next round of the current economic breakdown. I suspect that Harrisburg is as much a victim of "Wall Street and all the banks, law firms, advisers and consulting firms" as Jefferson County, Alabama (soon-to-be largest US municipal bankruptcy).

Don't bother changing banks, they're all involved one way or another. We are so screwed.

So fahgedda boutit, enjoy that good grub while you can, we is all gonna die...

Speaking of grub, when are we doing lunch again? 8-D

Fri Feb 05, 02:15:00 PM GMT-3:30  
Blogger Wisewebwoman said...

I think that governments are too terrified of letting us know what's really going on, Annie. It it totally the emperor wearing no clothes.
Even out here where we're rolling in money, all the plans are for EXPANSION rather than RETRENCHING.
I'm in town from 14th - 28th of this month, what is your schedule like. Are you on FB?

Fri Feb 05, 02:55:00 PM GMT-3:30  
Blogger Jo said...

I do find it utterly mind boggling that a city or state can be bankrupt, but I can see how it can happen. (particularly if the authority has investments that then go bad - a huge number of UK local authorities had issues when money that they had invested ended up in Icelandic banks which then went under)

I feel sorry for the folk who live there - they will end up having higher taxes (which will inevitably hit the worst off the most), and the city is likely to have to make people redundant - and I can't imagine that the high flying execs are going to do themselves out of a job when there's all those binmen and social workers who aren't necessary...

Sat Feb 06, 12:53:00 AM GMT-3:30  
Blogger Wisewebwoman said...

It's funny this Jo, as I'm currently writing on the major mistakes other cities have made in this unstoppable and catastrophic expansion which can only mean unpayable debt and the destruction of the infrastructure of cities.
And the Fearless Leaders, as you say, will dispose of the little people rather than cut back on their own astronomical salaries.

Sat Feb 06, 01:24:00 PM GMT-3:30  

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