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Borrowing billions to lower Chicago's pension debt? Emanuel's finance team is considering it
Chicago Tribune ^ | 8/03/18 | Hal Dardick

Posted on 08/04/2018 10:01:48 AM PDT by Libloather

Mayor Rahm Emanuel’s financial team is considering borrowing billions of dollars to pour into Chicago’s ailing pension funds — a move they contend could save future taxpayers hundreds of millions of dollars but experts say comes with risk.

The idea is to issue bonds at relatively low interest rates and use the money to reduce the city’s $28 billion in pension debt. The pension funds would invest the bond proceeds and ideally earn returns that outpace the interest the city would have to pay on the bond debt.

Issuing so-called pension obligation bonds would be a first for Chicago, which for years shortchanged four city worker pension funds and is now trying to catch up.

Emanuel’s close friend and confidant Michael Sacks, CEO of the GCM Grosvenor asset management firm, floated the concept Thursday at an annual conference for buyers and raters of city debt, sparking mixed reactions among investors across the nation, according to participants.

(Excerpt) Read more at chicagotribune.com ...


TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: bluezones; chicago; debt; emanuel; pension; rahm; taxandspend
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“The market has hated pension bonds for a while here now,” said Ciccarone, president and CEO of Merritt Research Services, noting defaults in Detroit, Puerto Rico and three California municipalities. “Many people got burned on them.”

Bend over so that you won't see it coming.

1 posted on 08/04/2018 10:01:49 AM PDT by Libloather
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To: Libloather
kick that can down the road... Bück dich
2 posted on 08/04/2018 10:04:04 AM PDT by Chode ( We’re America, Bitch!)
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To: Libloather

Our printed, fiat monetary system, with manipulated interest rates, courtesy of the Federal Reserve, is the bedrock foundation of the progressive nanny-state, and the political life-spring for the Democrat Party.


3 posted on 08/04/2018 10:04:30 AM PDT by PGR88
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To: Chode

Taxpayers being forced to borrow other people’s money mega bomb with interest.

What could possibly go wrong?


4 posted on 08/04/2018 10:06:48 AM PDT by TADSLOS (You Don’t Know About Lonely...)
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To: Libloather

Hmm...low interest, high risk, what’s not to like?


5 posted on 08/04/2018 10:08:05 AM PDT by Billthedrill
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To: Libloather

F Emanuel and Chicago.


6 posted on 08/04/2018 10:08:29 AM PDT by Bonemaker (invictus maneo)
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To: PGR88

No monetary system works if there are crooked politicians wrecking it.


7 posted on 08/04/2018 10:12:02 AM PDT by Moonman62 (Give a man a fish and he'll be a Democrat. Teach a man to fish and he'll be a responsible citizen.)
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To: Moonman62
No monetary system works if there are crooked politicians wrecking it.

Correct. So have one instead that's out of their control

8 posted on 08/04/2018 10:13:53 AM PDT by PGR88
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To: Libloather

Al Capone’s lawyer took more responsibility for his misdeeds than all the Chicago politicians put together.

The politicians and the union bosses are the real mobsters.


9 posted on 08/04/2018 10:15:07 AM PDT by Paulie (America without Christ is like a Chemistry book without the periodic table.)
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To: Libloather
Chicago's plan: Get people to buy risky, low-rated bonds that will pay little. Then invest that money in safer investments that will pay more. Well, sure. That's about as good as the gnome's plan from South Park.


10 posted on 08/04/2018 10:15:14 AM PDT by Leaning Right (I have already previewed or do not wish to preview this composition.)
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To: Paulie

Big Al would have kept Chicago solvent at least.


11 posted on 08/04/2018 10:18:09 AM PDT by wally_bert (Just call me Angelo or babe.)
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To: Libloather

I’d make them secure the bonds with O’Hare. That’s about the only Chicago has that I’d want when they default.


12 posted on 08/04/2018 10:19:22 AM PDT by ameribbean expat (Socialism is like a nude beach - - sounds great til you actually get there. -- David Burge.)
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To: Libloather
Borrowing more money to pay off debt? Isn't that what they used to call a "Ponzi scheme"?
 
13 posted on 08/04/2018 10:19:44 AM PDT by Governor Dinwiddie ("Nature, Mr. Allnut, is what we are put in this world to rise above.")
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To: Libloather
Chicago is a beautiful city that could grow its way out of this, but not under this kind of Democrat ‘leadership’. There are multiple steps that need to be taken, including:

1. A concerted and aggressive effort to rid the city of gangs. This might require unusual measures, including the involvement of the National Guard and/or military.

2. Substantially lowering the tax burden on businesses/corporations that could locate there. This could include a ‘tax-free’ incentive period for entrepreneurs and start ups.

3. Measures to counter the entrenched Chicago cronyism, and political corruption.

4. Make Chicago, and Illinois ‘right to work’, and counter the influence of corrupt labor unions.

5. Revitalize as much of the South Side as possible. For example, there is a large swath of lakefront property where US Steel Southworks used to be. This is prime real estate, and if developed properly could be a nidus of growth for the South Side that would grow beyond it's boundaries. This would require, of course, efforts to make these areas safer. Given that the University of Chicago is down there, it could also be targeted for biotech development and other types of tech - kind of like the Research Triangle in North Carolina. This kind of growth could be linked to increased educational initiatives and programs in the local community.

This is just a start. That said, it won't happen, because Illinois politics is corrupt and the Democrats and labor unions are entrenched.

14 posted on 08/04/2018 10:20:03 AM PDT by neverevergiveup
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To: Libloather
relatively low interest rates

No thanks. Price them to the risk, and I might be interested. Say 11%?

15 posted on 08/04/2018 10:21:22 AM PDT by PAR35
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To: Libloather

There are lots of Pauls in this world who would be gone were it not for robbed Peters


16 posted on 08/04/2018 10:22:13 AM PDT by bert ((K.E. N.P. N.C. +12) Sanctuary is Sedition)
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To: Libloather

There ought to be a law against something like this . . .


17 posted on 08/04/2018 10:22:56 AM PDT by Behind the Blue Wall
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To: Libloather
The idea is to issue bonds at relatively low interest rates and use the money to reduce the city’s $28 billion in pension debt. The pension funds would invest the bond proceeds and ideally earn returns that outpace the interest the city would have to pay on the bond debt.

Ironically, assuming anyone is stupid enough to buy a CHICAGO UNDERFUNDED DEFINED BENEFITS PENSION Bonds returning LOW INTEREST, this plan would work only as long as President Trump can control US Economic Policy (return of Rat control will crash the economy), and only if Chicago refused any PC investments, which they will certainly require.

This brilliant plan will more than double the size of the coming financial collapse of Chicago, which the citizens and investors well deserve.

18 posted on 08/04/2018 10:24:03 AM PDT by Navy Patriot (America NEEDS Mob Rule, another European and Mid East World War and a universal Draft)
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To: bert

A government that robs Peter to pay Paul can always depend on the support of Paul. George Bernard Shaw
Read more at: https://www.brainyquote.com/quotes/george_bernard_shaw_128084


19 posted on 08/04/2018 10:25:06 AM PDT by abb ("News reporting is too important to be left to the journalists." Walter Abbott (1950 -))
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To: Libloather

Municipalities like Chicago have let unionized government employees put them so far in debt that there is nothing that can save them.

Borrowing billions only increases the indebtedness and postpones the collapse.


20 posted on 08/04/2018 10:25:32 AM PDT by Vlad The Inhaler (Liberalism is the philosophy of sniveling brats. - P.J. ORourke)
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