Sunday, August 02, 2009

Cheshire's Political Class LOVES those credit ratings, while America's largest pension fund sues them for "wildly inaccurate" risk assessments

From the WRAs Wednesday paper:

The economy has emerged as the leading campaign issue for both parties.

I agree, but begin to diverge here:

"Every other issue is a minor and secondary issue," said Democratic Town Councilman Michael Ecke, who was nominated to a fifth term.

I can think of a number of issues that I certainly would not call "minor." Good to know though that he feels the turf is a minor issue. Though I'm not quite sure why he feels the pool is a minor issue. Perhaps it's the expectations game? If he keeps saying the pool is a minor issue, maybe he can wish it away? That would be interesting.

Ecke said the town's budget is headed in the right direction. The town has received two bond rating increases in as many years.

Now that is almost laughable, except that it's so troubling. This continued nonsense about these ratings upgrades being put forward as evidence that the town is on a sound financial footing is a load of BS. Maybe Mike should read this Bloomberg article (by David Watts Barton and Karen Gullo):

S&P, Fitch and Moody’s face investor lawsuits and criticism by lawmakers for grading mortgage bonds too high and maintaining the ratings months after home-loan defaults surged in 2007. The California Public Employees’ Retirement System, or Calpers, the largest U.S. public pension fund, sued July 9 over $1 billion in losses it blamed on “wildly inaccurate” risk assessments.

Ronald Grassi, a retired California attorney, and Sally Grassi, a retired teacher, sued the New York-based companies in January for negligence, claiming they gave high ratings to the Lehman bonds to curry favor with the investment bank, which filed the biggest bankruptcy in U.S. history in September.

That's right. The ratings agencies are run by a bunch of lying cheats, IMO. They were given a blank check when Congress enshrined them in law... then they abused their power for their own personal gain. Which frankly, is not surprising. The dimwitted Gang of 535 should have expected this to happen. So it's really Congress and the public policy they created that enabled this to happen. The ratings agencies simply took advantage of it. Nonetheless...

The notion that the town is in good financial stead because The Vaunted Ratings Agencies say-so is little more than a perpetuation of the fantasy world that was created by America's Political Class. Personally, I think the town is in OK financial shape. We certainly could and should be doing much better though. For instance, we could have been addressing our defined benefits pension plans years ago. But instead, "we" stuck our head in the sand knowing the real problems would come to a head after "we" are given the title Honorary Mayor!

Three months and counting...

Tim White


Anonymous said...

It is time to do away with that stupid, "Honorary Mayor" title anyway. It seems to be something that the present majority feels is important and gives them some super powers.

How does our resident "CPA", budget chair not see that we are not in good fiscal shape?
I have seen this with other municipalities where one regime is touting how fiscally strong they are until they are voted out of office and the next regime finds that they are bordering on bankruptcy.
It is easy to skew the ratings and books to look favorable, and I am sure that is what the Dems will be running their campaigns on. We just need to show the public the truth.

Anonymous said...

Where does he say turf and the pool are minor or secondary items? Sounds like you are trying to slander him and take his statement out of context.

If that is the way you are going to run your campaign, save your money because the voters of Cheshire will not stand for it.

Anonymous said...

Read the article.
Ecke says the Economy is the main issue (which is budgets and spending), and everything else is minor (which is turf, pool, etc.)

I don't know how you can take that out of context.

It sounds like you are trying to twist it.

Perhaps your canidate should not be so vague and answer the real questions:
Why did he support the $10 right of way?
Why is he in support of turf in a down economy and who will pay for the maintenance and future replacement?
What do we do with the money pit pool that was suppoes to be self sufficine and is costing us nearly a half million dollars a year on top of figuring out a permanent structure?
Why can't they answer these questions?
Nice to see he doesn't feel the pool is important enough to make it a campaign issue. For many of us it is.