On June 21 the editorial board of the Washington Post, long a propaganda instrument believed to be in cahoots with the CIA and the deep state, called for more sanctions and more pressure on Russia.
One second’s thought is sufficient to realize how bad this advice is. The orchestrated demonization of Russia and its president began in the late summer of 2013 when the British Parliament and Russian diplomacy blocked the neoconned Obama regime’s planned invasion of Syria. An example had to be made of Russia before other countries began standing up to Washington. While the Russians were focused on the Sochi Olympic Games, Washington staged a coup in Ukraine, replacing the elected democratic government with a gang of Banderite neo-nazi thugs whose forebears fought for Hitler in World War II. Washington claimed it had brought democracy to Ukraine by putting neo-nazi thugs in control of the government.
Washington’s thugs immediately began violent attacks on the Russian population in Ukraine. Soviet war memorials were destroyed. The Russian language was declared banned from official use. Instantly, separatist movements began in the Russian parts of Ukraine that had been administratively attached to Ukraine by Soviet leaders. Crimea, a Russian province since the 1700s, voted overwhelmingly to seperate from Ukraine and requested to be reunited with Russia. The same occurred in the Luhansk and Donetsk regions.
These independent actions were misrepresented by Washington and the presstitutes who whore for Washington as a “Russian invasion.” Despite all facts to the contrary, this misrepresentation continues today. In US foreign policy, facts are not part of the analysis.
The most important fact that is overlooked by the Washington Post and the Russophobic members of the US government is that it is an act of insanity to call for more punishment and more pressure on a country with a powerful military and strategic nuclear capability whose military high command and government have already concluded that Washington is preparing a surprise nuclear attack.
Are the Washington Post editors trying to bring on nuclear armageddon? If there was any intelligence present in the Washington Post, the newspaper would be urging that President Trump immediately call President Putin with reassurances and arrange the necessary meetings to defuse the situation. Instead the utterly stupid editors urge actions that can only raise the level of tension. It should be obvious even to the Washington Post morons that Russia is not going to sit there, shaking in its boots, and wait for Washington’s attack. Putin has issued many warnings about the West’s rising threat to Russian security. He has said that Russia “will never again fight a war on its own territory.” He has said that the lesson he has learned is that “if a fight is unavoidable, strike first.” He has also said that the fact that no one hears his warnings makes the situation even more dangerous.
What explains the deafness of the West? The answer is arrogance and hubris.
As the presstitute media is incapable of reason, I will do their job for them. I call for an immediate face-to-face meeting between Trump and Putin at Reykjavik. Cold War II, begun by Clinton, George W. Bush, and Obama, must be ended now.
Why hasn’t President Trump long ago ordered all intercepts of Russian chatter gathered, declassified, and made public? Why hasn’t Trump launched a criminal prosecution against John Brennan, Susan Rice, Comey, and the rest of the hit squad that is trying to destroy him?
Why has Trump disarmed himself with an administration chosen by Russiaphobes and Israel?
As David Stockman writes, Trump “is up against a Deep State/Dem/Neocon/mainstream media prosecution” and “has no chance of survival short of an aggressive offensive” against those working to destroy him. But there is no Trump offensive, “because the man is clueless about what he is doing in the White House and is being advised by a cacophonous coterie of amateurs and nincompoops. So he has no action plan except to impulsively reach for his Twitter account.”
Our president twitters while he and Earth itself are pushed toward destruction.
Three weeks ago, the US military conducted its first successful test of a ground-based anti-intercontinental ballistic missile system that had cost more than $40 billion to develop, with the Pentagon lauding the test as “an incredible accomplishment.”
But the Navy had no such luck on Wednesday following an unsuccessful test of a new ship-based anti-ICBM projectile. As the Missile Defense Agency announced in a press release, the test of the new SM-3 Block IIA missile - which was conducted jointly by the US and Japan's Ministry of Defense – had failed.
The test, conducted Wednesday, was the second intercept test of the SM-3, and the first to yield an unsuccessful result. The previous test was conducted in February. The missile is being designed jointly by the US and Japan with the explicit intent of countering the threat posed by North Korea's increasingly sophisticated nuclear program, according to the MDA.
"The U.S. Missile Defense Agency and the Japan Ministry of Defense conducted a development flight test today of a new Standard Missile-3 (SM-3) Block IIA missile off the coast of Hawaii. A planned intercept was not achieved.
The SM-3 Block IIA is being developed cooperatively by the U.S. and Japan to defeat medium- and intermediate-range ballistic missiles. This is a new, developmental interceptor that is not yet fielded by either country.
At approximately 7:20 p.m., Hawaii Standard Time, June 21 (1:20 a.m. Eastern Daylight Time, June 22), a medium-range ballistic target missile was launched from the Pacific Missile Range Facility at Kauai, Hawaii. The USS John Paul Jones (DDG 53) detected and tracked the target missile with its onboard AN/SPY-1 radar using the Aegis Baseline 9.C2 weapon system. Upon acquiring and tracking the target, the ship launched an SM-3 Block IIA guided missile, but the missile did not intercept the target.
Program officials will conduct an extensive analysis of the test data. Until that review is complete, no additional details will be available."
This was the fourth development flight test using an SM-3 IIA missile, and the second intercept test. The previous intercept test, conducted in February 2017, was successful.
Though currently still in the development and test phase, the SM-3 Block IIA interceptor is being designed to operate as part of the Aegis Ballistic Missile Defense system. Currently, the Aegis BMD system operates with the SM-3 Block 1A, SM-3 Block 1B, and SM-6 interceptors.
The Pentagon announced on May 31 that it had succeeded in thwarting a simulated ICBM attack using its Ground-based Midcourse Defense (GMD) system, which the military hailed that as “an incredible accomplishment.”
Riki Ellison, founder of the Missile Defense Advocacy Alliance, described the test as "vital" prior to launch. "We are replicating our ability to defend the United States of America from North Korea, today," Ellison said.
That test was the first of its kind in nearly three years, and the first test ever to target an intercontinental-range missile like North Korea is developing. Full text of the news release from the Pentagon can be found below:
HOMELAND MISSILE DEFENSE SYSTEM SUCCESSFULLY INTERCEPTS ICBM TARGET
The U.S. Missile Defense Agency, in cooperation with the U.S. Air Force 30th Space Wing, the Joint Functional Component Command for Integrated Missile Defense and U.S. Northern Command, today successfully intercepted an intercontinental ballistic missile target during a test of the Ground-based Midcourse Defense (GMD) element of the nation's ballistic missile defense system.
This was the first live-fire test event against an ICBM-class target for GMD and the U.S. ballistic missile defense system.
During the test, an ICBM-class target was launched from the Reagan Test Site on Kwajalein Atoll in the Republic of the Marshall Islands. Multiple sensors provided target acquisition and tracking data to the Command, Control, Battle Management and Communication (C2BMC) system. The Sea-Based X-band radar, positioned in the Pacific Ocean, also acquired and tracked the target. The GMD system received the target tracking data and developed a fire control solution to intercept the target.
The primary difference between the two anti-ICBM systems is that the SM-3 Block IIA missile is designed to be launched from a ship, providing the US with more flexibility when deploying it. The GMD system tested by the Pentagon last month is, as its name suggests, ground-based.
We now wait to see how the North will respond - specifically, whether the hermit kingdom will follow through with what would be its 10th ballistic missile test since the start of the year. The US anti-ICBM test follows the death of University of Virginia student Otto Warmbier, who passed away earlier this week after being released to the US for medical reasons. Warmbier had reportedly been in a coma for a year after being arrested in North Korea. His crime? He was caught stealing a North Korean propaganda poster.
So let’s start with an obvious point about the whole Russia fiasco…
Namely, there is no “there, there.” First off, the president has the power to declassify secret documents at will. But in this instance he could also do that without compromising intelligence community (IC) “sources and methods” in the slightest.
That’s because after Edward Snowden’s revelations in 2013, the whole world was put on notice — and most especially Washington’s adversaries — that it collects every single electronic digit that passes through the worldwide web and related communications grids.
Washington essentially has universal and omniscient SIGINT (signals intelligence). Acknowledging that fact by publishing the Russia-Trump intercepts would provide new knowledge to exactly no one.
Nor would it jeopardize the lives of any American spy or agent (HUMINT). It would just document the unconstitutional interference in the election process that had been committed by the U.S. intelligence agencies and political operatives in the Obama White House.
That pales compared to whatever noise comes out of Langley (CIA) and Ft. Meade (NSA). And I do mean noise.
Yes, I can hear the boxes on the CNN screen harrumphing that declassifying the “evidence” would amount to obstruction of justice! That is, since Trump’s “crime” is a given (i.e. his occupancy of the Oval Office), anything that gets in the way of his conviction and removal therefrom amounts to “obstruction.”
Given that he is up against a Deep State/Democratic/Neoconservative/mainstream media prosecution, the Donald has no chance of survival short of an aggressive offensive of the type I just described.
But that’s not happening because the man is clueless about what he is doing in the White House. And he’s being advised by a cacophonous coterie of amateurs and nincompoops. So he has no action plan except to impulsively reach for his Twitter account.
That became more than evident — and more than pathetic, too — when he tweeted out an attack on his own Deputy Attorney General, Rod Rosenstein. At least Nixon fired Elliot Richardson (his Attorney General) and Bill Ruckelshaus (Deputy AG):
I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt.
Alone with his Twitter account, clueless advisors and pulsating rage, the Donald is instead laying the groundwork for his own demise. Were this not the White House, this would normally be the point at which they send in the men in white coats with a straight jacket.
Indeed, that’s essentially what the Donald’s so-called GOP allies on the Hill are actually doing.
RussiaGate is a witch hunt like few others in American political history. Yet as the mainstream cameras and microphones were thrust at one Congressional Republican after another following the Donald’s outburst quoted above, there was nary an echo of agreement.
Even Senator John Thune, an ostensible Swamp-hating conservative, had nothing but praise for Special Counsel Robert Mueller, that he would fairly and thoroughly get to the bottom of the matter.
No he won’t!
Mueller is a card-carrying member of the Deep State who was there at the founding of today’s surveillance monster as FBI Director following 9/11. Since the whole $75 billion apparatus that eventually emerged was based on an exaggerated threat of global Islamic terrorism, Russia had to be demonized into order to keep the game going — a transition that Mueller fully subscribed to.
So he will “find” extensive Russian interference in the 2016 election and bring the hammer down on the Donald for seeking to prevent it from coming to light. The clock is now ticking. And his investigatory team is being packed with prosecutorial killers with proven records of thuggery. They’re determined to find crimes that create fame and fortune for prosecutors — even if the crime itself never happened.
For example, Mueller’s #1 hire was the despicable Andrew Weissmann. This character had led the fraud section of the department’s Criminal Division and served as general counsel to the F.B.I. when Mueller was its director. And more importantly, Weissmann was the driving force behind the Enron task force — the most egregious exercise in prosecutorial abuse and thuggery in 100 years.
Meanwhile, the GOP leadership could not be clearer about what is coming down the pike.
They are not defending Trump with even a hint of the vigor and resolve that I recall from the early days of Tricky Dick Nixon’s ordeal. Of course, Nixon didn’t survive anyway.
Instead, it’s as if Paul Ryan, Mitch McConnell, et al. have offered to hold his coat, while the Donald pummels himself with a 140-character Twitter Knife that is visible to the entire world.
So there should be no doubt. A Great Big Coup is on the way.
But here’s the irony of the matter: Exactly four years ago in June 2013 no one was seriously demonizing Putin or Russia. In fact, the slicksters of CNN were still snickering about Mitt Romney’s silly claim during the 2012 election campaign that Russia was the greatest security threat facing America.
But then came the Syrian jihadist false flag chemical attack in the suburbs of Damascus in August 2013 and the U.S. intelligence community’s flagrant lie that it had proof the villain was Bashar Assad.
To the contrary, it subsequently became evident that the primitive rockets that had carried the deadly sarin gas, which killed upwards of 1500 innocent civilians, could not have been fired from regime held territory. The rockets examined by UN investigators had a range of only a few kilometers, not the 15-20 kilometers from the nearest Syrian base.
In any event, President Obama chose to ignore his own red line and called off the bombers. That in turn paved the way for Vladimir Putin to persuade Assad to give up all of his chemical weapons — a commitment he fully complied with over the course of the next year.
Needless to say, in the eyes of the neocon War Party, this constructive act of international statesmanship by Putin was the unforgivable sin. It thwarted the next target on their regime change agenda — removal of the Assad government in Syria as a step toward an ultimate attack on its ally, the Shiite regime of Iran.
So it did not take long for the Deep State to retaliate. While Putin was basking in the glory of the 2014 winter Olympics at Sochi, the entire apparatus of Imperial Washington — the CIA, the National Endowment for Democracy, the State Department and a long string of Washington funded NGOs — was on the ground in Kiev assisting the putsch that overthrew Ukraine’s constitutionally elected President and Russian ally.
From there, the Ukrainian civil war and partition of Crimea inexorably followed, as did the escalating campaign against Russia and its leader.
So as it turned out, the War Party could not have planned a better outcome — especially after Russia moved to protect its legitimate interests in its own backyard resulting from the Washington-instigated civil war in Ukraine. That included protecting its 200-year old naval base at Sevastopol in Crimea.
The War Party simply characterized these actions falsely as acts of aggression against Russia’s European neighbors.
There is nothing like a demonized enemy to keep the $700 billion national security budget flowing and the hideous Warfare State opulence of the Imperial City intact. So why not throw in an allegedly “stolen” U.S. election to garnish the case?
In a word, the Little Putsch in Kiev is now begetting a Great Big Coup in the Imperial City.
This is a history-shattering development, but don’t tell the boys and girls and robo-machines on Wall Street.
Pathetically, they still think it’s game on.
So if there was ever a time to take advantage of the day traders and robo-machines which linger in the casino, now would be the occasion to sell, sell, sell. Once the breakdown starts there will be no respite from the implosion.
After a bit of a lull for the past couple of months, the march toward war appears to be accelerating once again. On Monday the U.S. military shot down yet another Syrian aircraft, and it appears that President Trump’s patience with North Korea’s nuclear program may have run out. Unlike our wars in Iraq and Afghanistan, the situations in Syria and North Korea both have the potential of sparking a much wider conflict. If we end up in a war with Syria, it is very likely that we will ultimately be fighting the Russians and the Iranians as well. On the other side of the globe, a war with North Korea could also potentially draw in China. This happened in the first Korean War, and it could easily happen again. It is understandable that the Trump administration wants to be tough with both Syria and North Korea, but we need to be extremely careful about the use of military force because one wrong move could potentially spark World War 3.
For the last couple of months, the Trump administration has been relying on China to put pressure on North Korea to end their nuclear weapons program. But now it appears that Trump has given up on that. On Monday, he posted the following message on his Twitter account…
While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!
That certainly sounds quite ominous.
Is he saying that he has completely given up on a diplomatic solution?
And this tweet comes at a time when it is being reported that it looks like North Korea may be preparing for a new underground nuclear test. If North Korea goes through with another nuclear test, it is unclear at this point how the Trump administration will respond. The following comes from CNN…
The officials said it is not yet clear if the activity indicates a sixth nuclear test is imminent, but noted there is concern that North Korea could set off a test during Wednesday’s visit to Washington by top Chinese diplomats and military officials.
US officials have known that the site is ready to conduct an underground test for some time.
Two senior US officials with direct knowledge also told CNN that military options for North Korea have recently been updated, and will be presented to President Donald Trump for a decision to act if there is a nuclear test.
A military strike on North Korea would likely be completely disastrous. The North Koreans reportedly have quite a few nukes, and even if we somehow located and destroyed every single one of them before they could launch any, the North Koreans would still be able to respond with their vast stockpiles of chemical and biological weapons. For much more on why a direct strike on North Korea would not end well, please see my previous articles here and here.
A US F-15E fighter jet shot down a pro-Syrian regime drone near At Tanf, Syria, on Monday, two US officials told CNN, the third downing of a pro-regime aircraft this month.
The US-led international coalition later confirmed the incident in a statement, saying the armed drone was downed “after it displayed hostile intent and advanced on Coalition forces” that “were manning an established combat outpost to the northeast of At Tanf where they are training and advising partner ground forces in the fight against ISIS.”
If we continue to shoot down Syrian aircraft, eventually there is going to be a response. And once a conflict erupts, we could easily find ourselves engaged with the Russian military.
At this point there is absolutely no reason for us to be in Syria. ISIS forces are on their last legs, and we could easily let Russia and Iran finish them off.
By sticking around in Syria, we are playing a very dangerous game. According to Connecticut Senator Chris Murphy, if we allow things to continue to escalate we could easily find ourselves involved in a full-blown regional war…
According to Fox News, this is the second time the US has shot down an Iranian drone in less than a month. It also marks the fifth time since late May the U.S. military has bombed pro-Syrian forces in southern Syria.
Connecticut Sen. Chris Murphy described the attack as “a dangerous escalation” of tensions between the US and the main backers of the Syrian regime, Russia and Iran.
Murphy told CNN that if the US doesn’t stop the attacks, the situation could escalate into an armed conflict between the two sides, who both claim to be fighting ISIS.
We haven’t seen things this tense between the United States and Russia since the height of the Cold War. Anti-Russian hysteria in Washington is completely out of control, and the Russians are certainly not helping things either. For example, according to Fox News a Russian Su-27 came “within 5 feet” of an American recon plane over the Baltic Sea on Monday…
An armed Russian fighter jet buzzed a U.S. Air Force reconnaissance aircraft in the Baltic Sea on Monday, two U.S. officials told Fox News.
The Russian Su-27 jet had air-to-air missiles under its wings and approached the U.S. Air Force RC-135 recon jet “rapidly,” coming within 5 feet of the American aircraft, the officials said.
There is a fine line between “projecting strength” and “provoking a war”.
Without a doubt, the U.S. military needs to be engaged in the fight against ISIS. There is plenty to do on that front in Iraq and elsewhere, and so we don’t need to be in Syria. There is nothing to be gained for the U.S. by getting involved in the Syrian civil war, and so we should avoid getting involved at all costs.
As far as North Korea is concerned, we should use other means to derail their nuclear program. We cannot allow them to develop an ICBM capable of hitting U.S. cities, but a direct military strike could potentially spark a conflict that would result in millions of deaths.
For most Americans, a third world war is absolutely unthinkable. And hopefully our leaders will go to great lengths to avoid one.
But at this moment global tensions continue to rise, and one wrong move could start a chain of events that nobody may be able to stop.
With just 10 days to go until Illinois enters its third year without a budget, resulting in the state's imminent downgrade to junk status and potentially culminating in a default for the state whose unpaid bills now surpass $15 billion, Democratic Illinois Comptroller Susana Mendoza issued a warning to Illinois Gov. Rauner and other elected officials on Tuesday, saying in a letter that her office has "very serious concerns" it may no longer be able to guarantee "timely and predictable payments" for some core services.
In the letter posted on her website, Mendoza who over the weekend warned that Illinois is "in massive crisis mode" and that "this is not a false alarm" said the state is "effectively hemorrhaging money" due to various court orders and laws that have left government spending roughly $600 million more a month than it's taking in. Mendoza said her office will continue to make debt payments as required, but indicated that services most likely to be affected include long-term care, hospice and supportive living centers for seniors. She added that managed care organizations that serve Medicaid recipients are owed more than $2.8 billion in overdue bills as of June 15.
"The state can no longer function without a responsible and complete budget without severely impacting our core obligations and decimating services to the state's most in-need citizens," Mendoza wrote. "We must put our fiscal house in order. It is already too late. Action is needed now."
Unveiling the most dire langage yet, in her letter Mendoza said "we are now reaching a new phase of crisis" perhaps in an attempt to prompt the Democrats and Republicans to sit down and come up with a comrpomise:
As Illinois’ Chief Fiscal and Accountability Officer, my Office is responsible for managing the state’s financial accounts as well as providing the public and the state’s elected leadership with objective and timely data concerning the state’s difficult fiscal condition. As you are quite aware, I have been very vocal regarding these issues and the budgetary impasse since assuming office six months ago; however we are now reaching a new phase of crisis.
She then addresses "the full extent of [Illinois'[ dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities":
Accordingly, I must communicate to you at this time the full extent of our dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities going forward into the new fiscal year. My Office has very serious concerns that, in the coming weeks, the State of Illinois will no longer be able to guarantee timely and predictable payments in a number of areas that we have to date managed (albeit with extreme difficulty) despite an unpaid bill backlog in excess of $15 billion and growing rapidly.
The cause for alarm in America's most bananish state is well-known: living far beyond one's means, resulting in soaring deficits and the critical need for constant debt funding.
My cause for alarm is rooted in the increasing deficit spending combined with new and ongoing cash management demands stemming from decisions from state and federal courts, the latest being the class action lawsuit filed by advocates representing the Medicaid service population served by the state’s Managed Care Organizations (MCOs). As of June 15, the MCOs, and their provider networks, are owed a total of more than $2.8 billion in overdue bills at the Comptroller’s Office. There is no question that these obligations should be paid in a more timely manner and that the payment delays caused by the state’s financial condition negatively impact the state’s healthcare infrastructure. We are currently in court directed discussions to reach a workable and responsive payment schedule going forward, but any acceleration of the timing of those payments under the current circumstances will almost certainly affect the scheduling of other payments, regardless of other competing court orders and Illinois statutory mandates.
There was one silver lining: a default is not imminent, at least not in Mendoza's view, as the comtroller explained that "debt service payments will not be delayed or diminished going forward and I will use every statutory avenue or available resource to meet that commitment."
It is a necessary pledge in order to attempt to avoid further damage to our already stressed credit ratings and to make possible the additional debt financing that we all know will be required to achieve some measure of stability going forward.
And when "every available resource" runs out, that's when things get really bad.
* * *
Meanwhile, as the state's budget director warns of fire and brimstone, in a last ditch attempt to reach an agreement with the legislature, Illinois' Republican Gov. Bruce Rauner will deliver a brief address Tuesday night calling for unity as lawmakers prepare to return to Springfield for a special session, a move Democrats quickly dismissed as a political stunt.
The speech, which is closed to the press but expected to air live on 6 p.m. television newscasts, comes just days after Rauner launched a TV advertising blitz attacking Democratic House Speaker Michael Madigan, whom the governor has spent years vilifying as the source of the state's deep financial woes according to the Chicago Tribune. Democrats have long argued that Rauner's frequent political attacks do little to bring about common ground. The governor says political gamesmanship is part of being in public service but should not impact what happens at the Capitol.
Rauner will give his remarks at the Old State Capitol, where Abraham Lincoln gave his "House Divided" speech and Barack Obama kicked off his first White House run in 2007.
The speech will fall short.
Democratic governor candidate J.B. Pritzker called Rauner's address a "sham," saying Rauner "either doesn't have the slightest clue what unity is or just doesn't care." House Democrats called it laughable, saying if Rauner wanted to negotiate he would do it behind closed doors not in front of television cameras. "I find it tragically comedic that a governor who has done more to divide this state than probably any other governor in history is going to give a unity address," said Rep. Christian Mitchell, D-Chicago.
It's not just the Democrats: Republican lawmakers said they would vote for that tax plan, but only if the hike were limited to four years starting in July, and were tied to a four-year property tax freeze. The Senate Democrats' plan makes the tax hikes permanent and applies them retroactively to the beginning of 2017.
While Rauner is expected to talk about the need for unity and compromise, House GOP leader Jim Durkin said last week that Republicans expect "substantial compliance" from Democrats, warning that he would reject "reform light or anything that is significantly diluted."
* * *
Finally, in a habringer of what's to come for the entire state, Bloomberg reports that Chicago’s junk-rated school system just went "no bid", and is paying bond-market penalties similar to those seen during the financial crisis. The Chicago school district, slammed by the fallout from the Illinois budget gridlock, has been stuck paying punitive interest rates on $167.5 million of adjustable-rate bonds after PNC Capital Markets failed in March to resell the securities once previous owners sold them.
Remember the failure of Auction-Rate Securities just before all hell broke loose in 2008? Well, it's kinda like that.
The rate on the bonds, which are supposed to stay extremely low because investors can resell them to banks periodically, jumped to a maximum 9% on March 1 from 4.64% the week before and has stayed there ever since, according to data compiled by Bloomberg.
The spiraling interest bills are reminiscent of the chaos that erupted in the wake of the Lehman Brothers Holdings Inc.’s bankruptcy in 2008, when state and local governments were stung by soaring costs after investors sold the variable-rate securities en masse just as banks were scrambling to raise cash. In Chicago’s case, though, it reflects how skittish investors have become about holding the debt of the cash-strapped school system.
In another preview of what's coming once Illinois is junked, the school district agreed this week to pay a rate of 6.39% for a short-term $275 million loan from JPMorgan Chase & Co. to help make a pension payment and cover the cost of staying open through the end of the school year. As we reported last week, the schools didn’t receive $215 million more in state aid to make the retirement-fund contribution after a measure was vetoed by Governor Bruce Rauner. Illinois has failed to pass a budget for more than two years as the Republican governor and Democrat-led legislature battle over how to close the state’s chronic budget deficits.
"Chicago Public Schools has been unable to crate a fiscally responsible budget and it relies on outside sources that, as we see, sometimes comes through and sometimes don’t,” said Matt Dalton, chief executive officer of Rye Brook, New York-based Belle Haven Investments, which manages $6 billion of municipal bonds, including about $3 million of insured Chicago school debt.
“That’s unsettling investors."
Unfortunately, that's just the beginning, and once the state itself is junked, investors will be even more unsettled.
But the biggest insult and injury is to the near-insolvent state is that Illinois is facing a full-blown crisis just one day after chronic defaulter Argentina managed to pull off a 100 year bond offering, which was 3.5x oversubscribed.