San Bernardino to Curb Payments on Retirees in Bankruptcy - (www.bloomberg.com) San Bernardino, the second-largest U.S. city to seek bankruptcy protection, will put off paying $13 million to California’s retirement system and $3.4 million for pension bonds issued in 2005, in a provisional spending plan. The City Council voted 5-2 for the fiscal road map yesterday to meet a court-imposed Nov. 30 deadline for a balanced interim municipal budget while in bankruptcy proceedings. In addition to deferring payments on pension obligations, the plan calls for firefighting and policing cuts. “Without restructuring its finances or maintaining the protection of Chapter 9, the city could not pay its employees, retirees, bondholders or vendors,” Andrea Travis-Miller, the acting city manager, and Jason Simpson, the finance director, said in a council memo. “This would result in uncontrolled default and, presumably, a collapse of public services.”
Ousted Bell police chief sues for severance pay - Los Angeles Times - (www.latimes.com) The police chief who was ousted after it was revealed that he and other city leaders in Bell were drawing enormous salaries has sued his former employers for severance pay. Randy Adams, who is now one of the highest-paid public pensioners in California, stopped working for the small, working-class city shortly after The Times revealed the high salaries paid to the former chief, as well as to Chief Administrative Officer Robert Rizzo and Angela Spaccia, Rizzo's assistant.
Merkel Did ‘Bare Minimum’ to Keep Greece Solvent: Analysts - (www.cnbc.com) The latest Greek debt deal is at the behest of German Chancellor Angela Merkel and the needs of the domestic political landscape there rather than about ensuring Greece’s long term economic well- being, analysts told CNBC Tuesday. “They’ve done the bare minimum just to keep the show on the road to prevent Greece from falling apart and having to leave the euro in the next few months. They’ve not done enough to get Greece back to a sustainable economic or fiscal path,” Michael Saunders, chief economist for Western Europe at Citi, told CNBC Europe’s “Squawk Box”.
Cox and Archer: Why $16 Trillion Only Hints at the True U.S. Debt - (online.wsj.com) As a result, fiscal policy discussions generally focus on current-year budget deficits, the accumulated national debt, and the relationships between these two items and gross domestic product. We most often hear about the alarming $15.96 trillion national debt (more than 100% of GDP), and the 2012 budget deficit of $1.1 trillion (6.97% of GDP). As dangerous as those numbers are, they do not begin to tell the story of the federal government's true liabilities. The actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.
Argentina seeks halt to $1.3bn debt order - (www.ft.com) Argentina has asked a US appeals court to reimpose a stay on payment to hedge funds that hold defaulted bonds that was lifted by a New York judge last week.
Buenos Aires and holders of Argentine restructured bonds filed separate motions on Monday, arguing that New York's reputation as a financial centre was at stake. Argentina is trying to escape a Catch 22 ruling on an "equal footing" clause that has triggered fears of a fresh default 11 years after the country defaulted on $100bn in foreign debt. Last week, New York Judge Thomas Griesa ordered Argentina to pay $1.3bn to a group of plaintiffs led by the fund NML Capital, part of Elliott Associates, by December 15, the same day it is due to make a payment to bondholders who exchanged their defaulted debt. That sets the stage for Argentina either to pay everyone or no one, as it would not be able to continue paying its restructured bonds without flouting Judge Griesa's order. The country is not expected to choose the former option, given the government's stated intention not to pay a dime to what it describes as "vultures".