debt

Fiscal Prudence in New Jersey

Gov. Chris Christie in Illinois this month [Feb. 2015]. His office vowed to appeal a judge’s ruling on public employee pensions. (Credit Jim Young/Reuters)

As New Jersey reels from yet another legal scandal reaching the office of Gov. Chris Christie (R), it really is hard to know where to begin. Naturally, it is tempting to start “at the beginning”, but sometimes that is a difficult proposition, since nothing ever begins. So let us start, then, with Katie Zernike of the New York Times:

In a major blow to Gov. Chris Christie, a New Jersey judge ruled on Monday that he violated state law when he declined to make the full payment into the state’s pension system for public employees last year and ordered him to find a way to fund it now.

Earlier this month we learned that the governor, who once promised “a new era of accountability and transparency” was “waging 23 battles to keep state documents secret” amid a flurry of ethics investigations that have challenged his political ambitions. Zernike notes:

The decision further complicates Mr. Christie’s hopes of reviving his presidential ambitions, which have suffered in recent weeks as his approval ratings in New Jersey have sunk to the lowest point of his tenure, and Republican donors have moved to other contenders for the party’s nomination.

Mr. Christie will now be scrambling also to find the $1.57 billion the judge ordered him to pay.

And while it is easy enough to start, and even finish, with a roll of the eyes because Chris Christie has once again managed to do whatever it is he thinks he is doing, we ought not gloss over the other powerful irony, here. After all, what did Christie accomplish by skipping out on the pension system?

Well, he actually managed to convince Fitch Ratings to downgrade New Jersey debt. And he only had to break the law to do so. At some point, nobody can rightly claim to be surprised.

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Image note: Gov. Chris Christie in Illinois this month. His office vowed to appeal a judge’s ruling on public employee pensions. (Credit: Jim Young/Reuters)

Zernike, Kate. “Christie Broke Law With Pension Move, New Jersey Judge Says”. The New York Times. 23 February 2015.

Redden, Molly. “Chris Christie Is Now Waging 23 Court Battles to Keep State Documents Secret”. Mother Jones. 4 February 2015.

Rizzo, Salvador. “Fitch downgrades N.J. debt, saying Christie is repudiating his pension reform”. The Star-Ledger. 5 September 2014.

What Is Caesar’s

12-month graph showing stock prices for Caesar's Entertainment Corp. (CZR), as of 25 November 2014. (via Yahoo! Finance)

Try to follow the latest twists and turns in the CZR debacle—

A Caesars Entertainment Corp. (CZR) creditor group said managers should be stripped of control of the casino company’s operating unit because they looted the subsidiary of billions of dollars in assets.

UMB Bank, trustee for first-lien noteholders owed about $1.25 billion, sued Caesars today in Delaware Chancery Court, repeating allegations made by junior creditors in August.

Today’s suit, the first by senior creditors, came after some of them had agreed on the outline of a debt restructuring plan for the operating unit. The first-lien creditors today asked the court to appoint a receiver for the unit ....

.... Bonderman and the other directors “have thoroughly ransacked CEOC in a sweeping and now transparent plan to take CEOC’s prime assets for themselves and leave its liabilities and creditors behind,” according to today’s filing.

Caesars has said its largest division won’t have enough cash to repay debts by the fourth quarter of 2015 if it can’t restructure its obligations through refinancing, creditor negotiations or bankruptcy.

(Church and Keller)

—and then shrug and tell yourself, “It’s business. Nothing unusual here.”

Now, then, how does that feel?

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Church, Steven and Laura J. Keller. “Caesars Lenders Seek Receiver, Claiming Unit Was Looted “. Bloomberg. 25 November 2014.