-- Connecting the dots between our economy, government and business --
Chicago is seeking to sell about $1 billion in debt the city is owed from things like unpaid parking tickets even as a top finance official warns the unprecedented offering is expected to be costly with uncertain investor appetite. The sale is the first of its kind for Chicago, and has never been done at this scale and scope as far as the administration under Mayor Brandon Johnson knows.
With $162 billion more from taxpayers, couldn’t you deliver a few bond upgrades, too
A largely unasked question is becoming glaring: Is Illinois doing all it should to use artificial intelligence to make government cost less and work better? So far, the evidence says no.
Everybody needs a side hustle these days, and mine is Ukraine, where I am now.
Summary and audio linked here.
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Audio and summary
Factoring receivables is not high on my list of indicators of a well-run enterprise
More gasping and panicking for other people’s cash. Corruption and ineptness runs rampant in Chicago and Illinois. The cities racist and socialist programs need more fuel.
And why doesn’t Chicago collect these fees? It’s not like Chicago has lots of extra cash lying around. Is Mayor 6.6 afraid he will become Mayor 3.3 if he does?
Johnson and Democrats about to be Americas largest ‘debt collertor’. And people thought red light cameras were out of control. Chicago totally deserves this new level of marxism. Enjoy your debts.
Go after Johnson and Gates for unpaid fees and fines. They both tout the rich should pay their fair share, but neither of them pay their outstanding fees and fines.
Let’s assume that most of these are from low income individuals. What Johnson is doing is selling their debt (to the city) for a huge discount. The buyer will have lots of incentives to now go after all these folks like junkyard dogs. A group of lawyers will now make all these peoples life hell by sending them letters to pay up. Of course the city couldn’t offer the deadbeats a discount because then everyone else would want a discount…
They probably can collect more money than that from garnishing public employee’s salaries.
Mr. Big Time. Proud Chicago. The City That Works. The City of the Big Shoulders. Stupid, Broke, and selling $1B of debt for pennies on the dollar because of a socialist narrative and he doesn’t believe the Poor should pay anything. So when he does this stupid pay day loan for the broke City…he will shortly there after prohibit (by ordinance) some strict rules and limits the new owners of this debt can do to collect. He’ll also start a new department, staffed by patronage hires, to help the poor in combating the creditor and likely start a state funded… Read more »
Scraping the bottom of the barrel with this one. Tell us all about your grand plans, Brandon and Stacy, while you are just like the people applying for a payday loan.
A Payday loan.
Exactly the kind of bottom-feeder thinking that typifies Mayor Cliff Notes.
“…speculative or one-time, with the largest item being the sale of $1 billion in uncollected debt to generate nearly $90 million in revenue.” Give this Democrat cheerleading rag credit. Crain’s actually did some reporting on how even the blind-as-a-bat credit ratings agencies aren’t falling for the smoke and mirrors as they have in recent decades. Awakening from mellow apathy or is this a stopped clock being right? Time will tell. Got the calculator out for this one. With a total take of $89 million, that’s factoring these receivables at 8.9%. Such a deal if anyone wants to buy in. This… Read more »
in the world of private commerce, businesses that can’t make a profit often use jobbers to get rid of inventory and business furniture at any severely discounted lump sum amount they can. This sounds like the same kind of deal without the going out of business as a result. But failed business people realize things aren’t working out. Deadbeat politicians will just re-dig this enormous hole of debt.
“They will need to figure out how many cents on the dollar investors will pay for this asset.” It’s tempting to joke about that being near zero, but you have to wonder if Chicago under Johnson has made any attempt whatsoever to collect these amounts. He has made clear that he thinks poorer people shouldn’t be made to pay, but are they all really poor? He, himself, was a deadbeat on some of these debts.
Stacy Davis Gates was a deadbeat also.
Must be the Chicago way!!
Perhaps the debt that is sold will be pre-sorted to remove the favored.
It also occurs to me that in advance of the sale, a “last offer” opportunity to get rid of your debts at 25% of face value in lieu of a sale to a wolfish, competent collection agency might be successful. The intended “sale” could be a stalking horse to collect more easily from recalcitrant debtors.
Mark – what kind of investor would buy this asset? I don’t have the data, but this seems to require hyper-aggressive collection efforts against a population that in some cases is judgment proof? I do think it darkly humorous to mention the purchase price being zero, but I recall a tax lien investment 25 years ago from the worst neighborhoods in Pittsburgh and the “right” price given the credit quality was likely 25 percent.