Jefferson County, Alabama, Votes to Declare Biggest Municipal Bankruptcy in US History

The vote by officials in Alabama’s most populous county occurred about a month after Pennsylvania’s capital of Harrisburg sought court protection citing millions in overdue bond payments tied to a trash-to-energy incinerator. A Jefferson filing would eclipse that of California’s Orange County in 1994. The action might reignite concerns among investors over defaults in the $2.9 trillion U.S. municipal bond market.

“It’s going to create attention-grabbing headlines, and the question is how retail investors react,” Peter Hayes, a managing director at BlackRock Inc., the world’s largest asset manager and the owner of $95.6 billion of municipal bonds, said before today’s decision.

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Update: I found the following map helpful in terms of locating where Jefferson County is.


Posted in * Culture-Watch, * Economics, Politics, City Government, Credit Markets, Economy, Politics in General, Rural/Town Life, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--