Saturday, January 15, 2011

Bloomberg Reporter Omits Crucial Information

As reported by Bloomberg earlier this week, the NJ Economic Development Agency scaled back a planned bond sale from $1.8 billion to $1.1 billion due to weak demand. In that article, the reporter for Bloomberg noted that:

"About 20 minutes before the deal was scaled back, Christie told a town- hall meeting in Paramus that health-care spending “will bankrupt” the state unless it requires its workers to pay more for medical coverage."

Adding to that, the reporter cited Gary P. Pollack, head of bond trading at N.Y.'s Deutsche Bank Private Wealth Management:, who stated:

He [Christie] is scaring some people when he says the state is going bankrupt,” Pollack said. “It wasn’t timed well.”
See Bloomberg article here

Bloomberg failed to mention that the day before the scheduled sale, CNBC aired a segment addressing issues affecting the bond market, including under-funded pensions, deteriorating State finances and disclosure in the bond market.

What's more, just last month, Bloomberg carried an article on NJ's severely underfunded pension and retiree health benefits liabilities.  See here.

New Jersey was the first State in the country to be charged with securities fraud for failing to report those severely underfunded pension obligations.  The Bloomberg article failed to note this chilling event. See SEC Order to Cease and Desist here.

Responding to the Bloomberg article, according to Politicker, Trenton masterminds, Assemblyman Louis Greenwald (D) and Assemblyman Gary Schaer (D), insist that the Governor's comment affected the bond market.  See Greenwald's and Schaer's remarks here.

Gov. Christie didn't say anything that the rest of the Country doesn't already know and investors are responding accordingly to those truths.

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