“In another sign of America’s fiscal mess, Jefferson County, Alabama filed the largest municipal bankruptcy in U.S. history on Wednesday. The most-populous county – home of Birmingham – defaulted on more than $3 billion of debt related to a sewer system project after negotiations with creditors broke down.
The biggest loser – besides the locals – is JPMorgan Chase, the largest Jefferson County creditor who may lose hundreds of millions. It’s not the first time the largest U.S. bank by assets, has had problems with this deal. In 2009, JPMorgan paid a $722 million settlement with the SEC over corruption charges related to the project.
Jefferson County won’t be the last municipal bankruptcy says Jeffrey Bell, a former campaign adviser to President Ronald Reagan and currently policy director at the American Principles Project. “It was easy to borrow the money, it was too easy but now it’s becoming impossible,” Bell tells Aaron Task in the accompanying clip.”
Here is a link to the video interview and written article: http://finance.yahoo.com/blogs/daily-ticker/meredith-whitney-along-jefferson-county-ala-files-largest-174407736.html