Welcome to Bankrupt Stockton
I live in California , and today I saw the news that one of the state’s large cities, Stockton , also is the largest U.S. city to file for bankruptcy. Stockton came into existence during the Gold Rush, but now it is a hub for California ’s agricultural exports. It also now has the dubious distinction of going bust.
Sadly, the slowing California economy, as well as high levels of taxation, onerous regulation, and the city’s borrowing binge several years ago, has resulted in the city’s fiscal demise. Stockton formally filed for protection under the U.S. bankruptcy code, halted its bond payments, slashed employee health and retirement benefits, and adopted a day-to-day survival budget.
I bring this situation to your attention today because it’s a cautionary tale of what increasingly could become the norm for more cities throughout the state, and throughout the country. If this type of debt contagion spreads throughout the nation, it will become a real threat to all of our financial lives, and that’s something we all must be aware of — and prepared to face.
Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.
His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.
