when we come back, stockton when we come back, stockton california is an the capital one cash rewardsves you 1% cash back on all purchases, plus a 50% annual bonus. and everyone but her... no. no! no. ...likes 50% more cash. but i don't give up easy... do you want 50% more cash? yes! yes?! ♪ [ male announcer ] the capital one cash rewards card gives you 1% cash back on every purchase, plus a 50% annual bonus on the cash you earn. it's the card for people who like more cash. ♪ what's in your wallet? why? and we've hit the why phase... >> this week, a federal judge ruled that stockton, california is eligible for bankruptcy protection. last year the city became the largest in the united states to fail financially. california law says the city's biggest creditor, the state's public employee retirement system is to be paid in full. other creditors are fighting back, saying federal law mandates that all who are owed take a financial hit. dan henninger is still with us and assistant editorial page editor, james freeman and alici alicia, you've been following this, terrible for stockton. >> t

stockton, however, is not alone in its troubles, and many expect detroit, michigan to surpass stockton as the biggest city to file for bankruptcy. that's coming up soon in detroit. the city there owes roughly, well, this sort of makes them -- you know, this is just minor potatoes. detroit's the big leagues, all right. we're talking $14 billion in detroit in retiree pension, health benefits nd long-term bond debt. go a little east to baltimore. our report from an outside consulting firm was brought in to help baltimore face bankruptcy if it doesn't take drastic steps to close a budget shortfall. that budget shortfall will be $2 billion over the next decade. a little minor item. oh. and the pension system for most city workers in baltimore? $700 million. $700 million in unfunded liabilities. 700 million. it's seven cities, towns, counties filing for bankruptcy since 2010. it's a mess. get ready because it's going to be a bigger mess because u.s. states and cities have a stunning 3.9 trillion dollars in unfunded liabilities. 3.9 trillion. so now that the federal court has held that stockt

and stockton is not alone. across the u.s., unfunded pension debts may total as much as $4.4 trillion. that's according to report last year from congress's joint economic committee. our next guest warns of a coming national pension crisis that could bankrupt many state and local governments. josh row is a professional of finance at stanford's graduate school of business. professor, welcome. good to have you with us. so many questions, so little time. i want to ask first, though, about what is likely to happen to stockton's pensioners. are they likely in this reorganization to be treated as the judge said yesterday as just another, quote, garden variety creditor, right there along with bondholders, and will they likely have to take a haircut? >> well, there are two questions. one is whether legally that will be the case. and i think that based on what the judge is saying in the case, there is some reason to believe that in fact, yes, calpers, the california public retirement employee system will be viewed as ano

when we come back, stockton california is an unprecedented move.ond insurers are the ones who can be picking up the tab. t as made for people with diabetes. that's why there's glucerna hunger smart shakes. they have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. and they have six grams of sugars. with fifteen grams of protein to help manage hunger... look who's getting smart about her weight. [ male announcer ] glucerna hunger smart. .. >> this week, a federal judge ruled that stockton, california is eligible for bankruptcy protection. last year the city became the largest in the united states to fail financially. california law says the city's biggest creditor, the state's public employee retirement system is to be paid in full. other creditors are fighting back, saying federal law mandates that all who are owed take a financial hit. dan henninger is still with us and assistant editorial page editor, james freeman and alici alicia, you've been following this, terrible for stockton. >> the pensions could be cut in t

stockton was at the top of the heap of that. and of course, its home prices went way up, and when the crisis happened, nobody, no place fell harder than stockton. >> jane, don't move, we're going to talk more about this, stockton, is it the tip of the iceberg? if this works for stockton, will other cities and states try it? joining us shortly will be michael sweet. joining us on the set for the b evening, democratic strategist, great to have you here and conservative strategist ron myer. what do you make of this situation? should this city not pay as much to the pension fund obligation since they're trying to also tell the creditors they're not going to get paid? >> well, they have to do something, right? they can't just sit there and not pay anyone. the worst case for workers is for the city not to be able to pay anyone. and that's the course they were on. and so what's best is to allow them to renegotiate their contracts and say this is what we can do, we can accomplish. and in places like illinois and other cities in californ

do need to be treated fairly. >> reporter: stockton racked up $1 billion in debt. in 2009 they spent money that they didn't have on salaries, benefits, renovations, relying on rising property taxes to pay for them. when the housing bubble burst, their economy went bust. stockton, they will likely avoid having to fully repay their debt under the bankruptcy protection. >> and now it's a question that okay we've got so much money to spend, how can we spend it and make deals to get out of bankrupt any >> reporter: they say that the city could be out of bankruptcy by june. edward lawrence for cbs news. >>> and creditors, they issued a statement saying that the group disagrees with their rulings. they did not say whether or not they would appeal the judge's decision. >>> south korea is telling the north korean dictator if you think you can attack and get away with it, think again. the cbs reporter tells us that south korea, they will be talking tough because we've got their backs. >> he is not the first north korean dictator to threaten war with south korea and their all

that's what stockton wanted. >> greta: they've had a lot of problems. what's happened to stockton?> what happened, they assumed that they would have revenue in the real estate and people were buying, and speculators. it was ground zero for the housing boom and then collapse in california. so when the whole market collapsed, stockton suffered more than any other place and made all of these investments, that this was going to go on forever and it found itself in a really, really bad situation. >> greta: i'm always curious when everything looks so great and everyone is flush with cash and i'm curious, are the people who set the pensions back at the time that it will look so great and either making bad government decisions or bad economic predictions? are they themselves now getting these pensionses and receiving sort of the fruits judgment? >> yeah, well, there's a lot of blame to spread around. yes, definitely some are. the pension system itself in the late '90s, the boom was going on forever encouraged the local governments or basically told them not to worry about making the promis

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>> the precedent has been set in stockton ton. that precedent may be followed by three other california cities, san bernardino mammoth lakes. they could go the chapter 9 bankruptcy route to get out from under their pension problems. you mentioned the bondholder problem. that is huge problem to people that lent money to cities like stockton because they will take a haircut. they may get less money back than they actually put in. that is the first time that ever happened. so there is precedent on two fronts. the bond holders, they lose and maybe the pensioners, certainly the pension fund, that will lose and the ripple effects are spread out all across the country, certainly across california. martha: used to be if there were a couple of things you could count on it was a state pension, a city pension and a municipal bond investment in america's cities and small towns across -- >> martha, if i can say this. martha: yeah. >> the bottom line, if you have lent money to a shaky city, watch out. if you're getting a pension from a shaky ci

my understanding is of stockton is the following. they owe a lot of money, a lot more money than they actually have coming in. yet they refuse to cut pensions dramatically enough, and therefore they keep giving money to the state california pension system, and they're not going to be able to pay it over time. somebody is going to have to lose here. and yet they refuse to cut, and instead making bond holders taking losses. do i understand that correctly? >> yeah, you pretty much got the nail hit on the head there, although they have to say in the state of california, public pensions are untouchable. at least according to state law. and i think that's ultimately where we're going to go. are we going to decide whether or not bankruptcy code applies toward public pensions. so they try to do some negotiation with cal percent, the public pension fund in california. and california% told the city of stockton they didn't reach -- emergency status. that there was nothing there for them to really worry about, because they still had creditors th

it's a big day in california for stockton.udge is just two hours away from deciding whether we will see the most popular city ever to go into bankruptcy in the united states. could set a precedent, right? this ruling? >> right, connell. potentially it could because it could test whether federal bankruptcy law trumps california law that says debt to the state pension fund must be honored. stockton wants to pay less than it owes on a loan it took out in 2007. money that it used to pay the california public employees retirement system. those mention obligations around $900 million represent the city's biggest debt. but during a three-day hearing in federal court in sacramento last week, creditors argued, it's unfair for them to lose money while the retirement fund negotiated back when times were good, remains untouched. again, this is the first bankruptcy case to challenge state pension law. most experts predict the judge will allow them to enter into bankruptcy and they expect the ruling to be appealed. connell: i'm sure of that

a federal judge ruled that stockton, california, is eligible for bankruptcy protection.sets the stage for stockton to pay calpers $900 million instead of main pingback almost $165 million it owes in municipal bonds. to make sense of this and what it means for you, i am joined by a partner with the strategic media. in a former federal prosecutor. i welcome you both to the show. let me start with mark. the big people that are going to take a head are the insurance companies. should stocks default on their portion of the bond, this is precedent-settin stockton could chose not to fund their pension obligation. is that acura? >> yes, i think that is one of the things that they will have to do down the road. the judge in this case was always kind of leaning towards bankruptcy. he wanted to get some kind of a decision that is legal issues, they have something to deal with. the creditors are the ones who are going to take a huge cut on what ever kind of renegotiations are going through. they have told everybody that pension funds are sacrosanct and they cannot be touched. >> tha

lori: the timeframe is where stockton left us hanging. if you are not totally confide confident, that is what i am garnering from our conversation, the exit strategy skills or how he will go about doing that, what kind of a timeframe do you think this will all go down? >> i think it will be a slow, gradual process. i don't think it is anytime soon. it is going to be extremely slow, and what they are really looking for really is to make sure inflation stays low and employment continues to move higher. that is why the employment number coming up this week is really important. the market needs a goldilocks number. it gives an illustration of perhaps you have some coming from europe. if it is too good, that will raise concerns the fed will pull away from the punch bowl too soon. lori: i wanted to work in today's economic data. still soft, but some economists say they support payroll growth, is that a goldilocks number in your view? >> i think the 200,000 number is a goldilocks number. it was disappointing. even the leading indicators were dis

. >> reporter: so the judge will now let stockton tear up some of its past loan agreements and work out new deals with the lenders to whom it owes millions. how long will that take? >> that's going to be a function of how the creditors behave at the negotiating table. i see no reason why we can't hammer something out been the next three to five months. >> reporter: stockton's major anthony silva says he sees today's bankruptcy agreement to raise the city's taxes to help for more police on the streets. >> we thought the city's bankruptcy would not be found but that wasn't the case here today. >> reporter: the city manager says it'll be hard for the city to claim that it has no money to pay its old debts if it's also raising new money through taxes. >> it would be a saoeup of bad faith in the eyes of the creditors. i think that's very dangerous move. >> reporter: in these new negotiations about to begin the city will have the upper hand but the city's three to five months to reach a deal may be optimistic. the city of vallejo took five years to reach an agreement. >>> before stockton, val

everything depends on what happens here in stockton.s are watching this very carefully. if they say we can cut the existing retirement benefits for these retirees, i think the door is wide open. right now it is 50/50 if it will even get out of court. i wish i could give you something more than that, but the state will fight this and i am sure calpers will as well. stuart: liz, do you have a comment? liz: in the bank of the proceeding, the structure means calpers does not have presidents under the under creditors. state law says that calpers would not be predicted, the pensions could be cut. stuart: the pensions are under threat, and that is a fact, that is where we are now. that is the key point to all of this, if they're under threat in stockton, they're under threat in mammoth lakes and across the states and elsewhere as well. thanks, everyone. we have yet another intraday high. look at this, with 84 points. 14,657. we have a graphic if the dow hits 15,000. we don't want to jinx it, but the graphic is rare in reserve. officers present

. >>> it's a dubious distinction the city of stockton is now the most populous in the nation to enter bankruptcy following a ruling today by a federal judge. reporter benit on the story. >> reporter: for arnold chin who owns a photography studio in stockton today's ruling is the end to a long and painful chapter in the city's history. >> i think it's a great thing for the city. we are taking a step forward. the healing is now beginning and maybe we can get on some good financial footing. >> reporter: he said the city can't cut its budget any deeper without risking public safety. >> bankruptcy is the best option only when it's the only option which is the case of stockton. >> reporter: so the judge will now let stockton tear up some of its past loan agreements and work out new deals with the lenders to whom it owes millions. how long will that take? >> that's going to be a function of how the creditors behave at the negotiating table. i see no reason why we can't hammer something out been the next three to five months. >> reporter: stockton's major anthony silva says he sees today's ba

. >> dan: stockton is the largest city in america to go into the bankruptcy. a judge agreed the city has no other choice, certainly not the kind of court victory that city leaders dreamed about. it appears it's the only way that stockton can survive. >> there is nothing to celebrate about bankruptcy, but there is sense of vindication. >> federal judge after hearing three days of testimony and examining thousands of pages of documents agrees with stockton there is no other option. the city is eligible for bankruptcy. the judge first recalled stockton's perfect storm of financial problems, property values down 50%, sales and tax revenues plem plummeted. generous health care benefits for workers, city staff reduced by 25%. all at the same time city leaders if you build it they will come mentality. the judge said they did not come. bob is not happy. stockton had to spend millions proving it didn't have millions just laying around. >> what we should have been doing today is confirming bankruptcy exit plan, a plan of adjustment. instead, we just finished the first c

stockton's unemployment 300,000, unemployment rate 18.7%.e highest metropolitan foreclosure rate in the united states. and during the last year, one in 25 housing units in that city had a foreclosure filing. that's three times the national average. clearly something is going to have to change. again, we have more just ahead on this easter sermon that's sparking controversy, why didn't the white house condemn it? why wouldn't jay carney come out and say wasn't us, didn't appreciate it, don't stand by it. and what to make of the president's pastor, not just president obama's pastor, but for several presidents, republican and democratic alike going after christians on the right. sounded like republicans. plus, fort hood family members, reacting none of the wounded will receive purple hearts. none of those who were killed by nadle hassan, who our government says is the killer, before he yelled allah akbar and unleashed terron them. and why not, that's after the break. and police say two boys, two fifth graders planned to kidnap and kill at least

. >>> 4:30, the city of stockton is also on good footing. >>> we will have more decisions to help them get out of financial trouble. >>> we will introduce you to newborn baby chicks and tell you why their birthdays are so unique. >>> good morning, we have more on your bay area weather, stay tuned. Ñáçwçñ mom, i invited justin over for lunch. good. no, not good. he's a vegetarian and he's going to be here in 20 minutes! don't stress. we can figure this out. [ male announcer ] get the speed to make a great first impression. call today to get u-verse high speed internet for as little as $14.95 a month for 12 months with a one-year price guarantee. this is delicious. ♪ ♪ [ male announcer ] save the day in an instant. at&t. ♪ ♪ . >>> welcome back, 4:44 is the time, three baby falcons have been born on top of san jose city hall, and the first that happened easter sunday. they hatched easter sunday last year. in the coming weeks they will attach identification on the chick's legs and the next few eggs will hatch in the next day or two. >>> arizona's controversial u.s. citizen and immigration

stockton is officially the largest city in the nation to file for bankruptcy. today, a federal judge accepted the city's application, even as the creditors claimed. stockton could find the money to pay its bills. attorneys for the city countered. that the city's budget and services had been cut to the bone. this case is being watched closely. stockton currently owes the california public employees retirement system. 9-hundred million dollars. a situation other cities find themselves in as well. well, well, well. growing up, we didn't have u-verse. we couldn't record four shows at the same time. in my day, you were lucky if you could record two shows. and if mom was recording her dumb show and dad was recording his dumb show then, by george, that's all we watched. and we liked it! today's kids got it so good. [ male announcer ] call to get u-verse tv starting at $19 a month for 2 years with qualifying bundles. rethink possible. earning loads of points. we'll leave that there. you got a weather balloon, with points? yes i did. [ man ] points i could use for just

. >>> 4:30, the city of stockton is also on good footing. >>> we will have more decisions to help them get out of financial trouble. >>> we will introduce you to newborn baby chicks and tell you why their birthdays are so unique. >>> good morning, we have more on your bay area weather, stay tuned. Ñáçwçñ mom, i invited justin over for lunch. good. no, not good. he's a vegetarian and he's going to be here in 20 minutes! don't stress. we can figure this out. [ male announcer ] get the speed to make a great first impression. call today to get u-verse high speed internet for as little as $14.95 a month for 12 months with a one-year price guarantee. this is delicious. ♪ [ male announcer ] save the day in an instant. at&t. ♪ . >>> welcome back, 4:44 is the time, three baby falcons have been born on top of san jose city hall, and the first that happened easter sunday. they hatched easter sunday last year. in the coming weeks they will attach identification on the chick's legs and the next few eggs will hatch in the next day or two. >>> arizona's controversial u.s. citizen and immigration serv

liz: you might say, why do i care about stockton, california?hildren of the company as they try to pay the pension. up next, a fox business exclusive. north carolina state treasurer, her words. also. david: subaru is recalling 700,000 vehicles. which models are affected and why coming next. ♪ . .. girl vo: i'm pretty conservative. very logical thinker. (laughs) i'm telling you right now, the girl back at home would absolutely not have taken a zip line in the jungle. (screams) i'm really glad that girl stayed at home. vo: expedia helps 30 million travelers a month find what they're looking for. one traveler at a time. expedia. find yours. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day afr day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] e pill eachmorning. 24 hours. zero heartbur with google now, it automatically knows when you need to leave for the airport, how much traffic there is, and can have your bo

we have a handful more. >> by 2009 stockton accumulated a billion dollars in death. its biggest debt is to the retirement system, $900 million. >>> in colorado prosecutors will seek the death penalty against suspected colorado movie theater shooter james holmes. last week prosecutors rejected a deal to have james holmes plead guilty to avoid the death penalty. he is charged for the july 20 shooting that happened during the screening of the dark night rises. 12 people were killed, 70 injured. last month a judge entered a not guilty plea on james holmes' behalf. >>> the white house said north korea's threats are all talks. he says north korea hasn't changed their posture to back up the threats from the leader. he declared a state of war with south korea and south korea's president declared to use military action. the u.s. sent fighter jets to south korea sunday for exercises after sending bombers last week. >> designed to reassure our allies and reduce pressure on soul to take action. >> the drills should keep north korea's leader from taking his threats too far. >>> t

. >> stockton se declara en quiebra. >> al ver los problemas que tienen stockton tienen aprobación paratar la negociación porque no hicieron recortes en las pensiones. >> no se cree que haya motivos para no llegar a acuerdo. un grupo de residentes y grupos comunitarios tratar de cambiar la situación de su ciudad. >> el juez dice que ya paso lo que paso que pongamos la casa en orden y que sigamos adelante. pero las decisiones que toma la ciudad el alcalde puede que se tomen mejores decisiones animara a que la gente venga a la comunidad y mejorara todo. >> y se espera que se presente un plan de ajuste pero se cree que los acreedores no aceptarían esto fácilmente. >> alejandra quezada-crowder univision . >> $0 >> 40% de las mujeres mayores de 40 años tienen tejidos muy denso en sus mamas para tener mamografias así que les llegará carta para que se hagan más exámenes preventivos. >> los musicos de la sinfomica a partir del martes comenzaran a ver sus presentaciones. >> un preparador de impuestos podría estafarlo así que en la época de declaración de impuestos hay que estar atentos. >> la do

the other problem for the creditors in stockton.on cut their benefits so that gives calpers leverage in this fight. this is basically u.s. law versus state law. i will tell you something the other big points, san bernardino, compton, other cities cutting payments to calpers. calpers got a big fight with it, and calpers is fighting riverside which testify of bankruptcy. calpers is seeing fights break out all over the state over the pension fund it is saying it is protecting but the city officials say it needs but creditors so those are really lucrative and rich. cheryl: this could go to the u.s. supreme court. thank you very much. quite a story. dennis: finally subsidies going to bankruptcy. when we come back, the mother of all crashes. former reagan budget director doomsday market call. that is next. cheryl: that story continues on today. and lou dobbs on the growing north korea threat. the country says they will restart a nuclear reactor. dennis: washington residents protesting taxes. melissa and lori are next. those dreams have ta

city of stockton is the largest city in the united states to be approved for bankruptcy. as we continue here. look at the perfect storm. financial problems that led a judge to this remarkable decision. >> also why last week 3 38 million dollar power ball winner was in court today. spencer is here with the spencer is here with the weather. >> okay. accu-weather forecast on the way. thanks very much. more rain as he says kochlingt. >> the confrontation between officer and driver busted for talking on his cell phone. talking on his cell phone. stay with us. 7 news l. >> stockton just become the largest city in america to go into bankruptcy. today the city was told that it had no other choice not exactly the kind of victory city leaders dream about. but as reporter tim explains it appears it may the only way that stockton financially can survive. >> nothing to celebrate about bankruptcy. but there's a certain sense of vindication. >> federal judge after hearing three days of testimony and examining thousands of pages of documents agree was stockton. there is no other option.

stockton can't print cash, washington can.hen it prints on cash and borrows from the federal reserve which essentially creates the cash out of thin air, it just pushes this burden to future generations of americans, in most cases as yet unborn. >> megyn: it's the stossel chip that we showed the last hour and showed many times again, this is the backup plan in case we run out of pension money and john stossel foresaw it all, here it is, watch it. >> well, i need this, you know? and i need this and i'm going to take this. and no, no, i'm the old person, i need this. you have to take care of me. i want it. mine. >> that's john is a genius. >> megyn: he's the forseer of all. >> he's explaining in a basic, fundamental way that even children can understand what the government is doing to us, what the government will do to your child that's yet unborn and it's reprehensible, immoral, not authorized by the constitution, it ought to be criminal and this is what they've saddled us where. where are they going to get 4 trillion dollars? m

meanwhile, let's take you out to stockton, california.esterday a bankruptcy judge by the name of christopher klein said that they can file for bankruptcy. how did they get into over a billion dollars worth of debt? well, stockton had one of the most generous health care benefits in california. regardless of how long you worked for the city of stockton, you would be entitled to health care for life for yourself and one dependent. that is one of the reasons they are so far down the hole. >> brian: in combination with pensions, they took 90% of your top year earnings and you earned that the rest of your life. >> gretchen: why did they think they could do that? because they were depending on the taxpayers in that particular city from real estate taxes and because times were good for a while in the 2000s before 2008. but then suddenly, like sort of like a ponzi scheme in a way, when things started going south, there wasn't all that cash coming into the city and they couldn't make ends meet. they simply couldn't do it. so what was the end resul

cash-strapped cities nationwide watching the situation in stockton.be the sign of more cities, great american towns going bankrupt? we'll be right back. did you know that if you wear a partial, you are almost twice as likely to lose the supporting teeth? even subtle movement of your partial can put stress on supporting teeth. this could lead to further tooth loss. try new poligrip® seal and protect denture adhesive. it stabilizes your partial to help reduce movement against gums and supporting teeth. care for your partial. help protect your natural teeth with new poligrip® for partials. also try polidt® clean and protect denture cleanser to kill 99.9% of odor causing bacteria. this has been medifacts for polygrip® for partials. to kill 99.9% of odor causing bacteria. new griddle-melts to youre usual breakfast sandwich. a lot more flavor. [ anouncer ] ihop's new griddle melts... made fresh and hot! hand crafted just for you. it's like a sexy sandwich. [ anouncer ] compare new griddle melts yourself. just $4. it's like a sexy sandwich. it's an epic brea

yesterday was d day for stockton, california, as a federal bankruptcy judge ruled that stockton, a city of 300,000, is able to go broke and get bankruptcy protection. a long list of creditors and bondholders wanted to pursue other avenues to resolve debts. so far stockton is the biggest and most popular city to file for bankruptcy. it filed last summer after being hard hit by the housing crisis and has since cut a quarter of its police force and more than 90 million dollars from its budget over three years. >> we're hearing also as far as jobs are concerned, it is getting easier to get a job. unemployment is going down. according to new research, that is not the case. >> there's different types of jobs being created. on friday we'll know more, when we get the government jobs report for march job creation. we'll see if the trend of steady hiring and decreasing firing can indeed continue. in the meantime the brookings institute finds that only 14 of the 100 biggest cities in the u.s. have more jobs than they did before the recession. as you can see from the screen here, six cities are in

stockton is the biggest city in the u.s. to go bankrupt.ruled the city of 290,000 people listen allowed to work out new deals with the people it owes millions of dollars to. the mayor of stockton wants to raise taxes so the city can put more police on the streets. but other civic leaders say that could send the wrong message to the people it owes money to and the courts. >> it was said before that maybe the city of stockton couldn't be found eligible for bankruptcy if there's a talk of raising taxes. so that wasn't the case here today. >> many citizens say they are just glad the city will be able to get a fresh start. they hope this time stockton will be able to maintain a good financial standing. the bankruptcy of stockton is already affecting local governments. moody's investors have downgraded the rating on solano county's pension obligation bonds. the county says that was not surprise. the rating agency says the overall risk has changed. >>> 7:46. happening now, jury selection is set to begin this morning in a trial for a lawsuit over m

stockton is the biggest city in the u.s. to go bankrupt.e ruled the city of 290,000 people listen allowed to work out new deals with the people it owes millions of dollars to. the mayor of stockton wants to raise taxes so the city can put more police on the streets. but other civic leaders say that could send the wrong message to the people it owes money to and the courts. >> it was said before that maybe the city of stockton couldn't be found eligible for bankruptcy if there's a talk of raising taxes. so that wasn't the case here today. >> many citizens say they are just glad the city will be able to get a fresh start. they hope this time stockton will be able to maintain a good financial standing. the bankruptcy of stockton is already affecting local governments. moody's investors have downgraded the rating on solano county's pension obligation bonds. the county says that was not surprise. the rating agency says the overall risk has changed. >>> 7:46. happening now, jury selection is set to begin this morning in a trial for a lawsuit over

answers. >>> stockton, california. the nation's biggest city so far to go bankrupt. business owners who are feeling the pain. chrissy dejoyos owns commerce spa and boutique. she says her business took a hit during the bankruptcy crisis. she joins us. nice to see you. >> how are you? >> very well. so tell me, since stockton has filed for its reorganization bankruptcy, has it had an impact on your business? first, tell me what your business is. >> we have a spa in the miracle mile. if anybody is familiar with the mile, it's a wonderful place to visit. a lot of mom and pop shops. no big franchise, no big businesses in there. we did take a hit in the beginning of them announcing the bankruptcy. we had a lot of city officials, retired city works who definitely had to cut back on their services with us at the spa. so financially, we did feel the crunch. >> i suppose it depends on the nature of your business who's going to feel a bigger crunch. if you tend to have a business that's sort of more of a luxury item, like a spa compared to like a grocery store for food, you're m

stockton. are we going to see more stocktons happen? >> in california, you may see more stocktons.rtant to realize it's not really indicative of the broader market because there in many cases states intervene very proactively. see what happens in michigan and in rhode island, other states have very strong fiscal oversight programs. california does not. i think what is going to be telling here is not only how much pain will bondholders have to bear, but what will ultimately happen with calpers. if calperss are has to share in the pain, you may see other municipalities line up. at that point i think california has to introduce legislation which easier makes it easier for them to intervene prior to bankruptcy or makes it harder for municipalities to enter bankruptcy. you may see a few more, not necessarily widespread, though. >> so stockton in particular, where were the bonds two months ago and where are they now this would you buy them now? what kind of recovery do you think you can get? >> first, in the context of a very large market, 3.7 trillion. they have about 850 million outsta

---stockton fue la primera ciudad grande del pais en declarar la quiebra...o que busca la paz en tierra santa se ha dado a la tarea de combatir varios anuncios anti isalmistas que han sido colocados en diez autobuses del muni en san francisco... take vo ---los anuncios comenzaran a aparecer tambien en diez autobuses del muni y en los mismos aparecen fotografias de personas judias y palestinas trabajando juntos por la paz... ---la publicidad se mantendra en la luz publica por cuatro semanas. topvo cesar ---aunque hoy el edificio del ayuntamiento de san jose estuvo cerrado para conmemorar el natalicio de cesar chavez, alguien estuvo muy ocupada... ---se trata de una mama halcon que se puede observar en estas imagenes alimentando a sus crias que acaban de nacer en lo mas alto de la edificacion., uno ayer y otros dos el dia de hoy.. --- todavia queda otro pequeno halcon que podria salir de su cascaron en cualquier momento... cesar ---ahora veamos si la lluvia continuara... blanca ---pasamos contigo javier castro... take pkg take pkg ===roll ticker=== blanca ---va

just finally, stockton is the largest city so far to file for chapter 9 in this collapse. back to you. >> as you've long been reporting, known as the foreclosure capital of the country during the big downturn. >> thank you, jane. >>> what does history say happens in the second quarter after the kind of first three months we saw this year? josh lipton breaks it down for us. >> bill, in the first quarter the dow and the s&p 500 were up some 11% and 10% respectively. what does that mean for the second quarter and the rest of the year? if history is any guide, it could be good news for the bulls. let's break down the dow first. according to moriano, our quant analyst, there have been -- we continued to build on those gains in the second quarter. in 12 of those 12 times, or 100% of the time, the dow finished higher for the year. by the way, the month of april, the best month for the dow since 1950. posting an average monthly gain of about 2%. as for the s&p 500, the analysts at barini crunched the data highlighting the other 12 times going back to 1929 when the s&p was up at le

a stockton, california, business owner is here to tell you what is going with her business up next. > and in two minutes, they may be the royal couple, but jay-z and beyonce at the center of a wicked hot controversy. wicked hot controversy. and mark [ ship horn blows ] no, no, no! stop! humans. one day we're coming up with the theory of relativity, the next... not so much. but that's okay -- you're covered with great ideas like optional better car replacement from liberty mutual insurance. total your car and we give you the money to buy one a model year newer. learn about it at libertymutual.com. liberty mutual insurance. responsibility. what's your policy? the people of bp made a commitment to the gulf., and every day since, we've worked hard to keep it. today, the beaches and gulf are open for everyone to enjoy. we've shared what we've learned, so we can all produce energy more safely. bp's also committed to america. we support nearly two-hundred-fifty thousand jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has nev

stockton is asking to default on $100 million it borrowed to pay cal first pensions. >>> and startingay, shopping at three local cities and over a dozen cities will cost you more. tax rates are now breaking down as marin county 8.5 and san rafael and novato will pay 9%. tax breaks in santa clara is 8.34 and you will now have to pay 9% and that rate is 9 and quarter. we got mixed reaction from residents and some say it is another expense they cannot afford. >> these are very high and i don't think we can afford it. not only are we facing rent increase but we are facing food raising and everything, you name it. >> they say it is necessary to help with improvements. >>> and the city is giving a heart-felt welcome back to one of their own. firefighter and medic helped to fight a three-alarm fire at st. patrick's cathedral. quick action saved his live at a welcome back breakfast at station one and members of the department said they were glad to see him and he said he was glad to go back to work. >> i feel healthy and strong and happy to go back. >> they said firefighters never left his si

stockton is asking to default on $100 million it borrowed to pay cal first pensions. >>> and startingay, shopping at three local cities and over a dozen cities will cost you more. tax rates are now breaking down as marin county 8.5 and san rafael and novato will pay 9%. tax breaks in santa clara is 8.34 and you will now have to pay 9% and that rate is 9 and quarter. we got mixed reaction from residents and some say it is another expense they cannot afford. >> these are very high and i don't think we can afford it. not only are we facing rent increase but we are facing food raising and everything, you name it. >> they say it is necessary to help with improvements. >>> and the city is giving a heart-felt welcome back to one of their own. firefighter and medic helped to fight a three-alarm fire at st. patrick's cathedral. quick action saved his live at a welcome back breakfast at station one and members of the department said they were glad to see him and he said he was glad to go back to work. >> i feel healthy and strong and happy to go back. >> they said firefighters never left his si

on the heels of cyprus the staggering bailout and detroit's economic downturn stockton california has just declared bankruptcy stockton is home to about three hundred thousand people making it america's largest city to file does far up the chapter nine bankruptcy application was accepted by a judge this past monday in order to allow the city to continue operating according to city officials the biggest debt owed is to the california public employees retirement system a debt of nine hundred million dollars it has been allocated to pensions however the city is deliberating on a one. they can actually get out of bankruptcy without going after the promise pensions situation that's all too reminiscent of the lady who california a city of one hundred sixteen thousand people filed bankruptcy in two thousand and eight when facing a sixty million dollars deficit although they escaped millions of dollars in debt from the bankruptcy the city was able to retool its pension plan which to this day remains an unfunded liability of one hundred sixty five million dollars so despite the city's miscalcu