Saturday, June 30, 2012

Islamist Morsi is sworn in as Egypt's president

In this image made from Egyptian State Television, Egyptian President Mohammed Morsi makes remarks after he was sworn in at the Supreme Consitutional Court in Cairo, Egypt, Saturday, June 30, 2012. Islamist Mohammed Morsi has been sworn in before Egypt's highest court as the country's first freely elected president, succeeding Hosni Mubarak who was ousted 16 months ago. (AP Photo/Egyptian State TV)

In this image made from Egyptian State Television, Egyptian President Mohammed Morsi makes remarks after he was sworn in at the Supreme Consitutional Court in Cairo, Egypt, Saturday, June 30, 2012. Islamist Mohammed Morsi has been sworn in before Egypt's highest court as the country's first freely elected president, succeeding Hosni Mubarak who was ousted 16 months ago. (AP Photo/Egyptian State TV)

In this image made from Egyptian State Television, judges from Egypt's Supreme constitutional court applaud Mohammed Morsi, center, after he was sworn in as President in Cairo, Egypt, Saturday, June 30, 2012. Islamist Mohammed Morsi has been sworn in before Egypt's highest court as the country's first freely elected president, succeeding Hosni Mubarak who was ousted 16 months ago.(AP Photo/Egyptian State TV)

Egypt's President-elect Mohammed Morsi talks to his supporters at Tahrir Square, the focal point of Egyptian uprising, in Cairo, Egypt, Friday, June 29, 2012. In front of tens of thousands of cheering supporters, Egypt's first Islamist and civilian president-elect vowed Saturday that nobody can take away his authority and symbolically read an oath of office on the eve of his official inauguration. (AP Photo/Amr Nabil)

Egyptians wave to Egypt's President-elect, Mohammed Morsi, upon his arrival to give a speech at Tahrir Square in Cairo, Egypt, Friday, June 29, 2012. In front of tens of thousands of cheering supporters, Egypt's first Islamist and civilian president-elect vowed that nobody can take away his authority and symbolically read an oath of office on the eve of his official inauguration. (AP Photo/Khalil Hamra)

Egypt's President-elect Mohammed Morsi waves to supporters before giving a speech at Tahrir Square in Cairo, Egypt, Friday, June 29, 2012. In front of tens of thousands of cheering supporters, Egypt's first Islamist and civilian president-elect vowed that nobody can take away his authority and symbolically read an oath of office on the eve of his official inauguration. (AP Photo/Khalil Hamra)

(AP) ? Islamist Mohammed Morsi promised a "new Egypt" and unwavering support to the powerful military as he took the oath of office Saturday to become the country's first freely elected president, succeeding Hosni Mubarak who was ousted 16 months ago.

In a solemn inauguration ceremony before the Supreme Constitutional Court, Morsi also became the Arab world's first freely elected Islamist president and Egypt's fifth head of state since the overthrow of the monarchy some 60 years ago.

"We aspire to a better tomorrow, a new Egypt and a second republic," Morsi said before the black-robed judges in the court's Nile-side headquarters built to resemble an ancient Egyptian temple.

"Today, the Egyptian people laid the foundation of a new life ? absolute freedom, a genuine democracy and stability," said Morsi, a 60-year-old U.S.-trained engineer from the Muslim Brotherhood, a fundamentalist group that has spent most of the 84 years since its inception as an outlawed organization harshly targeted by successive governments.

He later delivered his inauguration address at a gigantic Cairo University lecture hall packed with several thousands, including many members of the Islamist-dominated parliament dissolved by the military earlier in June.

Morsi repeated his oath of office and lavishly praised the military, which has rushed a series of decrees this month that stripped Morsi of significant powers, gave it legislative power and took control of the process of drafting a permanent constitution. It has also retained its influence on key domestic and foreign policy issues.

"The armed forces are the shield and sword of the nation," he said. "I pledge before God that I will safeguard that institution, soldiers and commanders, raise its prestige and support it with all the powers available to me so it can be stronger."

But Morsi also appeared later in the address to urge the military to hand over all powers to his elected administration.

"The (ruling) Supreme Council of the Armed Forces has honored its promise not to be a substitute for the popular will and the elected institutions will now return to carry out their duties as the glorious Egyptian army returns to being devoted to its mission of defending the nation's borders and security," he said.

Military ruler Field Marshal Hussein Tantawi was in attendance along with other generals from the ruling council. His arrival at the hall was greeted by chants of "the army and the people are one hand." He and Gen. Sami Anan, the powerful chief of staff, wore a blank face throughout Morsi's address, occasionally offering support to Morsi with a polite clap of their hands.

Later at a military ceremony held at a base east of Cairo, Tantawi and Anan saluted Morsi as he arrived and awarded him the "shield of the Armed Forces" ? the Egyptian military's highest honor. Morsi also received a 21-gun salute before he and Tantawi addressed the ceremony.

Morsi used his Cairo University address to send an implicit message of reassurance to Israel, while also pledging support for the "legitimate rights" of the Palestinians.

He said his administration would continue to honor its international treaties ? a thinly veiled reference to the 1979 Egyptian-Israeli peace treaty.

Relations between the two neighbors have become particularly tense since last year's overthrow of Mubarak, who had forged close ties with the Jewish state during his 29-year rule. The rise to power of Egyptian Islamists has been a source of alarm among many Israelis.

Hundreds of soldiers and policemen guarded the Supreme Constitutional Court building as Morsi arrived shortly after 11 a.m. local time (0900 GMT) in a small motorcade to take the oath of office. Only several hundred supporters gathered outside the court to cheer the new president and, in a departure from the presidential pomp of the Mubarak era, traffic was only briefly halted to allow Morsi's motorcade through on the usually busy road linking the city center with its southern suburbs.

In another sign of the change of style, Morsi began his address at Cairo University with an apology to students whose final exams had to be postponed to allow the ceremony to be held at the main campus. He was given an official welcome at the university with a military band playing the national anthem as he stood at attention.

Saturday's swearing-in also marked a personal triumph for Morsi, who was not the Brotherhood's first choice as president and was only thrown into the race when the group's original candidate, chief strategist and financier Khairat el-Shater, was disqualified over a Mubarak-era criminal conviction.

Derided as the Brotherhood's uncharismatic "spare tire," his personal prestige has surged since his victory, and received another boost Friday after he delivered a speech in Tahrir Square in which he tried to present him as a candidate of not just Islamists but of all those who want to complete the work of the 2011 uprising against the authoritarian Mubarak.

"Egypt today is a civil, national, constitutional and modern state," Morsi, wearing a blue business suit and a red tie, told the judges in the wood-paneled chamber where he took the oath of office. "It is a strong nation because of its people and the beliefs of its sons and its institutions."

Morsi took a symbolic oath Friday in Tahrir Square, the birthplace of the uprising that ended Mubarak's authoritarian rule last year, and vowed to reclaim presidential powers stripped from his office by the military council that took over from the ousted leader.

Morsi's speech Friday in Tahrir Square was filled with dramatic populist gestures. The 60-year-old president-elect staked a claim to the legacy of the uprising and voiced his determination to win back the powers stripped from his office by the generals.

Addressing a crowd that repeatedly shouted, "We love you Morsi!" he began his speech by joining them in chanting, "Revolutionaries and free, we will continue the journey." Later he opened his jacket wide to show that he was not wearing a bullet-proof vest.

"Everybody is hearing me now. The government ... the military and the police. ... No power above this power," he told the crowd. "I reaffirm to you I will not give up any of the president's authorities. I can't afford to do this. I don't have that right."

But by agreeing to take the official oath before the court, rather than before parliament as is customary, he bowed to the military's will in an indication that the contest for power will continue.

The generals dissolved the Islamist-packed legislature after the same Supreme Constitutional Court that swore him in Saturday ruled that a third of its members were elected illegally.

The military has also declared itself the legislative power. It gave itself control over the drafting of a new constitution, sidelining Morsi's Muslim Brotherhood, which had sought to influence the process by packing the drafting panel with Islamists.

The generals also created a National Security Council to formulate key domestic and foreign policies. Military officers outnumber civilians sitting on the council by about two-to-one, and decisions are made by a simple majority.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2012-06-30-Egypt/id-28d3d416956844bca2bfccdd22a9cab0

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Farmers get fertilizer advice with loans via mobile technology

Farmers get fertilizer advice with loans via mobile technology [ Back to EurekAlert! ] Public release date: 29-Jun-2012
[ | E-mail | Share Share ]

Contact: Bianca Ferrer
b.ferrer@irri.org
63-258-05600 x2587
International Rice Research Institute

Using mobile technology, Filipino rice farmers now have access to personalized fertilizer advice and micro-loans to buy fertilizer for their crop thanks to a new partnership between a microfinance bank and a farmer-focused organization

Using mobile technology, Filipino rice farmers now have access to personalized fertilizer advice and micro-loans to buy fertilizer for their crop thanks to a new partnership between a microfinance bank and a farmer-focused organization.

Technologies are great solutions by themselves, but linking them to financial services can provide even more benefits for farmers.

The International Rice Research Institute (IRRI) in partnership with the Philippines Department of Agriculture developed an Internet-based tool named Nutrient Manager for Rice (NMRice), which provides rice farmers with a fertilizer recommendation precisely matching their crops' nutrient needs. Use of this recommendation increases a farmer's' profit and rice yield. The Internet version was supplemented last year by a mobile phone service, and early this year as an Android application that can be downloaded for free.

NMRice is now being linked with services of BPI Globe BanKO Inc. (BanKO), the first mobile-based, microfinance-focused savings bank in the Philippines.

BanKO has agreed to partner with Alalay sa Kaunlaran (ASKI), Inc., a farmer-focused group in Central Luzon in the Philippines, to provide micro-agri loans for agricultural inputs for Filipino rice farmers. The provision of the micro-agri loans is being pilot-tested with rice farmers receiving a crop management recommendation from NMRice to increase their rice yield and profit.

The initial number of farmer-beneficiaries targeted by ASKI in the pilot is 1,500. The agreement between BanKO and ASKI was signed on May 25, 2012. Disbursement for the loans will start in late June to early July.

"This partnership is the beginning of a great opportunity to help rice farmers by combining their access to financial services with timely information on the best-bet rice management practices for increasing yield and profit in their fields," says Dr. Roland Buresh, IRRI's nutrient management expert and lead developer of NMRice.

"Fertilizers are often the highest cost for rice farmers after labor, accounting for about 20 percent of total production or capital cost for the farmers," he adds. "So, our team from IRRI partnered with the Department of Agriculture to develop NMRice to help rice farmers increase their yield and profit and to help contribute to achieving rice self-sufficiency. Through improved timing and selection of fertilizers, farmers can get more yield per amount of added fertilizer.

"Linking technologies developed from research with microfinance services that a farmer can easily access is a promising approach for helping farming households and boosting food production in the country," Dr. Buresh concludes."

###


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Farmers get fertilizer advice with loans via mobile technology [ Back to EurekAlert! ] Public release date: 29-Jun-2012
[ | E-mail | Share Share ]

Contact: Bianca Ferrer
b.ferrer@irri.org
63-258-05600 x2587
International Rice Research Institute

Using mobile technology, Filipino rice farmers now have access to personalized fertilizer advice and micro-loans to buy fertilizer for their crop thanks to a new partnership between a microfinance bank and a farmer-focused organization

Using mobile technology, Filipino rice farmers now have access to personalized fertilizer advice and micro-loans to buy fertilizer for their crop thanks to a new partnership between a microfinance bank and a farmer-focused organization.

Technologies are great solutions by themselves, but linking them to financial services can provide even more benefits for farmers.

The International Rice Research Institute (IRRI) in partnership with the Philippines Department of Agriculture developed an Internet-based tool named Nutrient Manager for Rice (NMRice), which provides rice farmers with a fertilizer recommendation precisely matching their crops' nutrient needs. Use of this recommendation increases a farmer's' profit and rice yield. The Internet version was supplemented last year by a mobile phone service, and early this year as an Android application that can be downloaded for free.

NMRice is now being linked with services of BPI Globe BanKO Inc. (BanKO), the first mobile-based, microfinance-focused savings bank in the Philippines.

BanKO has agreed to partner with Alalay sa Kaunlaran (ASKI), Inc., a farmer-focused group in Central Luzon in the Philippines, to provide micro-agri loans for agricultural inputs for Filipino rice farmers. The provision of the micro-agri loans is being pilot-tested with rice farmers receiving a crop management recommendation from NMRice to increase their rice yield and profit.

The initial number of farmer-beneficiaries targeted by ASKI in the pilot is 1,500. The agreement between BanKO and ASKI was signed on May 25, 2012. Disbursement for the loans will start in late June to early July.

"This partnership is the beginning of a great opportunity to help rice farmers by combining their access to financial services with timely information on the best-bet rice management practices for increasing yield and profit in their fields," says Dr. Roland Buresh, IRRI's nutrient management expert and lead developer of NMRice.

"Fertilizers are often the highest cost for rice farmers after labor, accounting for about 20 percent of total production or capital cost for the farmers," he adds. "So, our team from IRRI partnered with the Department of Agriculture to develop NMRice to help rice farmers increase their yield and profit and to help contribute to achieving rice self-sufficiency. Through improved timing and selection of fertilizers, farmers can get more yield per amount of added fertilizer.

"Linking technologies developed from research with microfinance services that a farmer can easily access is a promising approach for helping farming households and boosting food production in the country," Dr. Buresh concludes."

###


[ Back to EurekAlert! ] [ | E-mail | Share Share ]

?


AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert! system.


Source: http://www.eurekalert.org/pub_releases/2012-06/irri-fgf062812.php

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Friday, June 29, 2012

Check out this gigantic LEGO church that popped up in the Netherlands! http://su...

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Chinese Worker Applies Edge Lettering to Fake Coins

Here's another one of the coining machines in use at this large Chinese coin counterfeiting factory. A worker, who looks to be a woman, is operating a machine that applies edge lettering to the edges of the struck coins. This machine is somewhat different from the Schuler edge lettering machine in use at the U.S. Mint for the golden dollars. According to reader Henry N., this one operates more like a Castaing Machine, which was the first machine ever developed for the express purposes of putting edge lettering and other marks on the edges of coins. Minting experts Mike Diamond and Fred Weinberg also concur, based on what they can see in the photo, that the machine is applying edge lettering. Reader Kostas K. pointed out that if you look carefully just to the left of the large tube, you can actually see a coin traveling through the machine!

Source: http://coins.about.com/od/worldcoins/ig/Chinese-Counterfeiting-Ring/Fake-Coins-in-the-Making.htm

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Ballot.com Sale Shows Politics Online Is Big ... - My Best Web Hosting

Miami, FL (PRWEB) May 21, 2012

With only 6 months to go before the 2012 presidential election, candidates, organizations and investors hoping to capture the publics attention are buying up political-flavored domain names while established media companies are enjoying increased advertising revenue to their political websites. The upcoming sale of Ballot.com is catching a lot of attention due to these and additional factors.

Political candidates also are now raising literally tens of millions of dollars using the Internet alone. In addition, sales of websites, domains and related businesses have generated millions of dollars as investors snap up inventory.

According to the Berkeley Daily Planet, $8 billion dollars will likely be spent on the 2012 Election Cycle. That compares with $3 billion in the 2010 election a record for a mid-term election and $5.3 billion in 2008.

Politics online is becoming very big business.

According to recent reports, Republican candidates like Mitt Romney, Rick Perry, Rick Santorum, Newt Gingrich, and Ron Paul have spent a significant amount money on domain names and online media buys in the last few months, as has President Barack Obamas re-election campaign. Some have even raised millions of dollars on the web from their avid supporters in a single days time. The Internet is now booming when it comes to the business of Politics.

Just in time for the 2012 campaign season, Ballot.com is up for sale at Flippa.com ? the worlds #1 marketplace for buying and selling web sites.

?Premium single-word domain names have always been big business, and Flippa?s seeing more and more of these very large sales. We?re honored to be hosting the auction for Ballot.com, which is obviously a top drawer piece of online real estate. It could be a great buy for investors or for entrepreneurs with a smart plan,? said Flippa CEO Dave Slutzkin.

Industry monitor DNJournal.com qualifies one-word dot-com domain names as the oceanfront real estate of the Internet, being quite valuable and rare.

Single-word domain names are a hot commodity and investment opportunity for businesses, entrepreneurs and celebrities, with many of them snapped up in the 1990s. Recently, Social.com was sold for over $2.5 million. One Canadian band is hoping to strike it rich by selling their domain, TeaParty.com, with some estimates of its value running as high as $1 million.

With such a descriptive name, Ballot.com would be ideal for an investor, major media company, political candidate, or even a market research company. With the word ballot trending in Googles search statistics, this domain name also has large advertising potential.

Major Political Publishing Powerhouse HuffingtonPost.com proved its worth when it recently sold to AOL for $300 million US Dollars.

According to the domains current owner, ?Ballot.com provides boundless opportunities for state, local, national governments or candidates, market research companies, and investors who love premium virtual real estate.

The auction for Ballot.com is live now and open for bidding. It is 14 days long and set to end soon, on May 31st, 2012. Go here for more details now: Ballot.com Exclusive Online Auction

Tags: the Berkeley Daily Planet, 2012 Election Cycle, domain name, Rick Santorum, political candidate, Rick Perry

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AP Interview: Wozniak, Dotcom slam US piracy case

In this May 2012 photo released by Kim Dotcom, Apple cofounder Steve Wozniak, right, and Kim Dotcom, founder of file-sharing site Megaupload, stand together in Auckland, New Zealand. Wozniak said the U.S. piracy case against Dotcom is "hokey" and a threat to Internet innovation. Wozniak and Dotcom spoke out against the federal case in separate interviews on Wednesday, June 27, 2012. (AP Photo/Kim Dotcom)

In this May 2012 photo released by Kim Dotcom, Apple cofounder Steve Wozniak, right, and Kim Dotcom, founder of file-sharing site Megaupload, stand together in Auckland, New Zealand. Wozniak said the U.S. piracy case against Dotcom is "hokey" and a threat to Internet innovation. Wozniak and Dotcom spoke out against the federal case in separate interviews on Wednesday, June 27, 2012. (AP Photo/Kim Dotcom)

(AP) ? Apple cofounder Steve Wozniak says the U.S. piracy case against Kim Dotcom is "hokey" and a threat to Internet innovation.

Wozniak and Dotcom spoke out against the federal case in separate interviews with The Associated Press Wednesday. Dotcom, the flamboyant founder of file-sharing site Megaupload, is accused by federal authorities of facilitating Internet piracy on a massive scale. Charged with racketeering and money laundering, he's fighting U.S. attempts to extradite him from New Zealand.

Wozniak said he was visiting New Zealand last month to give a speech when he learned Dotcom couldn't come to see him because he was under house arrest. So Wozniak said he visited Dotcom and the two have kept in touch by email since.

"It's just kind of ridiculous what they did to his life," Wozniak said in a telephone interview. "An awful lot of Kiwis support him. The U.S. government is on thin ground."

Wozniak said plenty of people used Megaupload for legitimate purposes before federal authorities shut it down in January and filed criminal charges against seven of its officers, including Dotcom. In a dramatic raid the same month, New Zealand police swooped down in helicopters onto the grounds of Dotcom's mansion and cut their way into a safe room where they found him hiding. He was jailed for a month before a judge decided he could be monitored from his home.

Wozniak likened the Megaupload site to a highway and those who shared pirated movies and songs to speeding motorists.

"You don't just shut down the whole street because somebody is speeding," he said.

U.S. authorities allege in their indictment that Dotcom and Megaupload deliberately thwarted attempts to remove pirated material from the site by removing individual links but not the pirated content. Prosecutors claim the "mega conspiracy" netted Dotcom and others $175 million in illicit advertising revenue and download fees.

In an email interview, Dotcom said the charges are bogus.

"The more people learn about this case the more they realize that this type of copyright disagreement between Hollywood and new cloud storage technology is a political debate, not something that belongs in the criminal court and certainly not something to justify breaking down the door to my house," he said.

Dotcom said Megaupload had been applauded for its content removal policies. But he also acknowledged the site could host pirated files.

"What people uploaded and downloaded in their storage areas was up to them. One person's licensed music MP3 file is potentially another person's infringing file," he wrote.

Wozniak said he believes that people should pay for content. But he also believes in keeping the Internet open to encourage innovation. He said trying to shut down sites like Megaupload is futile.

"If you've got a huge steamroller coming, instead of trying to stop it, you should get out of the way," he said.

Wozniak, a founding member of the nonprofit Electronic Frontier Foundation which has sought to return frozen Megaupload files to users, said authorities need to release some of Dotcom's frozen financial assets so he can pay his mounting legal fees.

Born Kim Schmitz in Germany, Dotcom, who changed his name in 2005, has been in trouble before. He was convicted in 1998 in Germany of computer fraud and dealing in stolen phone cards. In 2002, he was convicted of manipulating the stock price of an Internet startup. Both times, he was fined but managed to avoid jail time. He also portrayed himself at the time as a super hacker, although German hackers spoken to by the AP say he did little of what he claimed. He moved to New Zealand after gaining residency in 2010.

Asked if he might be being fooled by a clever conman, Wozniak said it "could very well be the case."

"If I hear details that have credibility, I could totally turn against him," Wozniak said. "But I'm not finding it anywhere from what I've heard so far."

Dotcom has portrayed himself as the victim in rare interviews and on his new Twitter account, where he's posted photos of his family. He's also been thumbing his nose at authorities and the case against him. One photo he posted shows him standing in a field, his arms outstretched, with the caption "Flight risk!!!!" Another photo shows a colleague scrubbing bills in a bowl of soapy water: "Money laundering."

The irreverence and anti-authoritarian streak has appealed to many New Zealanders. In the eight days since starting his Twitter account, Dotcom has amassed more than 40,000 followers, rivaling the 51,000 who follow New Zealand's Prime Minister John Key.

Ira Rothken, one of Dotcom's lawyers, said he is pleased with the way New Zealand authorities have relaxed Dotcom's bail rules pending an August extradition hearing by gradually removing the restrictions on his movements and freeing some of his assets so he can pay personal expenses.

Dotcom's lawyers are seeking to have the case against the company ? although not the individuals ? thrown out on the basis that Hong Kong-based Megaupload had no legal presence in the U.S. They're also seeking the release of millions of dollars to pay for the legal fees.

Dotcom said he's optimistic New Zealand will deny the U.S. extradition request and is hopeful the U.S. will eventually drop the criminal case. Then, he said, he'd be free to focus on launching some new products, including a music service he's named "megabox." For now, he's got a new crowd offering support.

"That's why I love the Internet," he tweeted last week. "From zero to 1000 followers in one day. Let's make history together."

Associated Press

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Thursday, June 28, 2012

Stockton, California to file for bankruptcy

Stockton, California will become the largest U.S. city to seek protection from its creditors after its leaders approved a budget on Tuesday night based on the city filing for bankruptcy.

A Chapter 9 bankruptcy by the city of nearly 300,000 in California's Central Valley, about 85 miles east of San Francisco, could come as early as Wednesday.

Stockton's city council voted six to one in favor of the 2012-2013 budget after a contentious five-hour meeting where angry retired city workers pressed council members to reject the $155 million spending plan. It proposes eliminating retirees' medical benefits to help fill a $26 million budget deficit.

Retired police department employee Geri Ridge said she fears not being able to afford health-care insurance.

"I don't have that kind of income," said Ridge, 56, noting she is concerned a large share of her $1,895 monthly pension payment could be consumed by large insurance costs due to her history of heart attacks.

The council's vote followed three months of confidential talks between Stockton and its creditors aimed at averting bankruptcy. The negotiations ended on Monday with the city failing to win enough concessions to help close its shortfall for the fiscal year starting on July 1.

That left bankruptcy as the only way for Stockton to balance its budget in the near term while maintaining its current level of services and bringing stability to its battered finances, Mayor Ann Johnston said.

"It's heart-wrenching to think about the implications," she said. "I see no other solution."

Stockton officials have said since February their city's finances are suffering the combined effects of fiscal mismanagement over two decades, too much debt taken on in good times and generous pay and unsustainable benefits for city employees and retirees.

Stockton has also suffered a sharp drop in revenue since the collapse of its once red-hot housing market. The housing boom transformed the farming city into a distant bedroom community of the San Francisco Bay area and its bust put Stockton at or near the top of national foreclosure rankings in recent years.

To keep its budget in balance, Stockton has cut more than $90 million in spending in recent years and slashed its work force, including a quarter of its police officers, a pressing concern with a surge in violent crime in the city.

Deeper cuts to police payrolls would be intolerable, making a financial restructuring in bankruptcy a necessary if painful choice, according to council members who voted for the budget.

The $3.7 trillion U.S. municipal bond market has so far taken in stride Stockton's march toward bankruptcy despite the city's more than $700 million in bond debt. Bondholders and bond insurers are among Stockton's 18 creditors.

U.S. muni-debt landmark
Because municipal bankruptcies under Chapter 9 of the federal bankruptcy code are rare, especially for larger cities, Stockton could set important precedents for how different types of creditors are treated in such cases.

In the past, large cities such as Bridgeport, Connecticut, have seen filings for bankruptcy protection rejected by the court. In the most recent case in October 2011, a filing by Harrisburg, Pennsylvania, a city of nearly 50,000, was rejected because a state law barred municipalities of a certain size from seeking legal protection from creditors.

Lawyers representing Stockton also worked for Vallejo, California when it filed for bankruptcy in 2008. The former Navy town emerged last year from bankruptcy with sharply reduced payments for its retiree medical program.

At $4.23 billion, Alabama's Jefferson County last November set the record for the biggest municipal bankruptcy filing, which is still working its way through the court.

Stockton officials have been considering bankruptcy since February and calling for the kind of drastic action in its budget. It suspends $10.2 million in debt payments, a move likely to trigger further downgrades of Stockton by ratings agencies.

Stockton has already defaulted on about $2 million in debt since February, allowing the trustee for one of its bond insurers to seize a building once slated to be its future city hall and three parking garages.

The intentional default prompted Moody's Investors Service and Standard & Poor's Ratings Services to drop their credit ratings on Stockton. Moody's has cut its issuer rating for Stockton to a junk level Ba2 from Baa1 while S&P has cut its issuer rating on the city from BB to SD, one notch above its D default rating.

Stockton's budget would also cut spending on employee compensation and retiree benefits by $11.2 million. About $7 million in savings would come from cutting retiree medical benefits for one year and then phasing them out, an idea that stuns John Skaff, a retired police officer.

Skaff said knee injuries forced him off Stockton's police department after 19 years there and he expects to need knee-replacement surgery, though he is uncertain how to afford it without his health coverage. "It's a big hit for us," he said.

(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp

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