Moody's Downgrades Stockton's Credit Rating

From the Stockton Record:

Stockton's credit rating was downgraded Monday by Moody's Investors Service, which said the city's shallow reserves and failure to control spending weakened its standing in a downtrodden economy...Moody's, a major Wall Street credit-rating agency, lowered Stockton's debt rating from A1 to A2, from the fifth-highest to the sixth-highest investment grade.

"The downgrades reflect the city's deteriorated financial position, which is not expected to improve in the near term," Moody's said in a statement. The agency said Stockton was among those cities most affected by the housing market's collapse, its foreclosure rate among the nation's highest and its new home construction at a decade low.
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To become financially healthy will require that Stockton close the gap between revenues and expenses, [Chief Financial Officer Mark] Moses and acting Budget Officer Kathleen VonAchen said. "If we're not going to become like Vallejo, that's what we're going to have to do," Moses said.

From the Sacramento Business Journal (hat tip Melanie):

Facing increasing losses and regulatory pressure, IndyMac Bancorp Inc. on Monday said it would close its forward mortgage business, and cut more than half of its 7,200-person work force.
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The company had more than 130 employees in its Rancho Cordova office when it last announced job cuts in January. The letter from Perry said it would be retain 800 people at Freedom Financial, which has employees in Sacramento, Irvine and Atlanta.