U.S. Markets closed

News Summary: Stockton bankruptcy trial starts

The Associated Press

ON THE BRINK: Lawyers for Stockton, Calif., said Monday that the city has cut its budget and services to the bone but has no choice about becoming the most populous U.S. city to enter bankruptcy.

NUMBERS GAME? Creditors countered that the city of 300,000 has padded its spending to enhance its ability to persuade a judge to let it seek Chapter 9 protection.

BURST BUBBLE: Stockton has become a symbol of government excess and financial ruin after the nation's housing bubble burst. Salaries, benefits and borrowing were based on anticipated long-term developer fees and higher property taxes that never materialized.