Detroit emergency manager Kevyn Orr is due to unveil his restructuring plan for the debt-laden...


Detroit emergency manager Kevyn Orr is due to unveil his restructuring plan for the debt-laden city today to public labor unions, bondholders and bond insurers, including MBIA (MBI) and Assured Guaranty (AGO). Orr will reportedly try to persuade creditors to accept as little as 10 cents on the dollar for the city's debt. He has indicated that creditors would be far better off compromising now than taking their chances with a Chapter 9 bankruptcy filing.

Comments (15)
  • Ben Bernankes friend
    , contributor
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    I think it involves J.V.
    14 Jun 2013, 07:02 AM Reply Like
  • brachiosaurus
    , contributor
    Comments (226) | Send Message
     
    how everybody forgets the scale to which Texas was bailed out after the S&L crisis. Texas received an injection equivalent to 1/4 of its GDP. Not loans, direct cash.
    14 Jun 2013, 10:27 AM Reply Like
  • chopchop0
    , contributor
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    Did Half of TX's population stop paying property taxes? Did TX promise unsustainable benefits to its state workers?
    14 Jun 2013, 01:24 PM Reply Like
  • brachiosaurus
    , contributor
    Comments (226) | Send Message
     
    No it was the fault of private real estate speculators, failed businesses, with under-regulated banking institutions that couldn't pay back the deposits of ordinary Texans.
    If the Federal government didn't come to the rescue, Texas would look a lot like Michigan today. The auto-bail out was nothing compared to what Texas received.
    14 Jun 2013, 03:02 PM Reply Like
  • caupachow
    , contributor
    Comments (523) | Send Message
     
    I hope they get it all straightened out by January, I'm taking the family there for vacation in early February :-)
    14 Jun 2013, 11:42 AM Reply Like
  • jmodrkrk
    , contributor
    Comments (94) | Send Message
     
    really?
    14 Jun 2013, 01:13 PM Reply Like
  • caupachow
    , contributor
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    @jmo Just kidding, we are going to Cleveland instead which isn't as nice as Detroit but we'll make do.
    14 Jun 2013, 02:29 PM Reply Like
  • layzredfox
    , contributor
    Comments (26) | Send Message
     
    I don't know about that. Cleveland seems to be trying awfully hard to catch up with its big brother at times.
    15 Jun 2013, 09:30 AM Reply Like
  • jmodrkrk
    , contributor
    Comments (94) | Send Message
     
    i seriously hope you are joking. either cleveland (the mistake on the lake) or detroit in february sounds like a terrible time.
    16 Jun 2013, 10:24 PM Reply Like
  • mrlasvegas
    , contributor
    Comments (2) | Send Message
     
    Half of the adult population of Detroit is functionally illiterate. If they can't work for government any longer what can they do?
    14 Jun 2013, 12:40 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (3412) | Send Message
     
    Wall Street says: " Go now, young folks, go into the Inner Cities, and Make a Difference!"

     

    Who created the Inner Cities by the way?
    14 Jun 2013, 04:42 PM Reply Like
  • Jason Merriam
    , contributor
    Comments (955) | Send Message
     
    Detroit is a victim of its own circumstance(s): poor management, ridiculous labor and legacy costs (retiree costs account for 1/3 of the city's budget) and having to navigate through 48 separate bargaining units.

     

    As for a shrinking revenue and tax base? Should this come as any surprise?
    14 Jun 2013, 07:15 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (1687) | Send Message
     
    Anyone stepping up to potentially buy Detroit muni debt? This "10 cents on the dollar" stuff is nonsense, and is Orr's opening salvo to get attention focused. There's some water/sewer revenue backed bonds out there, and they are insured by MBIA and Assured.
    15 Jun 2013, 09:29 AM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3090) | Send Message
     
    Details remain sketchy and it will be interesting to see where the heaviest hits fall. Will they fall on creditors or parasitic union workers and their lavish benefit and retirement plans?

     

    Detroit is the poster child for dysfunctional policies that encourage dependency, reward reckless procreation and fail to curb union excesses at the expense of job losses. Across the board spending cuts must be imposed while, at the same time, offering strong incentives to businesses to locate and/or remain in the city.

     

    These are the issues and problems and not lack of infrastructure which Emergency Manager Orr want to expand. The only sensible thing said thus far is Detroit has already started negotiations with its surrounding counties over a possible deal to sell its water system to an independent authority.

     

    But then what they do with the cash is another issue; if it continues to flow into bottomless pits it only delays harder decisions at which time the US Treasury may become involved or, alternatively, the Fed starts buying worthless Detroit paper.
    15 Jun 2013, 10:44 AM Reply Like
  • june1234
    , contributor
    Comments (4341) | Send Message
     
    Detroit joins city of Stockton, San Bernandino, CA, Jefferson County,AL and city of Harrisburg,PA. With $3trillion worth of muni debt out there as rates rise so will the number of cities and counties defaulting on their debt obligations. Chrysler just announced it was freezing pension plan for 8000 of its employees .
    15 Jun 2013, 11:55 AM Reply Like
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