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Detroit files for bankruptcy, holy crap!

morgansforevermorgansforever Posts: 8,461 ✭✭✭✭✭
The city's long-term debt is estimated at $18.5 billion. How do you financial guys interpret this? I find it very disturbing.

Detroitlink
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Comments

  • PerryHallPerryHall Posts: 46,140 ✭✭✭✭✭
    I thought Obama saved Detroit.image

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • LochNESSLochNESS Posts: 4,829 ✭✭✭
    No that was us or rather US and our taxes ...
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  • morgansforevermorgansforever Posts: 8,461 ✭✭✭✭✭
    How many days does it take to become eligible for Chapter 9? Is this done by a Federal agency? I can't believe what I'm reading image
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  • jmski52jmski52 Posts: 22,863 ✭✭✭✭✭
    Arthur Laffer says that this is the first of many that will happen.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • LochNESSLochNESS Posts: 4,829 ✭✭✭
    NPR says ...
    • it's the largest city to file but not the first (so one of y'all should look up how the market was affected last time)
    • debt is over 300 million, long term debt is 14.5 billion
    • the "white house is monitoring the situation closely"
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  • renman95renman95 Posts: 7,037 ✭✭✭✭✭


    << <i>I thought Obama saved Detroit.image >>



    He's down to just "killing OBL."
  • DrBusterDrBuster Posts: 5,384 ✭✭✭✭✭
    Been on the radar for a long bit. Sad for my farmburbs hometown city but it needed to happen in 2009, if not earlier.
  • gsa1fangsa1fan Posts: 5,566 ✭✭✭
    Just a way for them to get out of paying city employees their retirement pensions.image
    Avid collector of GSA's.
  • LochNESSLochNESS Posts: 4,829 ✭✭✭


    << <i>How many days does it take to become eligible for Chapter 9? Is this done by a Federal agency? I can't believe what I'm reading image >>


    Papers have been filed, they're already Chapter 9.

    Current broadcast interviewee (some expert) is saying the municipal bonds market is already going nuts and nearby Oakdale(?) which has a AAA credit rating may be affected.
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  • Timbuk3Timbuk3 Posts: 11,658 ✭✭✭✭✭
    I should do the same.
    Maybe I'll get bailed out !!! image
    Timbuk3
  • DrBusterDrBuster Posts: 5,384 ✭✭✭✭✭


    << <i>Just a way for them to get out of paying city employees their retirement pensions.image >>



    There's a rash about to spread.
  • morgansforevermorgansforever Posts: 8,461 ✭✭✭✭✭
    <<There's a rash about to spread.>>

    Meaning there are other cities not far behind? Buffalo, Cleveland, Cincinnati?
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  • DrBusterDrBuster Posts: 5,384 ✭✭✭✭✭


    << <i><<There's a rash about to spread.>>

    Meaning there are other cities not far behind? Buffalo, Cleveland, Cincinnati? >>



    I would imagine more than that.
  • gsa1fangsa1fan Posts: 5,566 ✭✭✭


    << <i>

    << <i><<There's a rash about to spread.>>

    Meaning there are other cities not far behind? Buffalo, Cleveland, Cincinnati? >>



    I would imagine more than that. >>



    California, etc.............................................times up over POW!image
    Avid collector of GSA's.
  • ebaytraderebaytrader Posts: 3,312 ✭✭✭
    At some point you can expect the federal govt to step in and guarantee and/or take over public sector employee pensions so that states & municipalities get that albatross of their necks. It'll be politically expedient for the left. Otherwise, they would stand to lose the support of those unions.


  • << <i>

    << <i>I thought Obama saved Detroit.image >>



    He's down to just "killing OBL." >>


    The POS didnt even do that. The Navy Seals did
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  • fishcookerfishcooker Posts: 3,446 ✭✭
    Yeah those that can hold out the longest will likely get their bills paid by the Feds. After all, their money comes from thin air...
  • derrybderryb Posts: 36,825 ✭✭✭✭✭
    "But the economy is improving."

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • braddickbraddick Posts: 23,997 ✭✭✭✭✭
    Ah, Detroit, where its citizenry is dependent upon themselves. . .
    image

    peacockcoins

  • TwoSides2aCoinTwoSides2aCoin Posts: 44,294 ✭✭✭✭✭
    A venture capitalist's dream come true. Are you bullish on a metropolis ? You should be !
  • DoubleEagle59DoubleEagle59 Posts: 8,315 ✭✭✭✭✭
    Been in the news for a long time that this was going to happen.

    Many cities, districts and States (country??) could be next.
    "Gold is money, and nothing else" (JP Morgan, 1912)

    "“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)

    "I only golf on days that end in 'Y'" (DE59)
  • morgansforevermorgansforever Posts: 8,461 ✭✭✭✭✭
    <<A venture capitalist's dream come true. Are you bullish on a metropolis ? You should be !>>

    Do you think there are investors that see an opportunity?
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  • mhammermanmhammerman Posts: 3,769 ✭✭✭
    "Do you think there are investors that see an opportunity?"

    There are likely some folks from China that could look at the total debt and think this might be a nice entry into finding some decent land in a commercially well connected location to begin some colonization efforts ala Hong Kong. One thing for sure if it goes that way...all this PC silliness with the "underserved" population will be over and the Unions that drove that city into the ground will never be heard from again. Could be an interesting scenario. It would certainly dominate the news cycle for a while.

    Edited to add: Think of the Chinese buying the city as the latest evolution of the "Factory Outlet" or "Regional Distribution Center" for Chinese products.
  • Nov 9, 2011 6:46 PM ET

    Jefferson County, Alabama, filed the biggest U.S. municipal bankruptcy after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart.

    The county, home to Birmingham, the state’s most-populous city, listed assets and debt of more than $1 billion in Chapter 9 papers filed today in U.S. Bankruptcy Court in Birmingham.



    Jeffco officials react to being surpassed by Detroit as largest municipal bankruptcy in U.S. history

    July 18, 2013 at 6:40 PM, updated July 19, 2013 at 3:29 AM
    SKYLINE.JPGDowntown Birmingham in Jefferson County.

    BIRMINGHAM, Alabama -- Jefferson County no longer is the largest municipality to file a Chapter 9 bankruptcy in U.S. history.

    Detroit, with $18 billion in debt and liabilities, today eclipsed Jefferson County as the largest municipality to file bankruptcy.

    "This is one category I'm happy to be number two," said Jefferson County Manager Tony Petelos.

    Detroit's Chapter 9 case filed in U.S. Bankruptcy Court for the Eastern District of Michigan came after the city's emergency manager failed to reach agreements with bondholders, pension funds and other creditors to restructure Detroit's debt outside of bankruptcy court.

    link


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  • rickoricko Posts: 98,724 ✭✭✭✭✭
    Just one more step on the downward spiral of America....Cheers, RickO
  • DoubleEagle59DoubleEagle59 Posts: 8,315 ✭✭✭✭✭
    I went on Google Earth yesterday and ' travelled ' along many streets in Detroit.

    One such street 'Grand River' has empty lots and boarded up buildings.

    The only buildings that were operating were churches, Christian centers, community centers and the odd US Post office, oh and I forgot, one or two liquor stores and dry cleaners.
    "Gold is money, and nothing else" (JP Morgan, 1912)

    "“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)

    "I only golf on days that end in 'Y'" (DE59)
  • LochNESSLochNESS Posts: 4,829 ✭✭✭
    So ... what will this do to the PM market(s)?
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  • WinPitcherWinPitcher Posts: 27,726 ✭✭✭
    Time for another stimulus so the States can bail themselves out...................again.
    Good for you.
  • GoldbullyGoldbully Posts: 17,356 ✭✭✭✭✭


    << <i>Just one more step on the downward spiral of America....Cheers, RickO >>



    No argument here!!!!!
  • cohodkcohodk Posts: 19,141 ✭✭✭✭✭
    Another deflationary event.

    Yes, I see tremendous investment potential in Detroit.

    Bankruptcies are an excellent way to rid excess. I hope there are more. And no, these events do not make gold a guaranteed winner.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>Bankruptcies are an excellent way to rid excess. I hope there are more. And no, these events do not make gold a guaranteed winner. >>


    For municipalities bankruptcies are the way to negate outrageous public employee retirement pay and benefits that were recklessly promised earlier by municipal politicians seeking re-election. Promises were made that can no longer be kept, especially with declining revenue and a reduction in money veloctiy (generates sales tax income). Excess can generally be dealt with by internal reorganization/cutbacks in spending. Bankruptcy is used to void contracted promises that can otherwise not be reduced. Keep in mind that events such as Detroit can have a negative affect on the states fiscal status.

    Investment potential in Detroit wil not exist until Detroit sees real jobs and not entitlement income dependent residents. Like fiat money, cities can also experience a slow death.

    Detroit is a perfect example of what happens when jobs are destroyed, income earners leave, and the majority of the population is living off of entitlements. A classic case of Thatcher's "the problem with socialism is you eventually run out of other peoples' money." Detroit has run out and lost its sources of replenishment. While not the first municipality in modern times, Detroit is far from the last to get to this point. The affect of these events on gold is dependent upon creation of new money (QE) to help in a recovery - a very good possibility if enough large cities suffer the same demise.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • LochNESSLochNESS Posts: 4,829 ✭✭✭


    << <i>So ... what will this do to the PM market(s)? >>

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  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>

    << <i>So ... what will this do to the PM market(s)? >>

    >>


    The affect of these events on gold is dependent upon creation of new money (QE) to help in a recovery - a very good possibility if enough large cities suffer the same demise.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • bronco2078bronco2078 Posts: 10,227 ✭✭✭✭✭


    << <i>

    << <i>

    << <i>So ... what will this do to the PM market(s)? >>

    >>


    The affect of these events on gold is dependent upon creation of new money (QE) to help in a recovery - a very good possibility if enough large cities suffer the same demise. >>




    I don't think QE money will ever be used to help any little people.image
  • LukeMarshallLukeMarshall Posts: 1,983 ✭✭✭✭✭


    << <i>abandoned detroit slideshow >>



    Wow, that was quite a show...

    So ... what will this do to the PM market(s)?

    I was thinking about how much unrecovered copper in so many huge buildings.

    It's all about what the people want...

  • derrybderryb Posts: 36,825 ✭✭✭✭✭


    << <i>

    << <i>

    << <i>

    << <i>So ... what will this do to the PM market(s)? >>

    >>


    The affect of these events on gold is dependent upon creation of new money (QE) to help in a recovery - a very good possibility if enough large cities suffer the same demise. >>




    I don't think QE money will ever be used to help any little people.image >>


    don't forget the little people are voters. When enough of them are affected they become eye candy for a politician.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • PerryHallPerryHall Posts: 46,140 ✭✭✭✭✭


    << <i>

    << <i>So ... what will this do to the PM market(s)? >>

    >>



    I'm guessing Detroit city employees, pensioners, and contractors will be buying fewer PM's.image

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • cohodkcohodk Posts: 19,141 ✭✭✭✭✭
    Investment potential in Detroit wil not exist until Detroit sees real jobs

    The investment potential will be largely over by then. A smart investor buys assets and infrastructure first and then brings in the jobs.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • daOnlyBGdaOnlyBG Posts: 1,060 ✭✭


    << <i>I thought Obama saved Detroit.image >>


    Obama did not "save Detroit." George Bush began (and made the first payments amounting to $17.4 billion) to Chrysler and GM (Ford did not believe in accepting bailout money, and thus looked elsewhere for help). Chrysler and GM are hardly synonymous with Detroit- not only are they headquartered in different cities, but unlike corrupt cities, the recipients of the bailout money had to produce a somewhat coherent and viable plan toward recovery, and unlike corrupt cities, they were held accountable to their practice and results. Congress under Obama did vote on providing the remaining $84 billion to the industry, which I believe, has to be paid back. A corrupt city wouldn't pay that money back.

    Edited to add: this is coming from a man who's not a fan of American autos, no offense to anyone here
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  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭


    << <i>Ah, Detroit, where its citizenry is dependent upon themselves. . .
    image >>




    Just get a little dog to help with the crazies and tough guys


    Edited out so that's it

  • renman95renman95 Posts: 7,037 ✭✭✭✭✭


    << <i>abandoned detroit slideshow >>



    The architecture in that slide show is stunning...classic. What Detroit needs is to be in an episode or two of "This Old House" but on a grand scale. I love the melted clock...Dali-esque.
  • ebaytraderebaytrader Posts: 3,312 ✭✭✭


    << <i>

    << <i>I thought Obama saved Detroit.image >>


    Obama did not "save Detroit." ... >>



    No kidding.



    << <i> Chrysler and GM are hardly synonymous with Detroit- not only are they headquartered in different cities, ... >>



    GM's HQ is in downtown Detroit.


  • << <i>I thought Obama saved Detroit.image >>


    He couldn't find his ass with both hands and a flashlightimage
    UCSB Electrical Engineering....... USCG and NASA
  • streeterstreeter Posts: 4,312 ✭✭✭✭✭
    Have a nice day
  • derrybderryb Posts: 36,825 ✭✭✭✭✭

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • SpoolySpooly Posts: 2,108 ✭✭✭
    Detroit is a liberal utopia.......
    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • PerryHallPerryHall Posts: 46,140 ✭✭✭✭✭
    Detroit needs another five year plan.

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • StaircoinsStaircoins Posts: 2,566 ✭✭✭

    Nine homes currently selling for $100 or less in Detroit, including three for sale at $1 each.

    For less than the price of a tank of gas, you too can be a slumlord! image
  • cohodkcohodk Posts: 19,141 ✭✭✭✭✭
    Municipalities all have something in common -- unions
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

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