July 26, 2013 |
DETROIT - As the once-proud city of Detroit humbles itself in bankruptcy court, its financial future may hinge on this key question: Is the city obliged to its past? Or can Detroit renege on its promises to thousands of retirees for the sake of its present city services? The legal question at the heart of Detroit's bankruptcy filing has never definitively been answered by the nation's highest courts. But it could become increasingly important as cities from coast to coast are grappling with shortfalls in pension funds that left unchecked could force cutbacks to police, firefighters and other city services.
July 26, 2013
ALTHOUGH a municipality filing for bankruptcy protection is rare, you still ought to be paying attention to what happens to bondholders in the case of Detroit. The city's Chapter 9 filing likely will set some precedents, including how investors and/or their investment advisers view municipal bonds, also known as munis. "I think that the potential risks to the municipal-bond market are serious," said David D. Tawil, co-founder and portfolio manager for Maglan Capital, a New York investment firm that specializes in distressed assets.
July 25, 2013
KICKING the can down the road - delaying action on the hard problem - is one time-honored political strategy. Why do something today when you can wait until you are safely re-elected, or even longer? The bankruptcy of Detroit is proof of the flaw in that strategy. And the lesson we can learn from Detroit, says Jennifer Bradley, of the Brookings Institution, is that "any place that thinks it can kick the can down the road will find the road can drop off abruptly. " Certainly not all of Detroit's problems were of its own making.
July 25, 2013 |
ST. LOUIS - The Phillies will watch former San Francisco Giants closer Brian Wilson in a workout tomorrow in Los Angeles as they continue an attempt to upgrade a bullpen that entered yesterday ranked at the bottom of the National League in most major relief-pitching categories. Wilson was the closer on the 2010 Giants team that defeated the Phillies in the NLCS before beating the Rangers in the World Series. He has not pitched since April 2012, when he underwent Tommy John surgery to repair a torn UCL in his right elbow.
July 23, 2013 |
DETROIT - It wasn't easy making Detroit the largest U.S. city to file for bankruptcy protection, but it was the right decision, Michigan Gov. Rick Snyder said yesterday as he, the city's mayor and its emergency manager made the television talk show rounds. Snyder, a Republican, gave his blessing to emergency manager Kevyn Orr's decision to file for bankruptcy for Detroit on Thursday. "We looked through every other viable option," Snyder said on CBS' "Face the Nation. " "The debt question needs to be addressed.
July 23, 2013 |
DETROIT - The battle over the future of Detroit is set to begin this week in federal court, where government leaders will square off against retirees in a colossal debate over what the city owes to a prior generation of residents as it tries to rebuild for the next. Soon after Detroit emergency manager Kevyn Orr and Gov. Rick Snyder approved a bankruptcy filing Thursday, groups representing the 20,000 retirees reliant on city pensions successfully petitioned a county court to effectively freeze the bankruptcy process.
July 22, 2013 |
A national urban policy would not have saved Detroit, but the city's bankruptcy filing Thursday was a vivid reminder of how the problems of America's cities have long ceased to be a focal point of the political debate in presidential campaigns or the policy debate in Washington. The closest the candidates came in 2012 to the specific topic of the cities was the contentious argument between President Obama and Mitt Romney over the federal bailout of the auto industry. Obama pummeled Romney for an article he had written for the New York Times in late 2008 opposing federal intervention.
July 21, 2013 |
Detroit's historic bankruptcy filing aroused opposition from angry investors, public employees, and retirees Friday, as state leaders framed the action as their best shot at putting the ailing city on a road to recovery. Flanked by posters of the city's skyline with the words "Reinventing Detroit," the state-appointed emergency manager said Friday that he hopes the roughly $19 billion bankruptcy will provide the fiscal breathing room needed to repair the city's infrastructure and restore basic services.
July 21, 2013 |
Detroit's historic bankruptcy filing could raise anxiety - and, thus, interest rates - in the nearly $4 trillion municipal bond market, which cities use to fund construction and public-works projects, finance officials said. Detroit owed creditors about $19 billion. Others said that Detroit was so financially damaged and the bankruptcy so anticipated that the effect will be muted. Whatever the case, the bankruptcy filing did not come at a good time. The municipal bond market has been under pressure because of speculation that the Federal Reserve could curtail its bond-buying program this year.
July 20, 2013 |
Detroit filed the largest municipal bankruptcy in the nation's history Thursday, marking a new low in a long decline that has left the U.S. automaking capital bleeding residents and revenue, while rendering city services a mess. The city, which was the nation's fourth largest in the 1950s with nearly two million inhabitants, has seen its population plummet to 700,000 as residents fled increasing crime and deteriorating basic services, taking their tax dollars with them. As Detroit faced an estimated debt of $19 billion, the state in March appointed an emergency manager vested with extraordinary powers to rewrite contracts and liquidate some of the city's most valuable assets.