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Detroit is about to run out of cash.

Krazen1211 9,939 441 November 21, 2012 at 08:25 AM Get Bloomberg Businessweek Coupons
http://www.businessweek.com/ap/20...n-december

http://www.wxyz.com/dpp/news/regi...-not-found



Detroit's financial condition is rapidly deteriorating, and City Hall could run out of cash in December, an official told a state oversight board Monday.

The city must find new revenue sources, he said, blaming the worsening outlook on rising medical expenses and lower receipts from taxes and other revenue sources than the city had previously projected.





Time to Let Detroit Go Bankrupt.

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Joined May 2007
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#46
Quote from SGTSlick View Post :
I suppose a major US city would be considered "too big to fail", right?
It likely depends on the administration in power at the time Wink
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I've decided to start ignoring posters that believe in "alternative facts".... hard to make a blind person see anything
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#47
Quote from SGTSlick View Post :
I suppose a major US city would be considered "too big to fail", right?
Let's hope not.

I wonder how much money it would take to save Detroit anyway. The probable answer is "too much" or "money alone can't save Detroit."
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#48
Quote from mohater View Post :
Ironically, if you've exhausted your ability to borrow, you're well beyond insolvency.

Take a look at Detroit and comparably sized cities like Charlotte and how much they spend on things like police pensions.
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#49
Quote from Krazen1211 View Post :
Take a look at Detroit and comparably sized cities like Charlotte and how much they spend on things like police pensions.
That's not even it.

Look at places that have ran itself into the ground: lots of municipalities in CA/the entire State of CA, Detroit, etc.

Spending into oblivion and then just borrowing the hella outta everything because people view gov debt as near riskless.
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#98 [bash.org]+(4020)- [X]

<ikkenai> i don't have hard drives. i just keep 30 chinese teenagers in my basement and force them to memorize numbers
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#50
It's coming....

Quote :
Decision Day Nears for Detroit Bankruptcy
[wsj.com]
City's Emergency Manager May File Case Within Days
Quote :
DETROIT—This automobile capital and onetime music-industry powerhouse could within days become the country's largest-ever municipal bankruptcy case, people familiar with the matter said, as the city's emergency manager accelerates his plan for restructuring nearly $20 billion of long-term liabilities.

The expected bankruptcy filing would come after Kevyn Orr, the emergency manager, failed to reach agreements with enough of the city's bondholders, pension funds and other creditors to restructure Detroit's debt outside of court.
Quote :
As city tax revenue has fallen, Detroit has been on financial life-support, spending on average $100 million more than it took in every year since 2008.
Quote :
Municipal-worker retirees are set to get less than 10% of what they are owed under the plan.

The decision by the nation's 18th largest city by population is being closely watched by other states and municipalities burdened by steep pension and retiree health costs. But others say Detroit's problems are so acute that its case is an exception.

Mr. Orr, a longtime corporate bankruptcy lawyer, said in an interview that he still holds out hope the city can avoid a Chapter 9 filing.

But aides to Mr. Orr said the odds of an out-of-court settlement are extremely slim. So far, the city has an agreement to pay some secured creditors 75 cents on the dollar on nearly $340 million in debt. In exchange, the city would get back $11 million a month in tax revenue from the city's three casinos originally used as collateral to back the debt. But negotiations with unsecured creditors who were offered about $2 billion to cover $11 billion in debt remain stalled.
Thankfully:

Quote :
Any hope of a federal bailout to avert bankruptcy fizzled last week after Mr. Orr spoke with the White House, including Obama confidante Valerie Jarrett, according to city and White House officials.
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#51
This is great. I think every city that has been mismanaged (like detroit) should line up and file bankruptcy just like detroit imo.
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#52
If you were a smart bond investor, you likely invested in essential service secured bonds like water and sewer services nod

What comes next in Detroit bankruptcy? Here are 12 things to expect
[freep.com]

Quote :
Chapter 9 bankruptcy is poorly understood, in part because it happens so infrequently. Detroit's case, filed today, is the largest in U.S. history.

Here's what happens next:

_ Alice Batchelder, chief judge of the U.S. 6th Circuit Court of Appeals, will appoint a bankruptcy judge to oversee the city's case.

_ The bankruptcy judge will determine where to hold hearings, which could take place in Detroit, Kentucky, Ohio or Tennessee.

_ An automatic stay will be issued on most of Detroit's bills, including unsecured debts, said Ken Schneider, a bankruptcy attorney with Detroit-based Schneider Miller PC. The city will continue to pay secured creditors, including water and sewer bondholders, who have the right to seize city assets if Detroit fails to pay.

_ An automatic stay also will be issued on most lawsuits against the city, including outside challenges by pension officials and union members. This means hearings in those lawsuits will be indefinitely delayed. The plaintiffs can recast their arguments inside bankruptcy court, said Jay Welford, a bankruptcy attorney and partner at Southfield-based Jaffe Raitt Heuer & Weiss.

_ The city doesn't need approval to continue services. For example, the police, fire, water, sewer and public works are unaffected by the bankruptcy filing for now and will operate as usual. However, cuts are possible in the future.

"You have the ability to use your cash," Welford said. "You don't need court approval."

_ Creditors likely can challenge the city's right to file for bankruptcy by issuing motions to dismiss the case.

_ In this case, bondholders and pension officials could accuse the city of failing to negotiate "in good faith," one of the key criteria allowing the city to file for bankruptcy. A ruling could take days, weeks or months.

_ The city also will have to prove it is insolvent, another stipulation required to file for Chapter 9 bankruptcy. Emergency manager Kevyn Orr recently authorized the city to stop making payments on some debts. Bankruptcy experts say they believe the city has satisfied this requirement by failing to pay its debts, but creditors may still find wiggle room to argue the city is not insolvent.

_ If the judge authorizes the city to move forward with a Chapter 9 bankruptcy case, Orr would propose a plan of reorganization. Bankruptcy court allows the city to restructure its operations and its balance sheet. This could involve budget cuts, layoffs, the sale of assets, slashing union contracts and dramatically reducing city debts, including outstanding bonds.

_ The city will attempt to win support for the reorganization plan from creditors, including secured bondholders, general obligation bondholders, unions and pension boards. If the city wins enough support, the plan would be put to a vote — and with enough support, the city could emerge from bankruptcy. Without enough support, the judge could tell the city it must continue to negotiate with creditors.

_ Orr eventually may pursue a "cram down" procedure, which would require winning support of a minority of creditors and convincing a judge that dissenting creditors are not being reasonable. "We'll probably get to that because I don't see how creditors are going to accept what he's talking about paying them," Schneider said.

_ The length of the case is widely debated. Some experts say they believe it could be as short as several months. Others say it could take years.
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#53
Quote from rrc06 View Post :
Municipal-worker retirees are set to get through ess than 10% of what they are owed under the plan.

Thankfully:
This is something to cheer about? Some retirees earned their pension by working their ass off the majority of their life, but yes they shouldn't receive a dime.
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__________________ - It dives and it jumps and it ripples like the deepest ocean.
#54
Quote from WindySummer View Post :
This is something to cheer about? Some retirees earned their pension by working their ass off the majority of their life, but yes they shouldn't receive a dime.
And the successive line of Democratic mayors and Democratic City Council members should be held responsible. Perhaps a hard lesson to learn, but, one that must be learned perhaps to break the cycle of dependency that the Democrats have created for blacks and that blacks have blindly latched onto for 40 years in this once great city.
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#55
Quote from WindySummer View Post :
This is something to cheer about? Some retirees earned their pension by working their ass off the majority of their life, but yes they shouldn't receive a dime.
Why should the country pay for the reckless decisions of Detroit's predominantly democratic led government the last several years?

Any pensioner that turned on the news the last decade knew that Detroit was a financial disaster waiting to happen. Crime going up, tax revenue and populating disappearing
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#56
http://features.blogs.fortune.cnn...ce=cnn_bin

Quote :
Detroit, meanwhile, stumbled over a period of decades into irreversible insolvency because its elected officials dithered and dissembled and argued, instead of undertaking tough measures to close fiscal gaps. In truth, the city's financial liabilities were created by the very people who should have been resolving them: One administration after another promised wages, job guarantees, and pensions to city workers that were simply unsustainable.

Why did elected officials make those promises? Probably because they never feared being held accountable. Many of them, dead or retired, will have been correct.
And no one in office was able to reverse the decline of public services such as police and fire protection, emergency medical, transportation, and lighting. Since the 1980s, a few hundred thousand residents threw in the towel and moved away, leaving the 700,000 remaining to bear the brunt. Now those who remained will not get the basic city services they deserve, the police and fire protection they deserve, or the emergency medical care they deserve.

The criminality of ex-Mayor Kwame Kilpatrick and ex-council president Monica Conyers and others, though disgraceful, can't really be blamed as a key factor in the city's failure.
The current mayor, Dave Bing, labored mightily -- to his credit -- to slash budgets and reason with public employee unions, only to watch his efforts undermined by a city council that seemed never to comprehend or be moved by the horrific financial statements they were party to. Just one example: A deal to relieve the city of the expense of maintaining Belle Isle -- a jewel in the middle of the Detroit River -- was shot down because the council somehow viewed its transformation into a state park as an insult, a stain on the city's pride.
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#57
Quote from WindySummer View Post :
This is something to cheer about? Some retirees earned their pension by working their ass off the majority of their life, but yes they shouldn't receive a dime.
If only someone had told the public unions that their pensions were too generous and that it would ruin the city and they need to stop voting for people that spend money they don't have.
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If I appear to be ignoring your posts, it's probably because you are on my ignore list.

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#58
found this article from May of 2013..

if you want the full article here the link.. but aside from people moving away this is issue:

http://money.msn.com/now/post.asp...d874b0d530

Quote :
5 reasons Detroit is broke

1. Everyone moved away. etc..
2. So Detroit had to borrow. etc..
3. And it can't borrow more. etc..
4. Too many employee unions. There are 48 employee unions in the city, and there's no way Detroit will reach consensus with all of them.

5. Too many pension obligations. Retirees outnumber current employees by more than 2 to 1, and retiree benefits are one of Detroit's biggest bills. Last year, more than 8,000 former police officers and firefighters collected an average of $30,000 each, The Detroit News reports. Nearly 12,000 retired city workers or their spouses collect about $19,600 each year.
there's your problem.. I bet anyone qualifying to retire in that area is doing it right now to... before they modify reform current employee pensions. Which will of course end up going to court.
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#59
Quote from DJPlayer View Post :
found this article from May of 2013..

if you want the full article here the link.. but aside from people moving away this is issue:

http://money.msn.com/now/post.asp...d874b0d530



there's your problem.. I bet anyone qualifying to retire in that area is doing it right now to... before they modify reform current employee pensions. Which will of course end up going to court.
Blood from a turnip. The pensioners will be screwed.
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#60
Facts and figures:

Charlotte municipal budget: $1.7 billion
Ft. Worth municipal budget: $1.4 billion
Detroit municipal budget: $2.5 billion

Charlotte police department budget: $210 million
Ft. Worth police department budget: $200 million
Detroit police department budget: $340 million


Which of these is not like the others?
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