Government Pension Plans at Risk!

[VolAgent]

Would it not be the senior position holders that would have first shot at the underlying assets?

Either way its a cluster ####.

Again, an assumption here. I am assuming the sports arenas are current due to ticket revenue, concessions, tax rebates, etc. and that they will be separate from the bankruptcy.

Just an assumption.
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Detroit Retirement System Taxable Series A have a coupon rate of 4.9%.
These were the holders that were offered less than 10 cents on the dollar. What a nice thank you to the people who helped to secure those workers financial future!!

If you look at Refunding Bonds in the state of MI, you will see that Detroit is all over the first page of results. Paying off debt with more debt, its the american way these days!

Not a pretty picture up there.

Since when were bonds guaranteed to be paid? It definitely sucks to lose 90% of your investment, but bonds were never guaranteed. Detroit has been on the ropes for decades, if someone let themselves get sucked in for a high coupon rate, well now it is time to pay the piper.

 

[somarco]

Any idea how the D muni's were rated?

Private pension plans (the few that remain) have restrictions on what how they can invest.

Public plans can do pretty much anything they want.

 

[scagnt83]

Since when were bonds guaranteed to be paid? It definitely sucks to lose 90% of your investment, but bonds were never guaranteed. Detroit has been on the ropes for decades, if someone let themselves get sucked in for a high coupon rate, well now it is time to pay the piper.

I agree that suckers get sucked dry. But its just poor form (imo) to offer the pension bond holders less than everyone else. Why do they deserve less?
jmo


And I have no clue if the arenas, convention centers, etc are underwater or not. Im sure that they are at least the best of the worst.

 

[VolAgent]

I agree that suckers get sucked dry. But its just poor form (imo) to offer the pension bond holders less than everyone else. Why do they deserve less?
jmo


And I have no clue if the arenas, convention centers, etc are underwater or not. Im sure that they are at least the best of the worst.

I'm sure there was some reason for it, perhaps the pension bond is less senior. After all, who is going to liquidate a pension to pay the bondholders?

Of course, that should have been their first clue. Detroit was issuing bonds to meet their pension obligations. Nothing good was going to come of that.

 

[scagnt83]

Any idea how the D muni's were rated?

Private pension plans (the few that remain) have restrictions on what how they can invest.

Public plans can do pretty much anything they want.

Poorly. Mostly C rated, I think a few might have been B rated depending on available revenue streams.

I might have considered investing in their parking structure bonds. Have you ever seen the show Parking Wars? Those Detroit meter maids are brutal! Then if you have to go to impound it gets even more brutal!! LOL
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Detroit bankruptcy could hit millions of retirees

"The city now owes more than $17 billion—roughly $25,000 for every resident."

What is crazy is that is exactly the same as the median HOUSEHOLD income in Detroit!!!!!!!!


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Another article: Tear down chunks of Detroit: billionaire landowner
I would have to agree.

 

[Justin Bilyj]

Here in Cleveland they have started bulldozing blocks and putting up community gardens. It compliments the huge revitalization of growing local and supporting local which is happening in and around the city (even the city has a food garden).
I think they should just bulldoze the city, start growing food, start PRODUCING something besides poverty.

 

[scagnt83]

And the drama takes a new turn! And over Pensions at that!!

"Judge Rosemarie Aquilina said the bankruptcy filing violated the state's constitution, which she says prohibits actions that will lessen pension benefits of public employees, including those in Detroit."

Mich. judge calls Detroit bankruptcy unconstitutional; AG to appeal

 

[VolAgent]

And the drama takes a new turn! And over Pensions at that!!

"Judge Rosemarie Aquilina said the bankruptcy filing violated the state's constitution, which she says prohibits actions that will lessen pension benefits of public employees, including those in Detroit."

Mich. judge calls Detroit bankruptcy unconstitutional; AG to appeal

I thought bankruptcy was in federal court?

 

[moonlightandmargaritas]

I thought bankruptcy was in federal court?

The bankruptcy in federal court is going to trump these Michigan nitwits every time. Political grandstanding.

 

[VolAgent]

The bankruptcy in federal court is going to trump these Michigan nitwits every time. Political grandstanding.

Didn't we see this in NY already over the ELNY case, a state judge trying to hold someone in contempt for filing a federal case.

Whatever happened there? If a judge can prevent you from filing a petition in a court outside their jurisdiction we are in bad shape.