WASHINGTON POST: … Certain parts of the United States, however, are like Greece. Just read emergency manager Kevyn Orr’s134-page report on Detroit, which has $20 billion in unpayable debt…
Detroit could not have financed its bloat without Wall Street. Like German and French banks that bought Greek debt long past the point of reason, Detroit’s financial enablers cheerfully synthesized such securities as $1.43 billion in pension-funding “certificates of participation” — about whose “validity and/or enforceability” the Orr report expresses circumspect but ominous doubts…
Yet they are hardly the only ones to fail. In California, the cities of Vallejo, San Bernardino and Stockton have declared municipal bankruptcy, from which only Vallejo has emerged; Harrisburg, Pa., is insolvent. Last month Fitch Ratings warned that it might downgrade $8.7 billion of Chicago debt due to a growing unfunded-pension liability… (more)
