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Detroit files for bankruptcy


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18 replies to this topic

#1 ckn

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Posted 18 July 2013 - 10:11 PM

http://www.nytimes.c...cy.html?hp&_r=0

 

In essence, the city is now run by a bankruptcy lawyer who can override any decision made by an elected official.


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#2 Old Frightful

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Posted 18 July 2013 - 11:13 PM

So "Hitsville" now becomes an anagram of that name.

 

Perhaps they should roll out "Ain't too proud to beg" or "You keep me hanging on" for any creditors out there.


Edited by Old Frightful, 18 July 2013 - 11:19 PM.

               Hull-FC-V10-e1380711301940.jpg         HULL NOT VERY PROUD

 

 

                           "You're not City anymore!"

 

          (The chant of opposition fans to Hull Tigers' supporters this season)

 


#3 Griff9of13

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Posted 19 July 2013 - 07:53 AM

A sad example of what happens when you let capitalism rip completely unregulated. 


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#4 archibald

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Posted 19 July 2013 - 08:55 AM

 

A sad example of what happens when you let capitalism rip completely unregulated.


or you make ###### cars.

#5 Li0nhead

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Posted 19 July 2013 - 11:45 AM

They only borrowed $50 from Wonga till the end of the month. 


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#6 Northern Sol

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Posted 19 July 2013 - 03:07 PM

A sad example of what happens when you let capitalism rip completely unregulated. 

I can't see how.

 

This is the bankruptcy of the local council. A case of them spending money they don't have. What's that got to do with capitalism?

 

Detroit is screwed because its council is so dreadful that the richer whites have moved away lowering the tax base. All the car companies are based outside Detroit for similar reasons.



#7 Martyn Sadler

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Posted 19 July 2013 - 04:59 PM

A sad example of what happens when you let capitalism rip completely unregulated. 

The city of Detroit has been a virtual one-party state for the Democrats, who have ruled it without interrruption since 1962.

 

The result is what normally happens when you have one party that wins all the time - corruption and cronyism, and a taxation system that eventually becomes akin to extortion.

 

The city has spent money it didn't have, and has made deals with its workers that have been unsustainable, while the people and companies it taxed have moved away and the quality of services have declined catastrophically.

 

Of the $11 billion that the city owes in unsecured debt, $9 billion is down to pensions and health insurance plans which it can no longer pay for.

 

I think you have a rather simplistic view of what the problems are.



#8 Padge

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Posted 19 July 2013 - 05:32 PM

I can't see how.

 

Surely the banks lending them the money should be doing due and diligent financial checks to ensure that a lender is in a position to not over stretch themselves. As happens too often with banks, they think someone else will pick up the tab if things go belly up. In this case probably the state or federal government.

 

Banks for too long have loaned money to people, businesses, organisations and governments milking them for all they can and presuming they are bullet proof.

 

This has come about because of the continual deregulation of banks, The less restriction you put on them the bigger the gamble they will take.

 

Bankers, Stockbrokers all wheeler dealers are no different to any gambler, and that's all they are, they will always want to push it past their limits if allowed. 



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#9 Northern Sol

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Posted 19 July 2013 - 05:41 PM

Surely the banks lending them the money should be doing due and diligent financial checks to ensure that a lender is in a position to not over stretch themselves. As happens too often with banks, they think someone else will pick up the tab if things go belly up. In this case probably the state or federal government.

 

Banks for too long have loaned money to people, businesses, organisations and governments milking them for all they can and presuming they are bullet proof.

 

This has come about because of the continual deregulation of banks, The less restriction you put on them the bigger the gamble they will take.

 

Bankers, Stockbrokers all wheeler dealers are no different to any gambler, and that's all they are, they will always want to push it past their limits if allowed. 

Very little of the money has come from banks. Detroit financed itself by issuing bonds.



#10 Padge

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Posted 19 July 2013 - 06:08 PM

Very little of the money has come from banks. Detroit financed itself by issuing bonds.

So I go to the bank and say I want to buy a load of Detroit bonds they're offering a good deal, they say yeah here's the cash we don't give a$h!t what we lend to who off you go.

 

I'll also bet a lot of the Bonds were bought by Banks.



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#11 Northern Sol

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Posted 19 July 2013 - 06:41 PM

So I go to the bank and say I want to buy a load of Detroit bonds they're offering a good deal, they say yeah here's the cash we don't give a$h!t what we lend to who off you go.

 

I'll also bet a lot of the Bonds were bought by Banks.

And I bet most weren't.

 

And no bank would be idiot enough to lend you money to buy bonds. How would you repay the loan when the yield on the bond is probably lower than the interest on the loan?


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#12 Padge

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Posted 19 July 2013 - 07:53 PM

And I bet most weren't.

 

And no bank would be idiot enough to lend you money to buy bonds. How would you repay the loan when the yield on the bond is probably lower than the interest on the loan?

Oh that i so funny, you are actually saying that banks do not make stupid decisions, that is so funny.

 

Of course banks are idiots, that's why we have this whole mess.



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#13 Northern Sol

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Posted 19 July 2013 - 08:12 PM

Oh that i so funny, you are actually saying that banks do not make stupid decisions, that is so funny.

 

Of course banks are idiots, that's why we have this whole mess.

They often make risky decisions that don't make the expected returns. They do not invest money in things that have no possibility of any return.

 

The rate on bonds tracks the interest rate offered by banks on savings accounts as they are both deemed "safe" investments. However banks lend money at higher rates than they pay out. And if you think they don't then find an example of them doing this intentionally. Thus if you borrowed at the banks' lending rate in order to earn interest that is equivalent to what they would pay on a savings' account then you cannot possibly make money.


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#14 Methven Hornet

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Posted 19 July 2013 - 08:38 PM

Detroit files for bankruptcy

No it doesn't


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#15 Padge

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Posted 20 July 2013 - 08:08 AM

They often make risky decisions that don't make the expected returns. They do not invest money in things that have no possibility of any return.

 

The rate on bonds tracks the interest rate offered by banks on savings accounts as they are both deemed "safe" investments. However banks lend money at higher rates than they pay out. And if you think they don't then find an example of them doing this intentionally. Thus if you borrowed at the banks' lending rate in order to earn interest that is equivalent to what they would pay on a savings' account then you cannot possibly make money.

Banks don't buy bonds???????????

 

http://online.wsj.co...3557178704.html



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#16 Northern Sol

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Posted 20 July 2013 - 08:24 AM

Banks don't buy bonds???????????

 

http://online.wsj.co...3557178704.html

They do but in this case the bulk of the bonds seem not to be owned by the banks.

 

You also seem unaware that the sub-prime loans problem came about due to political pressure on banks to loan money to people that they would ordinarily turn down - largely poor black people living in cities like Detroit. A case of "Oh my God RACISM" trumping considerations like "Can this person repay the loan?"

 

Banks can be blamed for the way that the crisis spread. They've been shown time and again to be irresponsible with complex financial instruments such as derivatives but they aren't stupid when it comes to loaning money. Politicians are.



#17 Padge

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Posted 20 July 2013 - 09:55 AM

They do but in this case the bulk of the bonds seem not to be owned by the banks.

 

You also seem unaware that the sub-prime loans problem came about due to political pressure on banks to loan money to people that they would ordinarily turn down - largely poor black people living in cities like Detroit. A case of "Oh my God RACISM" trumping considerations like "Can this person repay the loan?"

 

Banks can be blamed for the way that the crisis spread. They've been shown time and again to be irresponsible with complex financial instruments such as derivatives but they aren't stupid when it comes to loaning money. Politicians are.

I have never borrowed money off my MP, I tend to borrow from the bank.

 

Politicians didn't just de-regulate the banks, for the hell of it, the banks pressurised the politicians for de-regulation. The regulations that were there to control the banks from dangerous excesses were in place for a reason, the politicians of the eighties believed the idiots running banks when they said the regulations where there for a bygone age and the were far better at self regulation. Time has shown that given enough rope the banks cannot help themselves, suicide is too tempting for them.

 

Your attempts to defend the banks are laughable.



Visit my photography site www.padge.smugmug.com
Radio 5 Live: Saturday 14 April 2007
Dave Whelan "In Wigan rugby will always be king"

 

Footballers spend 90 minutes pretending to be hurt, rugby players spend 80 minutes pretending they haven't been hurt.


#18 Northern Sol

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Posted 20 July 2013 - 10:15 AM

I have never borrowed money off my MP, I tend to borrow from the bank.

 

Politicians didn't just de-regulate the banks, for the hell of it, the banks pressurised the politicians for de-regulation. The regulations that were there to control the banks from dangerous excesses were in place for a reason, the politicians of the eighties believed the idiots running banks when they said the regulations where there for a bygone age and the were far better at self regulation. Time has shown that given enough rope the banks cannot help themselves, suicide is too tempting for them.

 

Your attempts to defend the banks are laughable.

You are projecting your own feelings about banks and trying to bend the facts to fit your narrative.

 

Start with the facts. Detroit Council borrowed money that they could never repay. They got this cash from a variety of sources but for the most part not from banks. It's not "unregulated capitalism" that's problem here but stupid and corrupt politics.

 

Banks are irresponsible with derivatives but that's a separate issue as derivatives aren't involved here.


Edited by Northern Sol, 20 July 2013 - 10:15 AM.


#19 Martyn Sadler

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Posted 20 July 2013 - 10:21 AM

I have never borrowed money off my MP, I tend to borrow from the bank.

 

Politicians didn't just de-regulate the banks, for the hell of it, the banks pressurised the politicians for de-regulation. The regulations that were there to control the banks from dangerous excesses were in place for a reason, the politicians of the eighties believed the idiots running banks when they said the regulations where there for a bygone age and the were far better at self regulation. Time has shown that given enough rope the banks cannot help themselves, suicide is too tempting for them.

 

Your attempts to defend the banks are laughable.

The American banks were pressured by Congress into lending to people who were unlikely to be able to pay their mortgages in order to ostensibly show that they were not discriminating against minorities.

 

The politicians effectively decided that they knew better than the banks who they should lend money to.

 

The outcome should have been predictable.

 

Tom Sowell is probably America's leading housing economist.

 

He explains it very briefly in this article: http://www.creators....-economics.html






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