Jordan Hayes
CB writes:
> I'm just thinking that the bondholders don't have to
> worry much about the bonds being paid off by the municipality ...
It certainly has happened that muni bonds have been defaulted on in the past.
NYC in 1975 and Cleveland in 1978 are well known examples.
More here:
http://www.publicbonds.org/public_fin/default.htm
/jordan
^^^^^^^ CB: Thanks again, Jordan. Actually, to be frank, lately I have mentioned that in its current fiscal crisis Detroit might consider defaulting on bonds and pay city workers instead. Of course that raises the threat of receivership as happened with NYC in 1975. Wallstreet sent in their boy ,Felix Rohatyn, to get the money.
http://articles.latimes.com/2009/may/23/local/me-rohatyn23
Expert who helped New York City avoid bankruptcy in 1975 has some advice for California Felix Rohatyn says the key is gutsy political leadership and a realistic plan that includes sacrifices by everybody.
^^^^^ CB: "Everybody" but the bondholders, no doubt..