State Pension Problems Create Hidden Muni Risks

Comments (2)

  1. Erwin says:

    Yeah, munis have risk with bankruptcy courts having their way with owners of these securities while favoring less senior creditors. You mention the Detroit example where senior bond holders just got 74 cents on the dollar suggesting that was a raw deal. Here’s another Michigan example for you from the GM bankruptcy in 2009. A school teacher had her $70,000 in GM bonds revalued to less than $200, link below.

    The pensioners and future pensioners were made golden for the unions though the bankruptcy court with help of Obamas operatives while bondholders sucked eggs. So, anyways you can see it’s not just munis that get hurt by bankruptcy court in Michigan This can spread nationwide with appeals to U.S. Supreme Court treated as some kind of joke. Good luck with that!!


  2. David Rapson says:

    As a matter of law, states cannot file bankruptcy. Thus, your warning that “numerous state and municipal bankruptcies could occur” in the event that state revenue is unable to cover “pension fund holes” is simply wrong. Counties and municipalities, on the other hand, can file bankruptcy.


Add Comment