Skip to content
Catholic Online Logo

By Catholic Online (NEWS CONSORTIUM)

7/19/2013 (1 year ago)

Catholic Online (www.catholic.org)

Detroit files for bankruptcy.

Detroit filed bankruptcy Thursday, hopefully ending a long, terminal slide into insolvency. The city has been long beset by lost jobs, urban decay, and massive liabilities for public employees. Despite the inherent problems, Obama pledged to keep Detroit afloat. Today, that pledge failed.

Large areas of Detroit are almost entirely abandoned.

Large areas of Detroit are almost entirely abandoned.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

7/19/2013 (1 year ago)

Published in Business & Economics

Keywords: Detroit, Obama, bankruptcy, failed, bonds, pensions


DETROIT, MI (Catholic Online) - With the stroke of a pen, Gov. Rick Snyder approved the Detroit's plan to file bankruptcy. Detroit is now the largest metropolitan center in the nation to make such a declaration. The city has been approaching insolvency for years.

The slid into bankruptcy has been a long one, with Obama pledging in 2012 that he would not allow Detroit to go bankrupt. That promise apparently only applied to the auto industry.

The city faces more than $18 billion in debt, accrued over years of lost jobs, high public wages and benefits, and urban blight. The city has the highest murder rate in over 40 years, and at least 78,000 abandoned buildings. Some areas are almost entirely deserted.

Creditors are understandably upset at the decision. It is very possible that municipal bonds could be affected by the filing, which the possibility alone makes the national municipal bond market weaker. After all, if Detroit can reduce its bond obligations, then so might other cities in financial troubles.

This could in turn, lead to higher borrowing rates for distressed cities, pushing some cities over the edge.

Other creditors, such as the public pension fund will also be drawn into the fight. Public pensions have been called out as one of the major burdens affecting the city.

The details of the bankruptcy filing remains secret, but it is expected that the city will try to work out individual deals with creditors that are willing to negotiate.

"There were no other viable alternatives," Snyder told reporters during a press conference when he authorized the filing.

City officials say they hope the city will emerge from  bankruptcy quickly, hopefully next year.

Meanwhile, city Mayor, Dave Bing, who had no power in the bankruptcy decision because of a change in state law, said "As tough as this is, I didn't want to go in this direction," Bing said. "Now that we are here, we have to make the best of it. If it is going to make citizens better off, this is a new start for us."

For now, creditors, and the people of Detroit, can expect difficult times ahead, but there may be light at the end of the tunnel for the city, if the proceedings go smoothly. However, given the size of the city's liabilities, that may be a bit optimistic.

---


Pope Francis: end world hunger through 'Prayer and Action'


Copywriter 2015 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for March 2015
Universal:
Scientists: That those involved in scientific research may serve the well-being of the whole human person.
Evangelization: Contribution of women: That the unique contribution of women to the life of the Church may be recognized always.


Rosaries, Crosses, Prayer Cards and more... by Catholic Shopping .com


Comments


More Business & Economics

World's discarded electronic junk building up into massive toxic dump Watch

Image of Less than 16 percent of global e-waste is being diverted from landfill into recycling and reuse.

By Catholic Online (NEWS CONSORTIUM)

Television sets, washers and driers, stereos - broken, discarded, and then thrown away, are creating a massively toxic waste dump of gargantuan proportions. The irony in all this "e-waste" is the fact that precious metals such as gold and silver are also thrown ... continue reading


Australian father-and-son team raises $10 MILLION for beehive project Watch

Image of The beehive symbolizes productive activity, and for father and son Cedar and Stuart Anderson of Australia, their project was literally that.

By Catholic Online (NEWS CONSORTIUM)

The beehive symbolizes productive activity, and for father and son Cedar and Stuart Anderson of Australia, their project was literally that. Nearly 30,000 people have funded their "Flow Hive" project on Indiegogo for $10 million dollars. Not bad at all for such ... continue reading


'Slow ya roll' Obama. You spoke too soon? Job growth suddenly slows down Watch

Image of

By Catholic Online (NEWS CONSORTIUM)

Intent on rallying the nation on its improved economy, U.S. President Barack Obama appears increasingly aware that threats are gaining speed that could derail job growth. LOS ANGELES, CA (Catholic Online) - "Our economy has been growing, we've got momentum," ... continue reading


Federal taxes unbelievably through the roof for February Watch

Image of Uncle Sam took in a lot of cabbage for the first few months of 2015. Why is the U.S. still trailing a momentous deficit, then?

By Catholic Online (NEWS CONSORTIUM)

Uncle Sam took in a lot of cabbage for the first few months of 2015. Inflation-adjusted federal tax revenues hit a record $1,185,613,000,000 in the first five months of fiscal 2015. Why is it that the U.S. federal government still ran a $386,537,000,000 deficit ... continue reading


Top 10 most financially important cities in the world Watch

Image of

By Hannah Raissa Marfil (NEWS CONSORTIUM)

New York City is still the most important center in the financial world, according to the latest ranking made by the Long Finance in The Global Financial Index 17. In the latest rankings, it was observed that more cities in Asia are becoming important within the world ... continue reading


Apple topples AT&T from Dow Jones in reflection of iPhone's dominant position Watch

Image of The move by S&P Dow Jones Indices had been widely anticipated since a seven-for-one stock split in June 2014.

By Catholic Online (NEWS CONSORTIUM)

Largest company in the world, Apple will join the Dow Jones Industrial Average to replace AT&T. The change reflects the dominant position of the iPhone maker in the U.S. consumer economy today. The figures tell the tale: Apple has a market capitalization of ... continue reading


'Underage Red': Sephora shocks consumers with inappropriately named lipstick shades Watch

Image of

By Hannah Raissa Marfil (NEWS CONSORTIUM)

With lipstick shades called "Underage Red" and "Lolita," the cosmetic retailer brand Sephora is under fire once again. Using names that refer to young girls being described in a sexualized manner, the lipstick shades grabbed the attention of shoppers, eventually ... continue reading


Oprah Winfrey sadly shuts down Harpo Studios forever Watch

Image of 61-year-old, Oprah Winfrey continues to play an active role in Hollywood, despite the ending of her talk show and now Harpo Studios.

By Abigail James (NEWS CONSORTIUM)

Oprah Winfrey is set to shut down production at her Chicago-based Harpo Studios by the end of 2015. After much thought, the billionaire mogul has decided production for her personal network OWN will be better done in Hollywood. LOS ANGELES, CA (Catholic Online) - The ... continue reading


SHINY, RED APPLE: Computer giant is now twice as big as world's second largest firm, ExxonMobil Watch

Image of Strong sales of the larger-screened iPhones resulted in the largest quarterly profit reported by a company, with device sales rising 29.5 percent in the final three months of 2014 to $74.6 billion,

By Catholic Online (NEWS CONSORTIUM)

How big is Apple? The creator of the iPhone and tablets is SO BIG that it is now currently twice as big as its second-closest rival, ExxonMobil. This is being reflected in the stock market, where shares in Apple jumped 2.7 percent at the start of the week to ... continue reading


WHERE IS YOUR MONEY GOING? Government collects $1 trillion from taxpayers - and there's still a deficit! Watch

Image of Where is all of our hard-earned money going?

By Catholic Online (NEWS CONSORTIUM)

Where is all of our hard-earned money going? Real federal tax revenues for the first time ever topped $1 trillion in the first four months of the fiscal year, October through January, according to data released Wednesday by the U.S. Treasury. LOS ANGELES, CA ... continue reading


All Business & Economics News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, Acts 6:8-15
8 Stephen was filled with grace and power and began ... Read More

Psalm, Psalms 119:23-24, 26-27, 29-30
23 Though princes sit plotting against me, your ... Read More

Gospel, John 6:22-29
22 Next day, the crowd that had stayed on the other ... Read More

Saint of the Day

Saint of the Day for April 20th, 2015 Image

St. Marian
April 20: When St. Mamertinus was Abbot of the monastery which St. ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter