Wall Street: $474 Million, Detroit: 0

Tyler Durden's picture

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The more time passes, the more skeletons emerge from the closet.  So what’s the punishment for an industry that has literally destroyed countless communities across the American landscape?  Trillions in taxpayer bailouts and even more control over our government.  They say “it would’ve been much worse without the bailouts.”  Tell that to Detroit.  From Bloomberg:

The only winners in the financial crisis that brought Detroit to the brink of state takeover are Wall Street bankers who reaped more than $474 million from a city too poor to keep street lights working.


The city started borrowing to plug budget holes in 2005 under former Mayor Kwame Kilpatrick, who was convicted this week on corruption charges. That year, it issued $1.4 billion in securities to fund pension payments. Last year, it added $129.5 million in debt, 9.3 percent of its general-fund budget, in part to repay loans taken to service other bonds.


“We have no lights, no buses, poor streets and now we’re paying millions of dollars a year on our debt,” said David Sole, a retired municipal worker and advocate for Moratorium Now Coalition, a Detroit group that fights foreclosures and evictions. “The banks said they need to be paid first. But there is no money.”


The debt sales cost Detroit $474 million, including underwriting expenses, bond-insurance premiums and fees for wrong-way bets on swaps, according to data compiled by Bloomberg. That almost equals the city’s 2013 budget for police and fire protection. 


Municipal borrowers from the Metropolitan Water District of Southern California to Harvard University in Cambridge, Massachusetts, have paid billions to banks to end interest-rate swaps that didn’t protect them.  


As banks were collecting fees from bonds, some targeted city homeowners with subprime loans that led to foreclosures, depressing real-estate values and tax revenue, Sole said. 


Last year, Detroit’s water and sewer utility borrowed to pay more than $300 million to unwind swaps.

The only thing that has recovered is Wall Street’s parasitic business model.  They will never stop until they destroy the entire country.

Full article here.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
cifo's picture

Is anyone here sleeping tonight?

CvlDobd's picture

Girl claims "I'm too tired tonight." So uh, I'll be up.

YBNguy's picture

Isn't Detroit the set for "The Walking Dead"?

DJ Happy Ending's picture

I hear Detroit real estate is booming and there is a thriving startup scene.

TwoShortPlanks's picture

I wonder what it feels like to live in a country which will die of financial cancer over the coming years.

About 2 years ago I wrote on ZH that business suits will one day be looked upon no better than a Nazi uniform, and that neck ties - after being used for hanging - will be put to good use staking up Tomato bushes.

Let's see if I'm right.

johnQpublic's picture

philly has a way of shooting themselves in their damn dirty democrat feet.....any city that allows folks to pay themselves a half a million dollars to retire for one day deserves what they get

and with almost zero public outcry.....

the entire state is fucked due to this same kinda crap statewide

houses in the poconos can be had for just about twice the cost of the yearly property tax+association fees

right behind detroit, and it was once a vacation mecca, and now its a mountain ghetto 

Widowmaker's picture

Damn right you are.

Faggots in pinstripes will join the rank of the Dodo.

Wach money try and "hide" among the decent, like rats in a chicken coup.

Son of Loki's picture

"There's never been a better time to buy a house," is what they say in Detroit on the radio. Just pull the  boards off the window and stomp out the rats and you'll have a perfect "Fixer-Upper."

SnobGobbler's picture

"thriving startup scene" = the six blocks around the casinos...

Pure Evil's picture

What!? Only 429 million dollars? That seems like spare change to Wall Street.

I guess the only people left making any money are in the sex and drug trade, and we all know where those profits go, right CIA?

Offthebeach's picture

If it is between Wall Street and union municipal slugs, I'll take The Street.
Fun Deeetroit. And a hundreds other Dem/union/welfare plantation urban zones.

All these dumps sold mamma down river years ago. Wall Street is just killing off the dead, pulling a trigger on Old Trigger that can't get around anymore.

Empires, cities commit suicide. Wall Street is just trying to stuff the skank sour corpse in a body bag and recover the financed grill and Medicaid titanium hip implants.

IamtheREALmario's picture

"Sold down the river"

The problem is debt. At first the debt allowed huge expansion... until the day it was clear to even the mathematically impaired and parasitically greedy that all debt cannot be repaid. There can be redistribution, but ultimately there must be failure and a re-set.

We all know where debt comes from.

Gidas19's picture

No, I'm waiting on my bank to open.




permafrost's picture

After you bulldoze your way into your bank, do you want to head over to the Audi graveyard? I'll pay for gas.

holdbuysell's picture

Nice linking of multiple articles. Well done.

yogibear's picture

Those in Cyprus need to head to Brussels to serve some justice!

Dr. Engali's picture

I'll be sleeping peacefully tonight. After the events in 08 I took everything out of the system knowing full well this is where we were headed. I only keep enough in the system to pay the bills, everything else, that isn't at the bottom of a lake, I can get my hands on in a moments notice.

Dr. Engali's picture

1600 Pennsylvania ave..... Better be careful though I sleep with an AR by the bed stand an a 9 mil under my pillow. My wife sleeps with a Remington 870 on her side of the bed.

Pseudo Anonym's picture

smart.  all those who accepted the fact that the hofjuden run fractional reserve central banking is a 2000 year old money changer scam of theft, usury and enslavement by debt took their money out of the fraudulent banking system and invested in other kinds of money, tangible money.

toady's picture

That's my situation too, except I've slipped a little. I've let an extra 10k accumulate. Now I'll be up all night until the bank opens ...

darteaus's picture

Might as well nod off then, it's going to be a while.

brettd's picture

Sleep?  The best show in town is watching these debt-rat-politicians destroy the things they profess to cherish.

fudge's picture

it's not night everywhere ,i got 12hrs to go before sleep .. lots o' charts to watch :-))


outamyeffinway's picture

I live near Detroit and I'll tell you, it's pretty terrible. The roads are literally coming undone. Inner city residents are fleeing en masse much to the chagrin of the suburbs. I was involved in an inner city gardening project and the only people who showed up were white people from the suburbs. Anyone who gets mad at that statement, fuck off, come here and live. I don't want to hear it.

"Detrois" as we call it is a war zone. I was in South America last year and I tell you, some of the parts of Lima, Peru, are indistinguishable from "Detrois" save a few faces.

Currently making plans to get away and I can't wait. Hopefully it works out.

DoChenRollingBearing's picture

Without doubt I would prefer living in Lima.

outamyeffinway's picture

I feel I should say there were some very beautiful parts of Lima(ish) that I would have been comfortable staying.

A Nanny Moose's picture

My only question: Who has the best Mountain Biking, and rafting? Peru, Chile, or Argentina.

Where would I find it easiest to traverse among the countries?

Meat Hammer's picture

I had the unfortunate experience of going to the Detroit area for business in 2007.  I'm a huge baseball fan and always wanted to see Tigers Stadium so I ventured downtown.  I've never seen such depression and ruin.  The paint was peeling off of the stadium; there were boarded up skyscrapers downtown.  People think I'm exaggerating when I tell them.  

akak's picture

I am from Detroit originally, and in fact was just back there last month, and there are NO WORDS that can describe the depth of the destruction, ruin, decay, and general physical and spiritual rot that that city has seen in the last 50 years.  It is simply beyond explanation or exaggeration.  Only by seeing it with one's own eyes can one even begin to appreciate it ---- but without knowing just what a prosperous and vibrant economic and industrial powerhouse it was for many years, less than one lifetime ago, one can only superficially appreciate the magnitude of the ruin of Detroit, even by seeing it in its decadence today.

Totentänzerlied's picture

Your plane was diverted, you were in Manhattan the whole time!

TruthInSunshine's picture

I went to Detroit on a freebie trip a few short years ago that an acquaintance couldn't use (who am I to decline an excuse to skip working and fly in a fully stocked bar Learjet) to see the Tigers & Yankees face off in the playoffs (I cheered for the Tigers only because I hate nearly everything about New York) & Comerica Park (I think that's the name of it) is fairly new and actually one of the nicest major league stadiums that I've been to (and I've been to quite a few).

There's also a new, very modern football stadium immediately adjacent to the baseball stadium where the hapless Lions play, but I didn't see the inside (obviously).

As to the rest of the city, I didn't see much of it since I was only there for a night and 1/2 a day, and there are so few even decent hotels in the actual city I ended up staying in one by the airport, but from what I did see, the downtown area is WAY smaller than what I had anticipated, being MAYBE 1/10th as large as Chicago and MAYBE 1/4 the size of Toronto in terms of actual proper skycrapers or pedestrians, and I did notice several extremely large industrial type buildings of WWII (maybe even WWI) age that literally looked like they had been carpet bombed while driving along I-75 and I-94 on my way to the airport.

I'm not sure if the former criminal mayor had yet been indicted or convicted of 2,085 counts of federal crimes as of that time, yet.

MisterMousePotato's picture

Thirty years from now, akak will instead write:

I am from America originally, and in fact was just back there last month, and there are NO WORDS that can describe the depth of the destruction, ruin, decay, and general physical and spiritual rot that that country has seen in the last 50 years.  It is simply beyond explanation or exaggeration.  Only by seeing it with one's own eyes can one even begin to appreciate it ---- but without knowing just what a prosperous and vibrant economic and industrial powerhouse it was for many years, less than one lifetime ago, one can only superficially appreciate the magnitude of the ruin of America, even by seeing it in its decadence today.

sunnyside's picture

The elephant in the room does not like to be talked about.

Widowmaker's picture

Oh there are words;

"Record bonuses" fits like a glove in skank bank, NYC.

squid virtuous's picture

might as well get some zzz's - the PPT is on the case, will have us back to -10.0 by the open, and then you can still BTFD...

dolph9's picture

I sleep very soundly every night.  My metal is underwater, my scuba gear is ready and my soul is at peace.

Smegley Wanxalot's picture

Yeah but they say Wall Street leads by about 9 months so by Christmas time Detroit should be a vibrant beautiful city again, right?

TruthInSunshine's picture

It's larger than Wall Street-Financial-Banking Parasite Complex vs Detroit; it's Wall Street-Financial-Banking Parasite Complex -vs- the United States.

And it's a hell of a lot larger parasitic drain than a half a billion dollars.

The Wall Street-Financial-Banking Parasite Complex has a parastic IV and is suckling on trillions upon trillions of what Chuck Schumer gibly refers to as "flyover country's" money.

otto skorzeny's picture

you have to differentiate the "citizens of the US" instead of the "govt of the US"