Hi Joe
Looks as though Detroit is taking down some of Europes banks in the recent Bankruptcy filing. European banks invested over 1 billion dollars in municipal bonds offered by Detroit. As if Europe isn't already in a precarious position - now they are even more exposed than ever before.
All told, European banks bought a total of about $1 billion of the Detroit bonds, according to industry officials familiar with the transactions.
"I think you're going to see more of these Detroit-type situations" involving banks that aggressively pushed into lucrative but ultimately risky deals, said William Mahnic, an associate professor of banking and finance at Case Western Reserve University's Weatherhead School of Management.
http://online.wsj.com/article/SB10001424127887324328904578619993814520624.html
More on Detroit's Bankruptcy - European Disruption
http://online.wsj.com/article/SB10001424127887323993804578615743557178704.html
DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
I blame whatever banker thought it was a good idea to own Detroit bonds. Simply put, that's a risky asset.
ReplyDeleteI don't here anything about how the fed has been bailing out the European banks for some time now. Just another little goverment secret.
ReplyDeleteWho on earth convinced them to invest in Detroit to begin with? Is there a voice of reason anywhere,anymore? Our average citizens knew better than that,given a huge pension liability racked up by Detroit among other things.
ReplyDeleteWhat an absolute economic disaster.
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