If I may add a couple of points to this discussion:

1. Libor rigging and the swaps deals have absolutely, positively nothing to do with each other. Libor rigging, as alleged, suggested that traders would get the survey-responders [[Libor is, after all, a survey, and not a government benchmark) to adjust answers to the survey by a few basis points to make money on trades. A basis point is one-one hundredth of one percent--0.01%. The amount the swaps were underwater [[that is, paying a fixed rate higher than the comparable floating rate) to the tune of 5-6%, or 500-600 basis points. The two things have [[virtually) nothing to do with each other.

2. With all due respect to Jerome Goldberg, the city stood a relatively low chance of winning the argument that the swaps would be invalidated. In addition, there is the cost and time of litigation that would follow. Judge Rhodes threw the creditors a HUGE bone by beating on the counterparties [[other side of the swap) the first two times. There is a BIG difference between making a political statement that banks were responsible for the housing crisis [[and that's related to the swaps how, exactly?) and actually proving it in court. If anyone wanted to go there [[and few will, except if they're running for office), the other side might point out that a) in each case of a home loan, there was a borrower taking the money, just like the City was happy to take the loan proceeds from the CoPs, and b) Detroit was ground zero for mortgage fraud, with tens of thousands of fraudulent applications and appraisals and debts that have never been repaid. Judge not, lest ye be judged yourself.

3. I'm pretty sure that I wrote that what might happened has happened: namely, that the pensioners are once again receiving poor advice. They have hired representatives who are experienced with unions and union negotiations, not bankruptcy counsel. Normally, in a union negotiation, a futile negotiation leads to two results for a union: a) you're stuck with the same terms that you had in your previous contract, and b) you can go on strike to force the other side to move. Most times, that's not so bad. In bankruptcy cases, THIS IS NOT WHAT HAPPENS. [[sorry for the screaming) Ask the folks at Hostess. Or countless steel or airline employees. I don't know if the unions don't trust anyone else, or if they don't know any better. But simply holding out for a better deal could leave them as the last holdout, and that person will be given the deal to which the rest of the parties have agreed.