Welp, maybe I stand corrected. Maybe you can get away with declaring bankruptcy as a city relatively scot-free. Still, it'd be interesting to see how much money the banks lent vs. how much money the banks made in interest payments, derivatives, and etc. Maybe the banks still made a killing, or maybe there is inside pressure from the government to forgive bad debts issued during the last crazy years before the federal bailout.

Either way, I feel we're not getting the whole story, though I understand why. Untangling all of these complex financial mechanisms is very difficult.