Nolan Finley thinks Detroit hasn't sufficiently paid for the sins of filing bankrupt.

[iheartthed]

But he expresses sympathy for the pain bore by the banks as a result of Detroit's bankruptcy. He also suggests that the city should have been liquidated:

And as the Chapter 9 filing played out, it was held mostly harmless from its own mismanagement, incompetence and corruption.

That may not have been the best outcome.

Instead of Detroit facing its mistakes, those who loaned it money over the years, for reasons good and questionable, paid the price for 60 years of denial and neglect.

Roughly $7 billion in debt was erased. Very few of Detroit's creditors walked away whole; most took haircuts ranging from 14 cents to 86 cents on the dollar.

Nobody weeps for banks and bond houses. Indeed, the protest signs bore the message, "Make the Banks Pay!"

Money lenders have never been popular — until someone needs a loan.

In Detroit, creditors, as they typically are, were vilified as greedy corporate exploiters who wanted to rob the city of its jewels and steal food from the pantries of its retirees.

But what did these financial institutions actually do? They loaned money to the city when it asked for it, and then expected to be paid back.

http://www.detroitnews.com/story/opinion/columnists/nolan-finley/2014/11/09/finley-banks-paid-detroit-bankruptcy/18667677/

[mwilbert]

But he expresses sympathy for the pain bore by the banks as a result of Detroit's bankruptcy. He also suggests that the city should have been liquidated:

This column is a reminder as to why Finley is not to be taken seriously.

Detroit is not a business. You can liquidate a business [[not that bankrupt businesses are always liquidated) and transfer the assets to other entities. If there were other entities that wanted to assume responsibility for Detroit, that might be an option, but so far as I know there are no such entities, so there is no resolution that is analogous to a business liquidation. The Michigan constitution also doesn't have any provision for such a thing.

People who were lending money to Detroit anytime in the past 30 years should have known that Detroit wasn't a great credit risk. They should have [[and did) charged Detroit higher interest rates as a consequence of that risk. That's what lenders do, and that's how lending works. Sometime a loan goes bad, and that is part of the business.

[Hypestyles]

The banks should be made to pay for blight removal throughout the city.

[EastsideAl]

What an asshole. If he doesn't think we're being punished enough he should come and live here and see for himself [[of course, having that asshole living here would be even more punishment for us).

[Scottathew]

What an asshole. If he doesn't think we're being punished enough he should come and live here and see for himself [[of course, having that asshole living here would be even more punishment for us).

That's kind of what I thought when I read it. He acts as if it's sunshine and rainbows in Detroit, just with $7B less debt.

Shame on Detroit leaders, and shame on the banks for lending money to Detroit when it was in such bad financial state.

I wonder how Finley felt when the baking industry collapsed our economy and sent us into a deep recession and had to be bailed out on the backs of the people.

[trstar]

What an asshole. If he doesn't think we're being punished enough he should come and live here and see for himself [[of course, having that asshole living here would be even more punishment for us).

Nolan Finley is what the young kids call a TROLL.

[Hermod]

Banks didn't lose much in the bankruptcy, it was the entities that insured the bonds against default that paid the price. My DWSD bonds were paid at par because of the underlying insurance.

My regret is that Orr didn't use his opportunity to suspend civil service protections and do a number on the over-staffing and under-performing in the various city departments while he had the authority.

[nain rouge]

I think the whole banks off with only X cents on the dollar is disingenuous because it ignores interest payments. A bank might walk off with only "$0.70 on its dollar", but if it had successfully charged Detroit with exorbitant interest rates while the debt was carried, the bank probably made a pretty nice profit on its loans. Banks don't charge sketchy lenders high interest rates for fun. It's part of a legitimate business model, and probably most of the banks made a profit off of Detroit in the end [[or are going to).

[nain rouge]

If anything, what Nolan wrote is like a reverse psychology fluff piece. The main "takeaway" is that Detroit really screwed those poor banksters over. We should be happy.

[bailey]

If anything, what Nolan wrote is like a reverse psychology fluff piece. The main "takeaway" is that Detroit really screwed those poor banksters over. We should be happy.

Well, in the short term sure. But next time Detroit needs to borrow to fund something, will there be any capital available at anything approaching reasonable terms? Something lost in the hackishness of the article is the very real problem of very little structurally changing.

[motz]

I wonder what Nolan Finley thinks of Donald Trump and his perpetually bankrupt self. I strongly doubt he'd criticize Trump in the same manner that he'd criticize Detroit, and Trump is someone who absolutely without a doubt abuses the system

On top of that, no one weeps for those who invest their money poorly. At least, no one should. Because if you make a poor investment and are given the chance to do the properly research, there is no excuse besides "I made a bad decision". Finley and others are the types who don't think that markets that take risks or behave poorly/illegally [[see mortgage fraud and the financial crisis) should have to face the consequences for their actions. Syncora and FGIC willingly backed the deal, and if they didn't know what they were getting into, that's their fault. It doesn't matter what documents they were given, if they were lied to... All they had to do was visit Detroit. Nothing more.

[sumas]

Nolan Finley is an ass. No more, no less. Less is what I would like to see/read

[bailey]

I wonder what Nolan Finley thinks of Donald Trump and his perpetually bankrupt self. I strongly doubt he'd criticize Trump in the same manner that he'd criticize Detroit, and Trump is someone who absolutely without a doubt abuses the system

On top of that, no one weeps for those who invest their money poorly. At least, no one should. Because if you make a poor investment and are given the chance to do the properly research, there is no excuse besides "I made a bad decision". Finley and others are the types who don't think that markets that take risks or behave poorly/illegally [[see mortgage fraud and the financial crisis) should have to face the consequences for their actions. Syncora and FGIC willingly backed the deal, and if they didn't know what they were getting into, that's their fault. It doesn't matter what documents they were given, if they were lied to... All they had to do was visit Detroit. Nothing more.

So, basically, it's OK for Detroit leaders to scam the banks and Detroit should not in anyway be held responsible for that scamming.... but banks should bear the full brunt of the mortgage meltdown?
being a tad inconsistent aren't you?

[Wesley Mouch]

I haven't read the article yet -- I will do so.

But my reaction to the posts here is that the headline fits. Posters are blaming banks. They are not blaming themselves. QED.

[nain rouge]

So, basically, it's OK for Detroit leaders to scam the banks and Detroit should not in anyway be held responsible for that scamming.... but banks should bear the full brunt of the mortgage meltdown?
being a tad inconsistent aren't you?

I think the banks had a more nuanced view of what could be gained from loaning to a city in terminal financial decline. Look at this way: if you collect $20 million in interest and later receive $20 million back on your original $30 million loan in bankruptcy court, you made a tidy profit. I'm sure such scenarios weren't lost on the banks. They knew Detroit was more likely than not to make minimum payments for as long as possible - rather than pay down its debt - and structured deals accordingly.

Probably some banks took more obscene risks, but those lenders knew what they were getting into and were willing to gamble.

[nain rouge]

Let's also not forget the de facto "collateral" some of the banks collected during the bankruptcy proceedings, such as the parking garage deal. But let's hear some more propaganda about how the banks were screwed. That way we won't even dare think the borrower was screwed.

[bailey]

Let's also not forget the de facto "collateral" some of the banks collected during the bankruptcy proceedings, such as the parking garage deal. But let's hear some more propaganda about how the banks were screwed. That way we won't even dare think the borrower was screwed.

I think there are far too many people focused on extracting punishment from the Banks rather than the important issues of still having a city that is half empty, blighted, with an extremely poor populace, and massive problems that aren't solved because the banks took a haircut.

Banks were the convenient boogeyman. Now that they have been dealt with, the hard work begins. I think that is the point buried in Nolan's article.

[iheartthed]

I think there are far too many people focused on extracting punishment from the Banks rather than the important issues of still having a city that is half empty, blighted, with an extremely poor populace, and massive problems that aren't solved because the banks took a haircut.

Banks were the convenient boogeyman. Now that they have been dealt with, the hard work begins. I think that is the point buried in Nolan's article.

If that's what he meant then he should have said that, no? I think most in and around Detroit would agree that there is much work to be done. I don't think most in and around Detroit would agree that Detroit hasn't suffered far more than any bank under the factors that led it into bankruptcy, which is what Finley seems to suggest.

[bailey]

If that's what he meant then he should have said that, no? I think most in and around Detroit would agree that there is much work to be done. I don't think most in and around Detroit would agree that Detroit hasn't suffered far more than any bank under the factors that led it into bankruptcy, which is what Finley seems to suggest.

I'm not sure if the suffering leading up to Bankruptcy is the issue. The point is the banks [[rightly, IMHO) took a substantial haircut but, the citizens of Detroit aren't going to see anything but BETTER services and maybe even lower taxes for those services [[hopefully). I think there is a the legit point here... if the total burden falls on the lenders and non-resident retirees, where is the impetus for Detroit politicians to make the hard changes so that Detroit doesn't end up right back where it was?

[hewettbr]

But he expresses sympathy for the pain bore by the banks as a result of Detroit's bankruptcy. He also suggests that the city should have been liquidated:

i think you are all misinterpreting this piece. Hes just stating facts and how this would have gone differently if the city were a business. The end result is we should all be grateful things turned out the way they did.

Don't let your personal dislike for the man cloud the real meaning of his story, and he never said the city should have been liquidated. He only suggested that is what the creditors were demanding.

[Packman41]

i think you are all misinterpreting this piece. Hes just stating facts and how this would have gone differently if the city were a business. The end result is we should all be grateful things turned out the way they did.

Don't let your personal dislike for the man cloud the real meaning of his story, and he never said the city should have been liquidated. He only suggested that is what the creditors were demanding.

^^^^THIS^^^^ That was my take also. The process could have been so much worse and with much worse results.

If you have not already done so, then take the time to read the ENTIRE Free Press Special Section http://www.freep.com/longform/news/l...yder/18724267/ After you read it then ask yourself that if the team of "adults in the room" were absent from the process would we have the result we have today?

My guess is that the ideologues would still be bickering and we would not be exiting bankruptcy today.

[EastsideAl]

I'm trying to figure out where there hasn't been "negative reinforcement". No streetlights, parks unmaintained and grown over, streets full of unfilled potholes, a broken water and sewerage system that needed to be partially given away in order to save it, limited snow removal, super slow police, fire, and EMS response, and calls to city agencies that go unanswered. To say nothing of the loss of our democratic rights, or of the people who worked and paid in good faith most of their adult lives who will now see cuts in their pension and health care, with many even having to pay back part of their retirement savings.

It all seems pretty damn negative to me.

With this talk of imposing yet more "negative reinforcement" on the citizenry an already heavily impoverished city, I have to wonder where the "negative reinforcement" is for our state. Lest we forget, a factor in tipping Detroit into bankruptcy was the state reneging on its revenue sharing for decreased taxation deal. Costing us hundreds of millions of dollars. And not letting the tax rate go back to where it was before, depriving us of many millions more.

To compound this, rather than just paying us the damn money they still owed, the state got to worm its way out of screwing us over by sending down the EM to "manage" us immediately into bankruptcy. Meaning that they got to essentially fold their own non-payment into the bankruptcy proceeding and wiggle free. Which is one reason why not everyone here feels like Lansing has our backs in all this. However, this is all just "water under the bridge" now I guess, and should be forgotten in the neat settlement of the bankruptcy.

Which it would be until assholes like Finley [[and apparently some posters here) poke their head up to tell us that we haven't suffered enough, or been "negatively reinforced" enough, to satisfy them. I guess if he was our massa [[rather than Mr. Orr) he'd make sure that ol' whipping post would be getting more use...

[hewettbr]

I'm trying to figure out where there hasn't been "negative reinforcement". No streetlights, parks unmaintained and grown over, streets full of unfilled potholes, a broken water and sewerage system that needed to be partially given away in order to save it, limited snow removal, super slow police, fire, and EMS response, and calls to city agencies that go unanswered. To say nothing of the loss of our democratic rights, or of the people who worked and paid in good faith most of their adult lives who will now see cuts in their pension and health care, with many even having to pay back part of their retirement savings.

It all seems pretty damn negative to me.

With this talk of imposing yet more "negative reinforcement" on the citizenry an already heavily impoverished city, I have to wonder where the "negative reinforcement" is for our state. Lest we forget, a factor in tipping Detroit into bankruptcy was the state reneging on its revenue sharing for decreased taxation deal. Costing us hundreds of millions of dollars. And not letting the tax rate go back to where it was before, depriving us of many millions more.

To compound this, rather than just paying us the damn money they still owed, the state got to worm its way out of screwing us over by sending down the EM to "manage" us immediately into bankruptcy. Meaning that they got to essentially fold their own non-payment into the bankruptcy proceeding and wiggle free. Which is one reason why not everyone here feels like Lansing has our backs in all this. However, this is all just "water under the bridge" now I guess, and should be forgotten in the neat settlement of the bankruptcy.

Which it would be until assholes like Finley [[and apparently some posters here) poke their head up to tell us that we haven't suffered enough, or been "negatively reinforced" enough, to satisfy them. I guess if he was our massa [[rather than Mr. Orr) he'd make sure that ol' whipping post would be getting more use...

Negative reinforcement like pension cuts much more severe than they ended up being. The privatization of more services, the loss of more jobs, the further decline.

Bankruptcy has improved things, hence the no negative reinforcement comment. Can we not agree things could have been much worse? Yes things were bad but they are improving, trash gets picked up, roads are somewhat plowed, police have come when i have called, blight is being removed, streets are lit up...

whether all of that was directly due to the bankruptcy or not doesn't matter. People will associate it as such.

[Wesley Mouch]

I'm trying to figure out where there hasn't been "negative reinforcement". No streetlights, parks unmaintained and grown over, streets full of unfilled potholes, a broken water and sewerage system that needed to be partially given away in order to save it, limited snow removal, super slow police, fire, and EMS response, and calls to city agencies that go unanswered. To say nothing of the loss of our democratic rights...

What democratic rights were lost?

[Jimaz]

What democratic rights were lost?

First, remove your fingers from your ears.