@Reuters:

"Detroit pension cuts 'function of mathematics' -investment banker"

It's hard to describe how farcical and unfair is the current round of hearings about the state of Detroit's finances in bankruptcy court.

On Friday, city financial consultant Kenneth Buckfire said he did not have to recommend to Orr that pensions for the city's retirees be cut as a way to help Detroit navigate through debts and liabilities that total $18.5 billion.

Buckfire said it was clear that the city did not have the funds to pay the unsecured pension payouts without cutting them. "It was a function of the mathematics," said Buckfire, who said he did not think it was necessary for him or anyone else to recommend pension cuts to Orr.

"Are you saying it was so self-evident that no one had to say it?" asked Claude Montgomery, attorney for a committee of retirees that was created by Rhodes.

"Yes," Buckfire answered.

Buckfire, a Detroit native and investment banker with restructuring experience, later told the court the city plans to pay unsecured creditors, including the city's pensioners, 16 cents on the dollar. There are about 23,500 city retirees.

How convenient! Investment banker Buckfire says that pensions for city workers are unaffordable; that must be true!

According to Orr & Co. it is okay for banks and others to steal workers' pensions because the enabling thief is a Detroit native. Actually ... that makes a certain amount of sense!

Bankruptcy court judge declares Buckfire is an 'expert' because ... he has a nice suit.

UAW attorney Peter DeChiara and Montgomery, the retirees committee lawyer, made arguments on Friday morning to Rhodes that Buckfire's testimony should not be allowed because he was not deemed an expert witness by the court.

[[Judge) Rhodes ruled that Buckfire's testimony would be allowed, in part because he had become an expert after in-depth study of the city's financial status.
In-depth study = he read a ten page 'report' written by an intern.

Buckfire does not offer any evidence in the form of the actual in-depth study, that is, a detailed actuarial analysis. He simply utters the magic word 'mathematics' declaring that removing retirees' pensions is self- evident ... the Judge makes approving noises!

That Buckfire might have an interest in the outcome due to his business is never examined. Also left in the gutter is what strategic outcome is intended: how exactly does reducing pensions positively effect Detroit's finance structure: IE, how many new fire trucks?

An actuarial analysis would indicate how much Detroit would have to pay year-by-year ... and how much additional if any the city would have to make up to meet any shortfall. Buckfire implies that Detroit's pension obligations have to be met at once.

The court is behaving irresponsibly. As in Spain, Greece, Portugal and Ireland, the pensions look to be fair game for secured creditors -- the banks -- who will be paid with retirees' funds. The beatdown of the retired city workers has begun.