Quote Originally Posted by night-timer View Post
Is Detroit at its lowest point ever, like really? Everything in the entire world is in a crappy state of flux right now, changing into something else [[hopefully better), but no-one knows what just yet. Doesn't answer your question but, hey, AFAIK no-one else is going anywhere at Xmas, either....
This is interesting...I've never thought about it this way. I haven't been paying attention to the level of services out there. I've just been staring at numbers on a screen.

For reasons that having nothing to do with us specifically, the interest rates to take on debt have been rising because of an increase in perceived risk to loan money to cash-strapped municipalities. And so despite the fact that interest rates have been falling in general, the spread between AAA and BBB debt has been widening as investors are flocking to AAA debt for safety concerns.

The problem is that with the debt load we're carrying as well as our legacy costs, this is not a real favorable time to be borrowing money. Not sure on how Detroit will be seen by lenders, but BB rated debt in general is double the interest rate of AAA rated debt.

I think this might be like a GM situation in 2008, where debt was at BB, people thought it was gonna be tough times, but then the cost of borrowing doubled at the same time that revenues got cut in half because it was impossible to get financing on a car.

Within 6 months, the whole thing imploded, and there was just no way out from there.