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This is sort for the city of Detroit as we get back to our top story and that's at least eighteen billion dollar debt hole.
We're joined by once again by Jeff Flock who has a special guest with a hey -- that carried out.
OK okay I got the governor here outside and he has really -- even got -- your picture and you'll hear him on the did not tentatively.
-- -- -- -- -- -- You've been remarkably accessible we've certainly everyone there.
I got -- that impact on the municipal bond market doing this.
Classifying this -- a lot of this debt is unsecured.
That means a lot of these people are gonna take a major haircut.
I wanna put -- a -- from -- the securities industry group which said.
This could have potentially significant negative impact on -- municipal securities market.
Other cities in your state may not be able Obama do you see that as a problem.
For a couple things first of all what happens in the trade is -- this is really crisis eighteen billion dollars in debt and relationship to two billion dollars in revenue.
So it shouldn't generalize to other communities if it's done that thoughtful way the other part of this though is about solving this problem.
This is a huge issue.
These are sophisticated investors if you look at it.
Detroit's back to our path for sixty years you're saying they -- what they were getting into well again dollar after sixty years.
And as a practical matter this is something that to me now at some point things need to get resolved in Detroit.
I'm proud to say we're not kicking the can down the road anymore it's time to step up and understand -- Detroit's problem.
And did you in the context to say let's do it a fair fashion in terms of using bankruptcy -- an effective tool I don't wanna be here.
But now that we're here let's do it right in terms of inferior creditors and more importantly getting better services to citizens and growing Detroit.
Speaking of fairness this question of fundamental fairness people that live in Detroit and elsewhere look at.
The major banks in the country.
Who got in trouble and got some help.
The only US auto industry that got in trouble and got some help I know some of those cases you weren't -- big fan but.
They look at that and I wonder about the fundamental fairness of Detroit being troubled.
And not getting that kind of help you don't have somebody in waiting the federal government in waiting to help you out of bankruptcy.
On I don't think they have the appropriate you know for the state or federal government -- bailed us out what I think is appropriate for the state federal government is to be a strategic partner in this process and we are.
In terms of saying how can give better service -- the citizens don't make a long term reference and a growing Detroit.
And we've been doing that in terms of blight removal in terms of public safety in terms of transportation multiple areas that I think you're really gonna pay off.
You beat them to court.
Essentially they were about to go -- and get an injunction would have blocked you.
From filing for bankruptcy.
Perhaps be said for example.
Detroit municipal workers' freedom to retire with dignity.
Dignity is now -- I don't think -- treated fairly what how much jeopardy -- pensions can.
If I'm -- guy who's retired.
How much trouble -- Yeah we've been trying to work with people in good faith in terms of going through this process Kevin -- done hundreds of meetings plus in terms of doing that and response was to run the court.
That's part of the benefits of bankruptcy again is you have won a forum to address all these issues instead of getting caught all -- -- the retirees are very.
I empathize with them.
There are hard working people -- fixed income and one thing that mention too long has this integrate the plans are funded there's funding to pay their pensions just issue is the unfunded liabilities piece of that -- -- billion dollars a significant numbers.
As a fact of -- that.
Hopefully we'll develop one good thing and bankruptcy that was missing now is they didn't have representation for retirees themselves.
So one of the first request that the city me proactively to the court is to ask for.
As creditors from the retirees to make sure there at the table they can have their day they can talk.
About -- you know that may not help you in terms of getting this resolved real quick.
When we hear pennies on the dollar like ten cents on the dollar somebody with a -- looks at that says.
Oh my god.
If I was gonna you know get a pension of -- thousand dollars a year now I'm getting what you know 10% of that is that we Lou it's gonna come down.
Now because again there's -- -- east -- got to find it the other part that's important remember is these pension plans haven't been managed well.
There you can tell you probably don't stories on these pension plans in terms of mismanagement bad investments all these things.
And unfortunately there's a price we paid for that and hopefully we can sort through that have an open dialogue again coming back to the point that.
Many hardworking people that rely on -- and now.
So how can -- do this and I thought -- to be fair to.
As many people as possible on the situation.
But let's move Detroit forward let's have a growing stronger Detroit has so many great things are going at Detroit this is the last obstacle to make it to -- really take off.
No great answers to this but governor appreciate your your efforts to assure everyone -- appreciate you not kicking the can down the road any farther and governor -- time valuable.
We returned him to what LCS to do its big job yet as certainly as an ism that player and the -- story today so thanks to Jeff Flock and to the governor.
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