LATEST NEWS: Richard Ravitch: Expect a Tsunami of Municipal Bankruptcies

Rising pension-fund and health-care costs are putting enormous pressure on state and local governments, Richard Ravitch, who is advising Detroit’s bankruptcy judge, tells CNBC. Plus, the federal government, attempting balance its own budget, has cut its funding to cities. Politicians prefer not to raise taxes or cut services, so have repeatedly issued bonds to borrow, kicking the […]

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China’s Rescue of Troubled Trust May Stoke Risk-Taking

China’s eleventh-hour rescue of wealthy investors in a high-yield trust threatens to drive more money into the nation’s $6 trillion shadow-banking industry, undermining regulators’ efforts to deter excessive risk-taking. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, yesterday told customers who had invested in the 3 billion-yuan ($496 million) trust product that they […]

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Worsening Debt Crisis Threatens Puerto Rico

“While Detroit has preoccupied Americans with its record-breaking municipal bankruptcy, another public finance crisis on a potentially greater scale has been developing off most Americans’ radar screens, in Puerto Rico. Puerto Rico has been effectively shut out of the bond market and is now financing its operations with bank credit and other short-term measures that […]

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Detroiters Living Amid Ruins Resist Moving as City Reorganizes

“On both sides of Dorothy Wafer’s Detroit home sit rows of crumbling houses among trash-strewn lots. A body was found in a car down the street last month, and there was an attempted rape, she said. There’s no place like home, though. Wafer, 61, last week planted roses in front of her two-story house, with […]

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Billionaire Issues Chilling Warning About Interest Rate Derivatives

“Will rapidly rising interest rates rip through the U.S. financial system like a giant lawnmower blade?  Yes, the U.S. economy survived much higher interest rates in the past, but at that time there were not hundreds of trillions of dollars worth of interest rate derivatives hanging over our financial system like a Sword of Damocles.  […]

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