the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Aug 4, 2014
A number of hedge funds recently snatched up more than 750 million dollars of Detroit’s bond debt from European banks.
The hedge funds paid the banks 50 to 60 cents on the dollar for the value of the bonds. That’s up from just a year ago, when some of the same debt was selling for only 30 cents on the dollar.
Their willingness to pay that much proves it’s a lie when the city says the big financial creditors will take a big hit. Clearly, these hedge funds plan to make a profit. Besides, the big financial interests already received huge sums of money over several decades in interest and fees for the sale of the bonds.
The hedge funds are relatively small players on the scene. The biggest of the remaining creditors are the bond insurers, and they already made more than they are owed on the insurance they sold to cover possible bond losses. They’re insurance companies, that’s how they make profits!
All of these vultures still plan to use every opportunity to squeeze every penny they can out of the city’s “bankruptcy.” These hedge funds saw their chance to get in and out quickly and make a few bucks off “distressed” investors needing to get out of the game now.
Detroit may be “bankrupt,” but clearly these vultures still see some scraps worth swooping in for.