Originally published at: https://boingboing.net/2017/11/29/compare-and-contrast.html
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8 Likes
Maybe they should try seceding; I’m sure that would bring military personnel there, construction equipment in hand, in a hurry.
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I’m glad they addressed the debt holders like that. Buying debt is a speculative investment and as with all such investments risk is a factor. Sometimes you lose. Sometimes nature walks up and slaps all of your plans to bits. These people want private gain and public risk and well… no. Fuck that.
6 Likes
That’s just insane. Everyone who invests in those instruments at that stage of distress is expecting to take a big-ass haircut. They know that and expect it. But everyone who buys public debt also knows, explicitly or implicitly through pricing, that there’s a market for distressed debt that caps the liquidation value of an investment in bonds. Here, Warren seems to be saying, “fuck these people, I don’t like them, they get nothing” instead of “yeah, we expect a pretty aggressive haircut” – now, if it’s posturing, hurrah(?), but if it’s to be policy that the last guy willing to buy distressed debt gets nothing based on the fact that they’re the last guy willing to buy it, the price of public borrowing goes up by 5 or 10% (ETA - 5-10% * risk of default) or what-have-you for the lost downside cover of regular investors selling to guys willing to negotiate into a politically charged bankruptcy and restructuring.
Call them vultures all you want, but they serve an enormous service to keeping the price of municipal borrowing down.
Sanders / Warren / Statehood 2020
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Of course. However, there is risk and sometimes that means you loose. Sometimes a big hurricane comes along and flattens whole islands as well as the ability to recover under the yoke of debt. Knowing that, to expect debt service be paid by a rebuilding and relief fund is a bit offensive.
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Can the government expropriate the debt from the “investors”?
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*Socialize the risk, and privatize the gain" is more or less the capitalist credo in early-, mid-, or late-stages of the cultural disease called capitalism.
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