Jefferson County Alabama declared bankruptcy last year. Wall Street was left holding $3.14 billion of country bonds to finance the sewer system. And now Wall St is whining (and suing) because the bankrupt county wants to stop paying the bondholders.
Why do Wall St banks think they are entitled to payment when others go unpaid? What makes bondholders more important than anyone else? Why should not bondholders take a haircut after lending ridiculous amounts of money to a borrower that clearly cannot repay it. The bond sales amount to about $5000 for each resident, man, woman and child, in the county. No way they are ever going to pay that off. Should not the banks take a haircut for stupid lending?