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Detroit is bankrupt. $US20 billion in debt. Reduction of manufacturing input to GDP.; Bankrupt Detroit Receives Less U.S. Aid Than Colombia
Topic Started: 19 Jul 2013, 01:02 PM (6,847 Views)
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Abandoned Dogs Roam Detroit in Packs as Humans Dwindle

By Chris Christoff - Aug 21, 2013 2:01 PM ET

Detroit Dominated by Pitbulls as 50K Dogs Roam Free

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As many as 50,000 stray dogs roam the streets and vacant homes of bankrupt Detroit, replacing residents, menacing humans who remain and overwhelming the city’s ability to find them homes or peaceful deaths.

Dens of as many as 20 canines have been found in boarded-up homes in the community of about 700,000 that once pulsed with 1.8 million people. One officer in the Police Department's skeleton animal-control unit recalled a pack splashing away in a basement that flooded when thieves ripped out water pipes.

“The dogs were having a pool party,” said Lapez Moore, 30. “We went in and fished them out.”

Poverty roils the Motor City and many dogs have been left to fend for themselves, abandoned by owners who are financially stressed or unaware of proper care. Strays have killed pets, bitten mail carriers and clogged the animal shelter, where more than 70 percent are euthanized.

“With these large open expanses with vacant homes, it’s as if you designed a situation that causes dog problems,” said Harry Ward, head of animal control.

Symbiotic Suffering

The number of strays signals a humanitarian crisis, said Amanda Arrington of the Humane Society of the United States, based in Washington. She heads a program that donated $50,000 each to organizations in Detroit and nine other U.S cities to get pets vaccinated, fed, spayed and neutered.

Arrington said when she visited Detroit in October, “It was almost post-apocalyptic, where there are no businesses, nothing except people in houses and dogs running around.”

“The suffering of animals goes hand in hand with the suffering of people.”

She said pet owners who move leave behind dogs, hoping neighbors will care for them. Those dogs take to the streets and reproduce. Compounding that are the estimated 70,000 vacant buildings that provide shelter for dogs, or where some are chained without care to ward off thieves, Ward said.

Most strays are pets that roam, often in packs that form around a female in heat, Ward said. Few are true feral dogs that have had no human contact.

Ward said Detroit’s three shelters -- his and two non-profit facilities -- take in 15,000 animals a year, including strays and pets that are seized or given up by owners.

Fearing Humans

They are among the victims of a historic financial and political collapse. Detroit, a former auto manufacturing powerhouse, declared the largest U.S. municipal bankruptcy on July 18 after years of decline. The city has more than $18 billion in long-term debt and had piled up an operating deficit of close to $400 million. Falling revenue forced cutbacks in police, fire-fighting -- and dog control.

With an annual budget of $1.6 million, Ward has four officers to cover the 139-square-mile (360-square-kilometer) city seven days a week, 11 fewer than when he took command in 2008. He has one dog-bite investigator, down from three.

“We are really suffering from fatigue, short staffed” and work too much overtime, he said in an interview.

The officers, who wear bulletproof vests to protect themselves from irate owners, are bringing in about half the number of animals that crews did in 2008, Ward said.

In July, the pound stopped accepting more animals for a month because the city hadn’t paid a service that hauls away euthanized animals for cremation at a cost of about $20,000 a year. The freezers were packed with carcasses, and pens were full of live animals until the bill was paid.

Famous Fighter

Pit bulls and breeds mixed with them dominate Detroit’s stray population because of widespread dog fighting, said Ward. Males are aggressive in mating, so they proliferate, he added.

One type of fighting pit bull has become known as far as Los Angeles as the “Highland Park red,” named after a city within Detroit’s borders, Ward said.

Their prevalence was clear as Ward and officers Moore and Malachi Jackson answered calls Aug. 19. On a block where vacant houses and lots outnumbered occupied ones, they found four dogs in an abandoned house -- a male and three females, including a pregnant pit bull with a prized blue-gray coat.

Ward said it appeared the dogs were fed by someone who used the house to hide stolen items.

Walking Small

Aggressive dogs force the U.S. Postal Service to temporarily halt mail delivery in some neighborhoods, said Ed Moore, a Detroit-area spokesman. He said there were 25 reports of mail carriers bitten by dogs in Detroit from October through July. Though most are by pets at homes, strays have also attacked, Moore said.

“It’s been a persistent problem,” he said.

Mail carrier Catherine Guzik told of using pepper spray on swarms of tiny, ferocious dogs in a southwest Detroit neighborhood.

“It’s like Chihuahuaville,” Guzik said as she walked her route.

At two nearby homes, one pet dog was killed recently and another injured by two stray pit bulls that jumped fences into yards, said neighbor Debora Mattie, 49.

Last year, there were 903 dog bites in Detroit, according to Ward, adding that most go unreported to police. He said 90 percent are by dogs whose owners are known.

After Attack

Many de facto strays are called pets by owners who let them wander, said Kristen Huston, who leads the Detroit office of All About Animals Rescue, a non-profit that obtained the Humane Society’s $50,000 grant last year to feed, vaccinate and sterilize pets. Some dogs run away from their neighborhoods and threaten people, she said.

“Technically, it’s illegal to let a dog roam, but with the city being bankrupt, who’s going to do anything about it?” Huston said.

Huston said she walks through some of the poorest neighborhoods to talk to pet owners about how to care for their animals, sometimes giving them bags of food or even a free doghouse.

Ward said more needs to be done to educate pet owners. He said his crews are too few, but help keep dogs in check.

Four months ago, a woman sitting on her porch on the east side was attacked by two strays that tore off her scalp, Ward said.

“We got those dogs,” he said. “It’s a big difference to that lady that those dogs were gone that day.”

Read more: http://www.bloomberg.com/news/2013-08-21/abandoned-dogs-roam-detroit-in-packs-as-humans-dwindle.html
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Mail carrier Catherine Guzik told of using pepper spray on swarms of tiny, ferocious dogs in a southwest Detroit neighborhood.

“It’s like Chihuahuaville,” Guzik said as she walked her route.


A real life horror movie for postal workers.
Only a rat can win a rat race.

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Fighting over Detroit's carcass

Mathew Murphy

Driving around some parts of Detroit can feel almost apocalyptic. Once home of Motown, the big three US car manufacturers and almost 1.8 million people, many communities now lay abandoned, homes burnt out and only 700,000 people remain.

In July, Detroit became the largest US city to file for bankruptcy. It owes $US18.2 billion in long-term debt, or $27,000 for each resident. About $US9.2 billion of the shortfall is in unfunded pension liabilities.

Last week Judge Steven Rhodes heard from Detroit residents about why the city should not be allowed to go bankrupt. They are fearful that he may decide that federal bankruptcy law trumps their pension entitlements.

Detroit is not alone in facing the question of what to do about generous promises that were made in the past by people who would never be around to deliver them.

The Centre for Retirement Research at Boston College says states pensions are 27 per cent underfunded.

Moody’s believes the CRR’s estimated shortfall of $US1 trillion is about $US1.7 trillion too conservative and that states are actually underfunded by about 52 per cent.

The credit ratings agency says Illinois is the most underfunded of the states and estimates that it owes $US133 billion, or 241 per cent of its revenue. Connecticut is in the second most precarious position with liabilities totaling 190 per cent of revenue, then Kentucky (141 per cent), New Jersey (137 per cent) and Hawaii on (133 per cent). Nebraska is the closest of all the states to meeting its commitments.

Detroit owes billions to pensioners but it also owes billions to bondholders, the investors who helped pay for roads and other infrastructure spending.

Municipal bonds are issued when an investor agrees to lend to the government in return for a regular interest payment and a promise that the money is returned in full after an agreed period of time. They are considered a super-safe investment and unlike corporate bonds or savings accounts, the income from municipal bonds is not taxed, making them attractive, usually to the uber-rich. But because they are normally such a safe investment they don’t offer a great return. The average yield on a general-obligation municipal bond over 10 years is about 2.71 per cent, while with a 30-year municipal bond it is about 4.22 per cent.

In its bankruptcy filing, Detroit proposed to not only cut its pension benefits but to repay bondholders just a small percentage of what they are owed.

Pensioners argue that Michigan's state constitution protects their pensions, while investors that hold general-obligation municipal bonds point to laws that require local governments to pay them first, even if that means closing schools and sacking police.

The concern is that if Detroit is allowed to shirk its obligations and not pay bondholders what they are owed then what will happen to a market that relies on that pledge in order to trade.

Meredith Whitney, who made a name for herself by correctly predicting that Citigroup was in trouble before the financial crisis, believes Detroit's bankruptcy is just the precipice of a wave of municipal defaults.

“The aftershocks of the largest municipal bankruptcy in US history will be staggering, and Detroit will set important precedents,” she wrote in July in a Financial Times opinion piece. “Leaders across the country cannot continue as they have. They must choose sides because there is simply not enough money to go around. Will they side with taxpayers, unions or the municipal bondholders?

“[Detroit] bondholders, who up until last week thought they would be protected in almost any scenario, are being forced to make a contribution to the fiscal problem. Elected officials, for the first time in a very long time, are siding with residents,” she wrote.

Whitney’s haters argue that she has cried wolf before on the municipal bond market.

In September 2010 her research firm released a 600-page report warning about a spate of municipal defaults. She then appeared on US 60 Minutes and told investors to expect “50 to 100 sizeable defaults … worth hundreds of billions of dollars.”

Following her comments, the municipal bond market lost about a year’s worth of returns in the space of two months and helped propel 29 straight weeks of investor withdrawals from municipal mutual funds.

This time around the $US3.7 trillion municipal bond market doesn’t appear rattled either by Detroit’s situation or Whitney’s prediction of a knock-on effect.

That is largely because mutual funds have just 0.003 per cent tied-up in Detroit. There are a number of state laws that prevent municipalities filing for bankrupt protection.

Also, since 2007 only 26 municipal borrowers have defaulted on their debts according to Moody's, far fewer than Whitney predicted.

Interest rates on some bonds have crept up but most see Detroit as an isolated incident.

Michigan municipalities are selling the most bonds since July; Bloomberg data shows $US88 million in debt being offered this week.

Traders expect Detroit bonds to continue to rebound much like the Californian market did after Stockton, San Bernardino and Mammoth Lakes defaulted and sought court protection. Borrowing costs for those areas reached a six-month high after the filings, and have since fallen to the lowest since 2008.

While the municipal bond market seems to have shrugged off Detroit’s woes, it will be Judge Rhodes’s decision next month on Detroit’s eligibility for bankruptcy that will determine if pensioners and bondholders will be shortchanged.

Read more: http://www.businessspectator.com.au/article/2013/9/27/us-economy/fighting-over-detroits-carcass
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