Banks including UBS AG (UBS), Bank of America Corp.’s Merrill Lynch and JPMorgan Chase & Co (JPM). have enabled about $3.7 billion of bond issues to cover deficits, pension shortfalls and debt payments since 2005, according to data compiled by Bloomberg. Liabilities rose to almost $15 billion, including money owed retirees, according to a state treasurer’s review.
The debt sales cost Detroit $474 million, including underwriting expenses, bond-insurance premiums and fees for wrong-way bets on swaps, according to data compiled by Bloomberg. That almost equals the city’s 2013 budget for police and fire protection.
The largest part is $350 million owed for derivatives meant to lower borrowing costs on variable-rate debt.
Imported From Detroit
And so the fundamental problem with Chrysler’s ad campaign is not its claim that it and Detroit are on the road to recovery together, or that its recovery is the result of some Heartland work ethic that most Americans have forgotten. These are stories designed to make us feel good, to make us believe that working hard will get you somewhere, and that we just need to work harder for things to get back to the way they used to be. But deep down we know that hard work isn’t the secret ingredient. Americans have never stopped working hard. Average productivity has increased roughly 2 percent every year since 1990, even during the crisis, while manufacturing productivity increased over 3 percent each year during the same period.
No, the big lie perpetuated by Chrysler’s stories is that its recovery is America’s recovery, like Charlie Wilson’s persistently misquoted but nonetheless pervasive remark that “What’s good for General Motors is good for America.” This is simply not true anymore. Corporate America might be recovering, but working people aren’t. For corporate America to recover, the rest of us have to take a pay cut or lose our job, our pension, our health insurance, our home, our time with our family. Recovered profits aren’t trickling down to create decent jobs or pay workers back for concessions.
Inside|Out, now in its second year, brings 80 reproductions of masterpieces from the DIA’s collection to the streets and parks of greater metro Detroit, pleasantly surprising and delighting residents of the participating communities. Where possible, the works will be clustered within walking or biking distance of each other in a grand, open-air gallery.
Due to limited storage space and evolving collecting philosophy, the museum staff has decided to “deaccession,” or remove from its collection, all but one of Smol’s works. Visitors will be able to vote on which one they would like the museum to keep, and curatorial staff will take those votes into consideration.
Proceeds, if the works is sold, must be used for acquisitions, to prevent monetizing the collection. Violation of appropriate deaccessioning procedure can lead to sanctions by such professional organizations as the Association of Art Museum Directors...
... the mere mention of art sales for operating money turns some purists purple with apoplexy, and could restart the uproar that occurred last year when Brandeis University bruited but backtracked from the idea of selling works from its Rose Art Museum, eventually prompting Jehuda Reinharz, the university president, to step down. Just before that, the National Academy Museum sold two Hudson River School paintings to pay its bills, eliciting tough sanctions from the normally hands-off Association of Art Museum Directors....
Many people don’t understand the problem. If the choice is between allowing a museum to fail (or make crippling cutbacks) and selling some art, what’s the big deal? Sell art!
The big deal is this: the strict constructionists believe that once selling art to cover operating costs is allowed, it will become the first resort in bad times, not the last.
In doing so the museum stepped into the quicksand of murky rules, guidelines and ethical strictures meant to discourage museums everywhere from selling collections to pay bills. It is one of the hottest issues in the museum world today. With budgets shrinking in a bad economy, the pressure to generate revenue is growing along with fears that museums are squandering public trusts meant to preserve the artifacts of the past for future generations.
But Kenneth Buckfire, a New York investment banker hired by the City of Detroit in January and who is advising Orr on potential tactics, said the cultural and emotional value of the DIA’s treasures must be weighed against the needs of 700,000 largely poor residents of Detroit who desperately need safe streets and a capable city government not drowning in debt.
Thomas Campbell, director of the Metropolitan Museum of Art in New York, one the largest and most prestigious museums in the world, issued a statement Friday capturing the depth of the despair in the art community and beyond. “Even in the darkest days of New York City’s fiscal crisis of 1975, and the national economic meltdown of 2008, the cultural treasures closely identified with our own city were never on the table — never considered an asset that might be cashed-in during a crunch to bridge a negative balance sheet,” Campbell said.
the state House of Representatives has no plans to take up the bill before members leave for a two-month summer break later this month.....
Attorney General Bill Schuette has said in a formal opinion that the collection at the Detroit Institute of Arts is not vulnerable to being sold to pay off any of Detroit's debt.
Schuette’s 22-page opinion that selling DIA art would run afoul of charitable trust law in Michigan does not settle the legal issues. But at least one lawyer who specializes in art and cultural history issues said it provides persuasive support for the museum, and marks the state’s top law enforcement official as an ally should the conflict wind up in court....
...Schuette’s opinion was issued in response to a request by Senate Majority Leader Randy Richardville, R-Monroe, who has introduced legislation that mirrors museum-world standards that prohibit the sale of art for any reason other than buying other art or otherwise enhancing the collection. The bill was approved by the Senate last week, but is not expected to be taken up by the House before legislators leave for summer vacation.
Bankruptcy experts have told the Free Press that the law probably wouldn’t create an effective firewall in a bankruptcy proceeding because federal law generally trumps state law.
Michael Rush, director of the Eli and Edythe Broad Art Museum at Michigan State University, said the support of a sympathetic state attorney general in Massachusetts was key to turning back a controversial plan hatched in 2009 by administrators at Brandeis University to sell off the school’s stellar collection at the Rose Art Museum.
Much of Detroit's debt is insured, giving bondholders protection against defaults. Two of the insurers, National Public Finance Guarantee Corp, a unit of MBIA and Assured Guaranty Ltd AGO.N, confirmed they attended the meeting.
“In the event that debt service payments by the City of Detroit are interrupted, National will ensure that its policyholders receive all of their principal and interest payments on time and in full,” spokesman Kevin Brown said.
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