El blog reúne material de noticias de teoría y aplicaciones de conceptos básicos de economía en la vida diaria. Desde lo micro a lo macro pasando por todas las vertientes de los coyuntural a lo más abstracto de la teoría. La ciencia económica es imperial.
Though it may seem hard to believe, many hedge funds are betting that Detroit's bonds — which are backed by insurance firms that could continue to pay bondholders for now — will be quite lucrative in the long run.
There aren't even enough bonds to go around, with hedge funds are sitting on a long waiting list.
Shortly after Detroit filed for bankruptcy, several hedge funds managed to buy $5 million of pension bonds for 41 cents on the dollar. Those were some of the only pension obligation bonds available.
Hedge funds are also eyeing about $1 billion in general obligation bonds backed by Detroit. More of these have changed hands, but also in small increments. One hedge fund manager said he was able to procure $30,000 of general obligation bonds at 75 cents on the dollar from a dentist in Milwaukee. The fund was hoping to buy several millions of dollars' worth, but so far, that's all they can get their hands on.
It's a risky bet, but one expert told CNNMoney that bondholders tend to recover more in municipal bankruptcies than corporate ones.