Calpensions asks: “Now will the big national bond insurers, who lost the first round when Stockton was ruled eligible for bankruptcy in April, decide the main battle has shifted to Detroit and cut a deal with Stockton, where they have less exposure and a weaker hand?”
Good question. My guess is they’ll fight to the last cartridge on both fronts. They are seeking to preserve their status as a rentier class above the pain of the recession. But maybe they’ve finally figured out they can’t bully Stockton.