When the city of Detroit filed for bankruptcy protection last month, the news was delivered more as a sad but unsurprising anecdote at the end of a long list of bad luck from a city that wears its toughness on its sleeve.
Some even went as far as labeling the Motor City's historic, unprecedented collapse as a turning point rather than a flash point, that marks Detroit's first real step towards recovery, rather than the catalyst for copycat filings by other cities and towns in the state and region.
While parallels have been drawn between Detroit and Chicago for their huge unfunded pension liabilities, Jack Ablin of BMO Private Bank says his hometown is in an entirely different position.
"Chicago has similar obligations, but I don't think the problems are the same," he says, noting that Chicago's population is stable and growing and real estate prices are rising, whereas Detroit's demise has been a slow and steady decline that started in the 1970s.
To be sure, the way in which Detroit decides to deal with its problems and obligations will have an impact and set legal precedence for other ailing cities, when it reveals its plans to a judge at the end of the year. But even now, Ablin says he can see the effect of Detroit spilling over to Illinois.Read More »from Is Chicago the Next Detroit?