"Imbalances between countries in the euro area have created creditors and debtors and at some point the credit losses will need to be recognised and absorbed and shared around," he said.
It also calls for outside consultants to vet the sewer system's expenditures and costs, for a low-income assistance fund to be created at creditor expense, and for the county to catch up on its audited financial statements, which have been late ever since 2008.
In Indonesia in January, a company went further: it created fictitious creditors, hoping to vote down the real creditors who were pushing for liquidation.
Some creditors are willing to accept partial payments for debts if you work with the creditor to create a payment plan.
Under both forms of corporate reorganization, a fixed amount of capital losses must be distributed among "creditors". Bailouts create the impression of a free lunch, because they make taxpayers unwilling creditors who bear part of the capital losses.
Though he called on Congress and Mr. Obama to confront "daunting fiscal challenges," Mr. Bernanke said the debt ceiling should not be used as a negotiating tactic, warning that even the possibility of the United States not being able to pay its creditors could create panic in the debt markets.
These models fail to recognize that the most important form of secured debt, money credit secured by collateral, tends to create value for unsecured creditors as well as for the debtor.
It's also quite possible that the Greek imposition of capital controls and recent unwillingness to make a new deal with creditors helped create the panic among depositors leading to the most recent run on Greek banks.
People who don't pay their bills because they are broke create problems for their creditors -- but they aren't bad people.
Revenue fell 25percentto to $1.97 billion, "primarily a result of the continuing economic downturn and the uncertainty created by the creditor protection proceedings," the company said.
