Why Detroit’s Bankruptcy Means a Higher Stock Market

By now I’m sure you’ve heard the news that Detroit has filed for bankruptcy. Many have speculated whether or not it was the right move to make or not, but the reality is that Detroit did file. I’d point out that Detroit was not the first municipality to file for bankruptcy court protection. Since January 2010, there have been 35 others. That’s a relatively high number over the last few years. While it pales in comparison to the 41,008 businesses that filed bankruptcy in 2012, the fallout of those municipal bankruptcies is good news for the stock market.

Sound a little counter intuitive to you?

Let me explain my reasoning.

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