Municipal and county money pits are becoming a theme.  Detroit’s fiscal hole is so deep–as much as 17 billion and counting–that the state-appointed emergency manager proposes a 90% haircut for bondholders and other investors. If they demur, bankruptcy court looms, a likely seismic event for municipal bond markets.

We’ve been following Harrisburg, Pennsylvania’s flirtation with bankruptcy and state takeover thanks to a high-priced municipal incinerator that once promised a bonanza of fees from trash carted in from beyond the city limits.  But few customers came and the incinerator’s exotic financing boomeranged in the fiscal crisis. The SEC now contends that things were dire earlier, but Harrisburg found ways not to let on.