This is from the lede paragraph in City Ledes August 15th newsletter:
The Lede: To those financial fretters in your life, those who worry about the market impact of municipal default, you can now offer them two words: Central Falls. The tiny Rhode Island city has emerged as the squalid symbol of the post-recession non-recovery. After hitting bankruptcy last month, the city asked for sacrifice from its pension holders—the people that fight its fires, police its streets, and teach its children. Then, the city passed a law ensuring that the people who hold its bonds would be paid in full. The fascinating story is more telling anomaly than urban trend-setter. Few cities are on such a sure path to insolvency. But, increasingly, cities of all sizes are shrinking in the face of swelling demand for services, even shirking on obligations to residents, while working hard to assure queasy markets that everything will be all right.