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Keyword: munibonds

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  • The Growing Public Pension and Muni Bond Bubble

    02/04/2016 6:11:39 AM PST · by artichokegrower · 18 replies
    American Thinker ^ | February 4, 2016 | Michael Bargo, Jr.
    A credit bubble is created when the amount of money borrowed exceeds the capacity of the borrower to pay it back. This concept is easy to understand, but the financial foundation of borrowing has been manipulated to an historic extreme by government. Not just through the national debt but through the agreements to create debt through public sector union contracts and municipal bond issuance.
  • Why Detroit’s Bankruptcy Could Detonate a $3.7-Trillion Muni Bond Bomb

    07/24/2013 10:26:53 AM PDT · by publius911 · 29 replies
    Wall Street Daily web ^ | July 24, 2013 | Louis Basebese
    The first officially recorded municipal bond was issued by the City of New York for a canal in 1812. It was a general obligation bond, meaning the city pledged every available resource – most notably, tax revenue – to repay the debt. So, in theory, unless the city lost its legal ability to levy taxes, which it never would, investors would be repaid... If Orr succeeds, look for all hell to break loose. Just like we witnessed during the real estate collapse when homeowners started walking away from their mortgage obligations without any recourse, other cash-strapped municipalities are destined to...
  • Meredith Whitney Is About To Seriously Double Down On Her Muni Doom Prediction

    02/21/2012 7:56:46 PM PST · by blam · 13 replies
    TBI ^ | 2-21-2012 | Joe Weisenthal
    Meredith Whitney Is About To Seriously Double Down On Her Muni Doom Prediction Joe Weisenthal Feburary 21, 2012 Meredith Whitney first predicted widespread muni doom in late 2010, and so far that hasn't come to pass at all. Since then, her reputation has definitely taken some hits, but she's not giving up on her big call by any means. According to Kevin Roose at DealBook, Whitney will be coming out with a new book in December called: “Downgraded: Why the Next Economic Crisis Will Be Local.” The book is being put out by publishing house Portfolio. Dealbook posted this paragraph...
  • CORRECT: Municipal Bonds Weaken As S&P Announces Widespread Downgrades(11,000+ muni bonds?)

    08/09/2011 8:35:21 PM PDT · by TigerLikesRooster · 9 replies
    WSJ ^ | 08/09/11 | Michael Aneiro
    CORRECT: Municipal Bonds Weaken As S&P Announces Widespread Downgrades By Michael Aneiro Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The municipal bond market weakened Tuesday after Standard and Poor's downgraded more than 11,000 public finance issues to keep them in line with its newly lowered rating on federal government debt. S&P said it had lowered to double-A plus from triple-A the ratings on certain public finance debt issues linked to the federal government, matching the downgrade it applied to U.S. government debt last Friday. While the number of issues affected is large, it covers less than 1% of the estimated...
  • Bernanke Rejects Bailouts

    01/10/2011 5:05:59 AM PST · by CutePuppy · 12 replies
    WSJ (no subscription) ^ | January 08, 2011 | Jon Hilsenrath and Neil King Jr.
    Federal Reserve Chairman Ben Bernanke on Friday ruled out a central bank bailout of state and local governments strapped with big municipal debt burdens, saying the Fed had limited legal authority to help and little will to use that authority. "We have no expectation or intention to get involved in state and local finance," Mr. Bernanke said in testimony before the Senate Budget Committee. The states, he said later, "should not expect loans from the Fed."The $2.9 trillion municipal-bond market has been stung recently by worries that some cash-strapped cities or states won't be able to pay off or roll...
  • Just How Freaked Out Should You Be About A ‘Muni Meltdown’?

    12/24/2010 7:58:03 AM PST · by TigerLikesRooster · 54 replies · 2+ views
    CNBC ^ | 12/23/10 | Jason Farkas
    Just How Freaked Out Should You Be About A ‘Muni Meltdown’? Published: Thursday, 23 Dec 2010 | 11:31 AM ET By: Jason Farkas America is now officially worried about a municipal bond meltdown. In a piece called "Day of Reckoning," CBS 60 Minutes showcased financial analyst Meredith Whitney’s bold prediction that we will see “50 to 100 sizable [muni] defaults...more. This will amount to hundreds of billions of dollars of defaults.” It’s a frightening forecast. Another sign that the muni issue has captured America’s attention: the number of people searching for the term ‘municipal bond’ on Google has spiked in...
  • Bubble trouble for muni bonds?

    12/17/2010 9:52:56 AM PST · by FromLori · 7 replies · 1+ views
    CNN ^ | 12/17/2010 | Colin Barr
    Muni bonds don't exactly turn heads when times are good. But lately they are getting a lot more attention than their embattled fans would like. After rising through the first 10 months of 2010, the average municipal bond fund has lost 3% in just the past month, according to TrimTabs. Some funds have lost 10% or more this fall, as the long bull market in Treasury debt has come up lame and worries about stretched state and local government budgets have started getting more attention. Muni funds have suffered outflows in five straight weeks, with $9.3 billion in investor funds...
  • Get out of Muni Bond Funds Now

    12/10/2010 9:08:03 AM PST · by JerseyHighlander · 22 replies ^ | December 10th, 2010 | David Goldman (Spengler)
    Get out of Muni Bond Funds NowDecember 10th, 2010 By David Goldman I’ve been warning for months that a few state and municipal bankruptcies (actually, a few states and a great many city bankruptcies) will be required to slay the beast of government-union pension liabilities. The total size of the muni bond market is about $2.4 trillion. Unfunded pension liabilities (calculated with a realistic discount rate) are almost as high, according to one study. Now comes James Pethokoukis of Reuters to tell us of a “secret GOP plan” to bankrupt local governments and crush the government unions.excerpt... My best guess...
  • Panic in the California Municipal Bonds

    11/17/2010 1:11:32 PM PST · by GilGil · 18 replies ^ | 11/17/2010 | Gil Guignat
    There is a fund called the PIMCO California Municipal Income Fund II symbol PCK on the New York stock exchange. In the last few days the fund has been going vertical down. Investors can’t get rid of this turkey fast enough. (SEE PICTURE TOP LEFT-DOUBLE CLICK ON CHART TO ENLARGE). “It might be argued that muni markets are merely reflecting similar declines in Treasuries (TLT). Fair enough. Bond holders, though, are probably are more interested in the fact that their bonds have declined rather than why. Warren Buffett warned back in June on the muni bond market as local and...
  • Cities Rent Police, Janitors to Save Cash

    07/19/2010 12:12:50 AM PDT · by The Magical Mischief Tour · 6 replies · 1+ views
    Wall Street Journal ^ | 07/19/2010 | Wall Street Journal
    Faced with a $118 million budget deficit, the city of San Jose, Calif., recently decided it could no longer afford its own janitors. So the city's budget called for dropping its custodial staff and hiring outside contractors to clean its city hall and airport, saving about $4 million. To keep all its swimming pools open and staffed, the city is replacing some city workers with contractors. "These are cases where the question is being asked, 'Is this a core service at the city level?' " said Michelle McGurk, senior policy adviser to the San Jose mayor. After years of whittling...
  • Municipal Bond Defaults Suggest Issuers "On the Brink"...

    07/16/2010 6:13:18 PM PDT · by the invisib1e hand · 25 replies · 1+ views
    Municipal borrowers defaulted at three times the typical rate even as the pace fell from records the past two years when Jefferson County, Alabama, and Lehman Brothers Holding Inc.’s failure sustained historic levels. Thirty-five municipal bond issues totaling $1.5 billion defaulted in the first six months of 2010, the Miami Lakes, Florida-based Distressed Debt Securities Newsletter reported in its July edition. That annualized $3 billion pace is triple the rate of $1 billion or less a year going back to 1983, Richard Lehmann, publisher of the newsletter, said in a phone interview today. The rest of the story...
  • Siegel: Even Muni Bonds Get Hit by Obamacare Tax Hikes

    05/28/2010 6:50:57 AM PDT · by TigerLikesRooster · 1 replies · 270+ views
    Money News ^ | 05/28/10 | Forrest Jones
    Siegel: Even Muni Bonds Get Hit by Obamacare Tax Hikes Friday, May 28, 2010 08:17 AM By: Forrest Jones President Barack Obama’s healthcare reform bill may no longer grab headlines like it did since its passage, but tax hikes related to the bill are lurking, says author and University of Pennsylvania Wharton School of Business Professor Jeremy J. Siegel. “The biggest negative is the surprise imposition of a 3.8 percent Medicare tax on investment income — the first time unearned income has been subject to such a tax,” Siegel writes in his column in Kiplinger’s Personal Income. Further tax hikes...
  • Municipal Bonds: Derailed

    05/15/2010 9:11:52 PM PDT · by mlocher · 21 replies · 1,054+ views
    SmartMoney via ^ | May 15, 2010 | Russell Pearlman
    It looked like the closest thing you could get to a sure bet — even in a city full of one-armed bandits. The state of Nevada planned to build a sleek, automated monorail that would ferry millions of tourists up and down the famed Las Vegas Strip. And they were funding it by selling more than $600 million in municipal bonds — some of them paying a hefty 7.5 percent in interest. With AAA ratings, they were the very definition of “safe” muni bonds. But something funny happened on the way to the casino. Fewer tourists came to Vegas, and...
  • SEC Probes Wall Street Selling of Muni Bonds: Report

    05/14/2010 7:02:13 PM PDT · by TigerLikesRooster · 7 replies · 249+ views
    Money News ^ | 05/14/10
    SEC Probes Wall Street Selling of Muni Bonds: Report Friday, May 14, 2010 08:08 AM The Securities and Exchange Commission is investigating whether Wall Street banks used their own money to bet in financial markets against municipal bonds that they had sold, the Wall Street Journal reported. Citing people familiar with the matter, the newspaper reported that the regulator is examining trades of municipal credit default swaps
  • Muni Abuses Weigh Down States, Cities

    02/25/2010 6:43:47 AM PST · by TigerLikesRooster · 5 replies · 346+ views
    RealClearMarkets ^ | 02/24/10 | Steven Malanga
    February 24, 2010 Muni Abuses Weigh Down States, Cities By Steven Malanga Speaking to the Wall Street Journal last week, the comptroller of Harrisburg, Pa., sounded downright glum as he explained his city's diminishing prospects of meeting a big upcoming bond payment. Harrisburg has just $1.2 million cash on hand and faces payroll costs alone of about $3 million a month. Even worse, it has about $17 million in debt payments coming due, a result of a series of "dizzying debt deals" according to a local newspaper. "We can't raise taxes; they're already very high," the comptroller explained. "If we...
  • Just How Strong Are Muni Bonds?

    08/13/2009 5:43:44 PM PDT · by Lorianne · 2 replies · 593+ views
    Governing ^ | 01 August 2009 | Josh Goodman
    Municipal bonds are usually thought to be a risk-free investment. Turns out that's not always the case. ___ Vallejo, California's bankruptcy last year represented the largest municipal default in 14 years. For 16 months, Jefferson County, Alabama has been unable to pay debts on billions of dollars in sewer bonds. Almost everywhere, tax revenues have plummeted, throwing the finances of local governments into disarray. So, are municipal defaults becoming more common? As it turns out, that question is part of the backdrop to a dispute between the Securities and Exchange Commission and local governments over regulation of the municipal bond...
  • Localities Want U.S. To Support Muni Bonds

    05/25/2009 6:02:45 PM PDT · by reaganaut1 · 24 replies · 1,281+ views
    New York Times ^ | May 25, 2009 | Leslie Wayne
    State and local governments are asking Washington to give them something that banks are trying to get rid of: federal bailout money. California is asking that money from the Treasury’s TARP, the Troubled Asset Relief Program, be used to help back more than $13 billion in short-term borrowings. Members of Congress and several municipalities want bailout money to be used to cover more than $1 billion in losses from investments by municipalities in debt issued by Lehman Brothers, the investment bank that went bust. And Representative Barney Frank, chairman of the House Financial Services Committee, is drafting legislation that would...
  • Legislation Coming This Week To Guarantee All Muni Bonds

    05/12/2009 1:16:57 PM PDT · by FromLori · 8 replies · 491+ views
    Federal government set to backstop all 50 states. One of the most insane ideas we've heard of may soon become reality. Fox Biz is reporting that the House Financial Services Committee is set to take up legislation this week that would establish a federal backstop for all Municipal bonds and muni insurance. This would, of course, represent another massive expansion of the government's guarantees and turn all states into Fannie and Freddy. Here are the details, again per Fox Business: Create a liquidity facility through the Federal Reserve to purchase municipal bonds, much like what the Federal Reserve does with...
  • Short-selling on U.S. states can pay off (shorting munibonds with credit default swap)

    10/03/2008 3:03:31 AM PDT · by TigerLikesRooster · 10 replies · 452+ views
    IHT ^ | 10/03/08 | Mary Williams Walsh
    Short-selling on U.S. states can pay off By Mary Williams Walsh Friday, October 3, 2008 While regulators were sprinting to save the financial system last month, someone was making a lot of money — by betting against the State of New Jersey. It is not clear who. But trading records suggest that in the panicked days when exotic derivatives were bringing the American International Group to its knees, traders were using the same kinds of derivatives, called credit-default swaps, to profit from New Jersey's rising tide of red ink. Speculators have long been able to short-sell stocks, making money when...
  • City gets good news for taxpayers (Portsmouth's muni bond rating goes up)

    06/21/2008 7:03:29 AM PDT · by TigerLikesRooster · 1 replies · 26+ views
    Seacost Online ^ | 06/19/08
    City gets good news for taxpayers Upgraded bond rating sign of strong finances June 19, 2008 6:00 AM PORTSMOUTH — The city announced that Moody's Investors Service, one of the nation's largest bond rating agencies, has upgraded the city's bond rating from Aa3 to Aa2, citing strong financial management, continuing growth, a large tax base and low debt burden as positive factors. "The upgrade to the Aa2 rating is driven by the city's healthy economy, which appears to be bucking national economic trends as development activity continues in this sizeable and diverse tax base and a continuing trend of a...
  • Warren Buffett withdraws bond re-insurance plan

    03/03/2008 8:17:00 AM PST · by TigerLikesRooster · 29 replies · 76+ views
    IHT ^ | 03/03/08
    Warren Buffett withdraws bond re-insurance plan Reuters Monday, March 3, 2008 NEW YORK: Warren Buffett said Monday that he was no longer offering to guarantee $800 million of municipal bonds backed by the monoline bond insurers MBIA, Ambac Financial Group and FGIC. On Feb 12, Buffett, the chairman of Berkshire Hathaway, offered to reinsure the bonds, but only at a steep premium. The offer excluded risky debt, including securities tied to subprime mortgages, which have caused billions of dollars of losses for bond insurers, leading them to seek new sources of capital or possible break-ups. Speaking on CNBC television, Buffett...
  • A corporate tax cut could hit state, towns

    01/08/2003 6:12:07 AM PST · by Incorrigible · 8 replies · 31+ views
    Newark (red)Star Ledger ^ | 1/8/03 | Tom Hester
    A corporate tax cut could hit state, towns Wednesday, January 08, 2003 BY TOM HESTER Star-Ledger Staff [Newark, NJ] -- President Bush's proposal to stimulate the economy by eliminating taxes on corporate dividends could end up costing state and local governments -- and ultimately taxpayers -- more money, some financial experts say.Many investors rely on municipal bonds as a means of minimizing their tax bills because the income they generate is free from federal, and often, state taxes. But new competition from another investment that provides tax-free income would probably mean that government entities would have to pay higher interest...