Muni sweeps: Greenfields
Remaking our urban distressed areas is not easy. But cities are our economic and cultural centers. Reclaiming the exhausted areas opens up many possibilities.
The Brookings Institution has written a roadmap for renewal. It means changing some law. From the summary:.
Unfortunately, weak and antiquated state laws governing tax foreclosure, land banking, code enforcement, and other areas make it difficult for local governments to address vacancy and abandonment, and prevent them from unlocking propertiesâ productive potential. To give municipalities the tools the need to repurpose distressed land and buildings, states should:
- Reform inefficient tax foreclosure laws
- Create clear paths to public control of vacant and abandoned properties
- Empower effective code enforcement and nuisance abatement
- Enhance local governmentâs power to mitigate the harm created by mortgage foreclosure
What fiscal austerity looks like
The projected volume for municipal bonds issuance is falling and falling. This is what fiscal austerity looks like.
Citigroup Inc. lowered its estimate of U.S. municipal bond issuance this year to $240 billion from $275 billion a month ago, in part because fiscal austerity is leading local governments to borrow less.
âI keep cutting it and cutting it and cutting it,â George Friedlander, the bankâs chief municipal-debt strategist, told the National Federation of Municipal Analystsâ conference in Charleston, South Carolina, today.
âCutting ribbons equals being a spender, and thatâs a politically unpopular thing to do,â Friedlander said today.
More banks in bid-rigging scheme?
UBS paid a $160 million this week to settle muni bid-rigging probe allegations. Bloomberg points out that more banks are likely to be in the Justice Department’s cross hairs.
UBS followed Bank of America in settling a probe prosecutors say spanned more than a dozen Wall Street banks, insurers and advisers. Settlement documents and court records cite several unidentified companies, a sign that more cases are coming.
âThe investigation is active and ongoing,â said Christine Varney, the Justice Departmentâs antitrust chief, in a press conference May 4. âWhen every municipality that has been victimized by this conspiracy receives restitution, we will conclude.â
The case has revealed that Wall Street, during the same years when it was sowing the seeds of the financial crisis, was also cheating cities, states and school districts across the U.S. and using the unregulated derivatives markets to hide the kickbacks paid in the schemes.
I predict lots more to come in this probe and others.
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The Economist: Business paradise or den of thieves?