Muni sweeps: Muniland reins in the borrowing

June 14, 2011

Excellent chart from Barry Ritholtz’s The Big Picture. He uses data from the Federal Reserve’s Flow of Funds Accounts to map credit flows. State and local governments have become negative borrowers in the first quarter as the amount of bonds that have matured and the amount of principal that has been repaid exceeded new bond issuance. States and municipalities are making the hard fiscal choices and restraining borrowing and expenditures. It’s painful, but it must be done.

Delaware opens the procurement kimono


Delaware has launched a new website to make it easier for entrepreneurs, small businesses, and other employers to do business with the State of Delaware. The new website will serve as a resource for companies interested in bidding for State contracts. The Governor hopes that the site will make the bidding process easier and more transparent for business owners so they can create jobs in the state easily…

…The public will also be able to see state spending trends and details of contract usage. The public can also access business development tools, customer satisfaction surveys and “I Found it Cheaper,” which allows individuals to submit suggestions on how the State can procure goods for less money.

Has local law enforcement become too militarized?

The overuse of swat teams in law enforcement is a topic that I’ve wondered about and rarely seen addressed in the mainstream media. Here is an interesting pull-quote from the Rutherford Institute:

While the frequency of SWAT operations has increased dramatically in recent years, jumping from 1,000 to 40,000 raids per year by 2001, it appears to have less to do with increases in violent crime and more to do with law enforcement bureaucracy and a police state mentality.

Indeed, according to Kraska’s estimates, 75-80 percent of SWAT callouts are now for mere warrant service. In some jurisdictions, SWAT teams are responsible for servicing 100 percent of all drug warrants issued.

A Maryland study, conducted in the wake of a botched raid in 2008 that resulted in the mistaken detainment of Berwyn Heights mayor Cheye Calvo and the shooting deaths of his two dogs, corroborates Kraska’s findings. According to the study, SWAT teams are deployed 4.5 times per day in Maryland with 94 percent of those deployments being for something as minor as serving search or arrest warrants. In the county in which the Calvo raid occurred, more than 50 percent of SWAT operations carried out were for misdemeanors or non-serious felonies.

Governor Brown Update on the Budget – June 12, 2011

Conduit bonds are the stinkers

The Los Angeles Times has an excellent article today on conduit bonds (revenue bonds):

Although conduits account for roughly 20% of all municipal bonds, they have been responsible for about 70% of all defaults in the municipal bond market in recent years, according to Income Securities Advisors, a Florida research firm. Over the last two years, the five municipal bond issuers with the most troubled bonds have all been conduit bond issuers, according to Municipal Market Advisors, a Concord, Mass., research firm.

“It’s the conduit bonds that are really at the root of the default problem,” said Richard Lehmann, the founder and president of Income Securities Advisors Inc. Lehmann’s firm estimates that $35.7 billion worth of conduit bonds have defaulted since 1980, and many of those have returned little to investors.

Mini sweeps

FT Alphaville: A bit more on the $775bn of missing muni bonds

Washington Examiner: How to get a federal health-care waiver (Hint: it involves former government health-policy officials)

Chronicle of Higher Education: How educated are state legislators?

Wall Street Journal: Read the Lehman Court Filing that Shook the Muni Market

Governing: Nonprofits Seek Relief and Support from States

Bloomberg: New York’s Fiscal Picture Brightens With Budget, S&P Says

New York Times: Albany Money Flows to Clients of Firms Employing Legislators

Reuters: Penn. issues rescue plan for indebted Harrisburg

Bloomberg: Southern California Home Prices Fall 8.2% on Weak Employment Parma and Parma Heights agree to share safety resources

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