Muni swaps moving higher

By Cate Long
June 21, 2011

Lisa Pollack of Markit in London sent over some interesting charts of U.S. municipal swaps. I put up this one which shows the market perception that risk is increasing again for some states, particularly Illinois and California. It is important to remember that these markets are thinly traded and that there is a large block of muni CDS written on California that is coming to market from the bankruptcy of Lehman Brothers.

National Totals of State Tax Revenue, by Type of Tax

The U.S. Census brings us these figures for taxes collected at the state level for 2010. You can see the substantial reliance on individual income and sales taxes (I left off some categories to fit the table in. Click through to the Census document to see more data):

Quarter Total tax Individual income Corporate income Property tax State sales tax
2010 4Q $ 177B $ 61B $ 9B $ 4B $ 57B
2010 3Q $ 168B $ 57B $ 7B $ 3B $ 56B
2010 2Q $ 204B $ 72B $ 14B $ 3B $ 54B
2010 1Q $ 163B $ 52B $ 8B $ 8B $ 54B

 

Big step forward in New Jersey

Drowning in a sea of future pension liabilities, the New Jersey  Senate took a big step forward by agreeing to public-sector pension changes. Reuters reports:

[Republican Governor Chris Christie] Christie reached a deal this month with New Jersey’s two top Democrats, Senate President Steve Sweeney and Assembly Speaker Sheila Oliver, that would require the state’s 500,000 public employees to pay more toward their benefits.

It also would raise the retirement age for new employees and eliminate cost of living adjustments for workers who have already entered retirement.

Telling off people not a great political strategy

From Political Wire:

A new Quinnipiac poll in New Jersey finds Gov. Chris Christie with an upside down approval rating, 44% to 47%.

Key findings: Women disapprove of the job Christie is doing 54% to 36%, while men approve 53% to 39%, a 17-point gender gap.

Said pollster Maurice Carroll: “Christie is having a big problem with women, perhaps because they care more about schools and disapprove 60% to 34% of the way he’s handling education.”

Today’s best muniland links

Bloomberg: Stray Cats Roam Tampa as U.S. Local Services Lapse With Shrinking Payrolls

USA Today: U.S. states lead on energy efficiency, lower utility bills

Bloomberg: Georgia’s $1 Billion Issue Leads Weekly Offerings: Muni Credit

Reuters: Leader of the Pack: Tax-frees municipal bonds outperform

Bond Buyer: Goldman Will Pay $1.43B to Run Puerto Rico Toll Road

Vanguard: The muni investor’s choice: Bond funds or individual bonds?

Marketplace: Racine mayor looks for ways to bring down unemployment

Sacramento Bee: Steinberg raises legal questions about withholding pay

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