Muniland is shrinking
Although municipal tax revenues have rebounded in the last few quarters, the declines of prior years have hit state and local employment hard. In the chart above Matt Yglesias shows the collapse of state and local revenues; with the collapse of revenues we’ve seen the loss of many muniland jobs. Now the story is pivoting to large potential job losses at the federal level.
The New York Times is reporting that:
The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.
Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.
And as the Congress considers reducing military spending, defense contractors are preparing for job cuts too. Although I’m sorry any person would lose a job I won’t mourn military job losses. We spend way too much money on this sector. Bloomberg had a good video on the potential fallout:
Daily Rater roundup
Muniland: Are raters accurate?
Harvard Business Review: Ratings Agencies Are the Darnedest Things
American Banker: S&P Backlash May Hasten Pursuit of Credit Ratings Alternatives
The Economist: Substandard & Poor
@MillerTabak: massive gyrations in financial markets are the byproduct of zero interest rates – picture a market trying to add value in a row boat
@Fixedology: Meredith Whitney was on CNBC again yesterday. She did not talk about municipal bonds .
Follow me at @cate_long and muni issues at #muniland
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