December 14: Muniland Snaps

By Cate Long
December 14, 2011

Child homelessness: the saddest American metric. Source: Stephen Culp, Reuters

Good Links

Bloomberg: Meredith Whitney, you are clueless and here is why

NYT: Public pensions and private equity

CEF Connect: Muniland overheating slightly as closed-end fund priced higher than NAV

National Conference of State Legislatures: 2009 state legislator education levels

NYT: Medicaid is the states’ monster

Stateline: Budget cuts are creating backlogs at state agencies

McClatchy: South Carolina, home to a lot of military facilities, is bracing for budget cuts

FT: The toffs at the FT consider Pittsburgh the U.S.’s “most livable city”

@Twitter Talk

Kelly John Rose @kjrose Kelly John Rose  Fascinating: Top economists show graphs that explain the past year of madness.  bbc.co.uk/news/in-pictur…

Chad Pergram @ChadPergram Chad Pergram   Clock really ticking on keeping fed govt open. Funding expires at 11:59:59 pm et Friday. There’s trouble if they don’t file bill today.
David Roberts @drgrist David Roberts    Rep. Jim Clyburn: “We don’t demand drug testing for people getting farm subsidies.”  politi.co/uRzZKC

CSMonitor.com @csmonitor CSMonitor.com   ’Since 2007, the homeless child population in 15 states increased by more than 50 percent.’  fb.me/1suqK2U8s

Phila Fed Com Dev @PhilFedComDev Phila Fed Com Dev  Add an interactive widget that produces demographic maps of communities to your website.  ow.ly/7Pfe6

Rich Saskal @RichSaskal_BB Rich Saskal   Designing solar rooftop for Salt Lake convention center far less challenging than the $7 million financing.   bondbuyer.com/issues/120_238…

Platts gas @PlattsGas Platts gas   Texas joins Colorado in passing rule for fracking disclosure. Read full Platts story: plts.co/tex1213
Tim Maniccia @tmaniccia Tim Maniccia   Gov. John Kitzhaber orders Oregon government hiring freeze oregonlive.com/politics/index…

2 comments

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Cate -
What gives with the quote in the Meridith Whitman article, to wit:
“Richard Lehmann, the Miami Lakes, Florida-based publisher of the Distressed Debt Securities Newsletter, has predicted a record of at least $20 billion in municipal defaults this year, including some that don’t involve missed payments so aren’t counted as such by other analysts, according to Matt Fabian, a Municipal Market Advisors managing director. Fabian says by his count, defaults have reached $2.1 billion this year, down from about $2.8 billion in 2011. Even by Lehmann’s count, the pace falls far short of Whitney’s outlook.”
Putting aside he likely meant 2010, not 2011 in next to last sentence, the clear impression is that we’re looking at muni defaults of something a little north of $20mil.
However, in the next article, Year End in Muniland, Part I, we get the following quote:
“During 2011, America Airlines (AA) accounted for $3.4 billion of muni defaults while Tobacco bonds had $16.9bln of defaults. Combined, AA and the tobacco bonds comprised slightly more than 87% of municipal bond defaults. Even though the volume of defaults has risen (and may continue to rise due to the presence of $50bln of outstanding Tobacco Bonds) we do not believe that there are systemic problems within the muni market.”
In other words we’ve got a discrepancy of at least one of order of magnitude in defaults for 2011. How does this get reconciled?

Posted by Muniman | Report as abusive

Hi Muniman:

There are always differences in muniland stats… some is a matter of definition and some is a matter of better data. But the paragraph you cite from Bloomberg seems to be a missed edit:

Richard Lehmann, the Miami Lakes, Florida-based publisher of the Distressed Debt Securities Newsletter, has predicted a record of at least $20 billion in municipal defaults this year, including some that don’t involve missed payments so aren’t counted as such by other analysts, according to Matt Fabian, a Municipal Market Advisors managing director. Fabian says by his count, defaults have reached $2.1 billion this year, down from about $2.8 billion in 2011. Even by Lehmann’s count, the pace falls far short of Whitney’s outlook