Muniland’s greatest hits of 2012

January 8, 2013

The municipal bond market is one of the smaller corners of the bond market. It is dwarfed by the U.S. Treasury, government-sponsored organizations, mortgage and corporate bond sectors. Yet, muniland is larger than the equity market, as the data above (2011 and 2012 3Q year to date) shows, and it probably has more issuers than every sector combined. Muniland is a hopping place.

Everyday government pork

January 6, 2013

Everyone in Washington is fighting over tax cuts, spending limits and the debt ceiling. But the real problem is the fat in all levels of government spending that must be slimmed down. A quick media survey uncovers poorly monitored and misspent government funds at every level of the system.

Should the SEC hire bounty-hunters?

January 4, 2013

The majority of pundits and market observers have only tuned into the effectiveness of the SEC as financial market regulator since 2008, when the financial system nearly collapsed. So far, criticism has been relatively shallow. But when one of the most influential securities attorneys in America, Columbia University’s John Coffee, weighs in on the effectiveness of the SEC’s enforcement actions, we should all take note. Coffee’s SEC biography gives some background on his preeminence:

Is New Jersey fiscally imploding?

January 3, 2013

The governor of New Jersey, Chris Christie, held a press conference on Wednesday in which he excoriated the U.S. Speaker of the House, John Boehner, and other Republicans for failing to hold a vote on Sandy relief this week. With a tone that is rarely heard in national politics, Christie accused the Congressional leadership of his own party of “duplicity” and “selfishness,” according to The New York Times. Meanwhile, New York governor Andrew Cuomo and New York City Mayor Michael Bloomberg delivered more tempered comments.

Federal budget fantasies

December 29, 2012

Regardless of the outcome of the negotiations between President Obama and Congress, the government’s budget is seriously out of balance. Here is a fiscal picture for the federal government from February in a simple form:

Why the Federal Reserve should buy national infrastructure bonds

December 28, 2012

The Federal Reserve is in the middle of a third round of bond buying that is commonly called quantitative easing (or QE3). The goal is to suppress interest rates, and it was the main monetary policy tool that the Fed began using in December 2008 to support the financial system during the credit crisis. The financial system has returned to racking up record-breaking profits, and the Fed has shifted the purpose of QE to propping up the housing system and the general economy.

Higher online sales mean less state tax revenues

December 27, 2012

States on average derive about 49 percent of their revenue from sales taxes, so holiday shopping results are important for state treasuries. Unfortunately, the early read on holiday retail sales looks pretty bleak. Reuters reports (emphasis mine):

The epic Senate battle over relief funding for Sandy

December 26, 2012

New Jersey Governor Chris Christie recently berated Congress for its lack of progress on funding recovery monies for Hurricane Sandy. He made the argument that New Jersey and New York are net contributors to the federal treasury and they therefore deserve the funds that they requested. Yet, it is members of Christie’s own party who are slow-walking the legislation that would authorize spending. Republicans have raised some concerns – among them the amount of the original request and the need to budget for it.

Time to ban UBS from doing business in the U.S.

December 21, 2012

Times have changed since 1989. That year, bond king Mike Milken was indicted on 98 counts of racketeering and securities fraud. He served two years in prison after he pled guilty to six securities violations. Milken paid $1.1 billion in fines and disgorgement to investors. His firm, Drexel Burnham Lambert, settled civil and criminal charges, but it went bankrupt the following year.

The SEC rounds up muniland’s bad guys

December 20, 2012

The SEC – the top law enforcer for muniland – has been riding the range. With 17 municipal securities enforcement actions in 2012, the SEC cops have come up with a nice collection of scalps.