This Class is Unimpaired by the Plan

By Cate Long
September 26, 2011

Ted Nesi @tednesi Ted Nesi  The Dow is down 4% as I write this. But I’m sure the market will turn around once Central Falls releases its Ch9 plan at 3.

Part-time employment up in muniland

By Cate Long
September 26, 2011

Incredible shrinking workforces

I’ve read in a few places that state and local governments were reducing the number of full-time employees and hiring more part-time workers. There is a story in the Dayton Daily News that nicely details the trend:

Muniland holds steady

By Cate Long
September 20, 2011

Municipal bond ownership has remained relatively steady over the past year, according to the Federal Reserve’s latest Flow of Funds data, which was released yesterday (Fed’s L.211 Municipal Securities and Loans page 92). The data paints a different picture than the one we typically hear from the media of large outflows from retail investors and mutual funds following Meredith Whitney’s prediction of massive municipal defaults. Essentially the whole municipal bond market has increased slightly in size, growing from $2.842 trillion in 2Q 2010 to $2.886 trillion in 2Q 2011. Ownership for all categories has remained pretty steady.

Dark times at the post office

By Cate Long
September 7, 2011

One of America’s oldest institutions is facing default. The United States Post Office could be forced to stop delivering mail at the end of September. The rhetoric around the issue is beginning to sound like the potential default of U.S. government debt obligations during the debt ceiling debate. A report from the Government Accountability Office (GAO) tells the fiscal tale:

Harrisburg, PA next?

By Cate Long
August 25, 2011

Bankruptcy for Harrisburg finally?

The fiscal troubles plaguing Harrisburg, Pennsylvania have been well telegraphed in muniland. Reuters detailed the problems earlier this month:

Political heat at S&P for ratings downgrades?

By Cate Long
August 23, 2011

The Daily Show – What Are You Friggin’ Nuts Over There?

 

S&P replaces president after U.S. downgrade

The board of directors of McGraw-Hill met Monday and voted to oust Deven Sharma as president of their Standard & Poor’s rating division. This forced resignation comes approximately three weeks after S&P downgraded the debt of the United States. Jon Stewart, in the clip above, jokes about political pressure brought to bear on the company by the U.S. government. I think he is spot on with his humor.

“We don’t have a deal”

By Cate Long
August 16, 2011

The Jefferson County Commission met last Friday to decide if they would accept a proposed settlement from creditors led by JP Morgan on their $3 billion of sewer debt. After many hours of meeting in executive session and in public, the Commission voted to reject the proposal, remove the court appointed receiver and directly negotiate with the creditors.

Chapter 9 struggle: Unions are buying power

By Cate Long
August 15, 2011

“The unions are buying power”

This is a great video of Stephanie Gomes discussing her experience as a member of the City Council in Vallejo, California, as they struggled through a municipal insolvency and bankruptcy. She talks about the power of the police and firefighter unions and their stranglehold on local politics. Gomes comes across as passionate citizen who was willing to confront some of the deep-seated problems in her community. She highlights the importance of local and national media attention on the “dirty laundry” of municipal finances like high salaries and generous pensions for union workers. Her experience is an important lesson for anyone interested in muniland.

Watch Jefferson County Commission hearing live

By Cate Long
August 4, 2011

The Jefferson County Commission is meeting now to review a counter-proposals from creditors lead by JP Morgan and decide whether to accept it or file for Chapter 9 bankruptcy. Live feed via the Birmingham News.

Hospitals, higher ed and housing

By Cate Long
August 4, 2011

Howard Cure, director of municipal research at Evercore Wealth Management, is asked in this Bloomberg video if Jefferson County, AL and Central Falls, RI are leading indicators of massive defaults in the municipal bond markets. He thinks not. After all, he says, these problems have been known for years.  For Cure, the real focus should be on what he calls the “three H’s:” hospitals, higher education and housing.  These entities are often heavily reliant on federal funds, which may be reduced in deficit negotiations. Muniland agrees and reminds everyone that there are vast differences in the fiscal and financial strengths of issuers.