Lending by banks is running ahead of the law

By Cate Long
August 3, 2011

Thou know’st that all my fortunes are at sea;
Neither have I money nor commodity
To raise a present sum: therefore go forth;
Try what my credit can in Venice do

Supporting less prosperous brethren

By Cate Long
July 29, 2011

There are many financial linkages between various levels of government in muniland but everyone eventually has to stand on their own. It’s like the cousin you grew up with but don’t see much now other than holidays. When your cousin loses their job and their mortgage is being foreclosed you want to help but in a limited way. You want the cousin to get a job and cut a deal on their mortgage or do a short sale. You don’t want them moving into your home or having access to your bank account. It’s the same between the federal, state and local governments. They are cousins. But not that close.

What would a debt-limit crisis cost the states?

By Cate Long
July 27, 2011

Thanks to Jordan Eizenga at the Center for American Progress, you can see some scenarios of the impact of the halt in payments to states if the debt ceiling is not raised. Jordan says:

The growing gap

By Cate Long
July 26, 2011

The debate between President Obama and Republicans in Congress is getting more and more confusing. The graph above might help a little in understanding what the basis for the argument is. There is a large and growing gap between revenues and outlays. The deficit, or the difference between what comes in and what is paid out, is funded by selling U.S. Treasury bonds. We have reached the upper bound of what we can issue unless the Congress increases the debt limit. This has repercussions everywhere, including states.  Reuters has an excellent overview of the effect on the states since they rely on the federal government for a significant portion of their funding.

Singing the passion song

By Cate Long
July 22, 2011

Singing the passion song

Kathleen Kennedy Townsend, the former lieutenant governor of Maryland, writes passionately in The Atlantic about the need to create jobs in the United States, especially those linked to infrastructure. I welcome her opinion as we need more passionate voices drawing attention to the need to stop outsourcing American jobs. We will never recover if we make economic decisions solely on the the basis of manufacturing costs. Ms. Townsend says:

Is muniland hiding its borrowing?

By Cate Long
July 14, 2011

Several financial-media outlets ran stories today about state and local governments ramping up their bank borrowing in lieu of issuing municipal bonds. Often this is depicted as “emergency” borrowing to fill thin periods of cash flows. The story of California’s possible “bridge loan” to tide over their current “bridge loan” in Bloomberg was cast this way.

Property taxes are all over the map

By Cate Long
July 14, 2011

From Credit Sesame (click through the map above for an even better interactive version):

America will never recover when China builds our infrastructure

By Cate Long
July 12, 2011

End game for America’s jobs

America will never recover if we outsource everything, including our public infrastructure. Bloomberg made the excellent video above about California outsourcing the construction of a portion of the San Francisco Bay Bridge to Shanghai Zhenhua, a Chinese firm. Shanghai Zhenhua is assembling the section and will then ship it to California for installation. The state is supposedly saving $400 million with this move. The workers at the Chinese facility are making $12 dollars a day.

The foolishness of Ann and Amanda

By Cate Long
July 11, 2011

Television is my least favorite medium because pundits usually strike outlandish poses that are wholly disconnected from the facts. Case in point is the short video above from MSNBC with Chris Hayes of The Nation, author Amanda Foreman, pundit Ann Coulter and political commentator and comedian Bill Maher. What are these people talking about?

Insurers have “manageable” muniland risk

By Cate Long
July 8, 2011

Insurers have “manageable” muniland risk

Meredith Whitney has made many assertions about muniland, but the only one that I had not heard from others before she stepped onto the national stage was her contention that insurance companies would be forced to sell their municipal bonds into a declining price spiral. She alleged this would collapse muniland, so it’s very interesting to see Moody’s assess the risk for insurance industry. From Property Casualty 360: