Muni sweeps: Dirty bonds?

May 24, 2011

Dirty bonds?

Economic Musings has posted an excellent piece on “community development district” [CDD] bonds. CDD bonds, commonly called “dirt bonds,” were widely used to fund housing development infrastructure during the real-estate bubble. Needless to say, many have been hit hard due to the collapse of the housing market. Economic Musings outlines the legal and structural details of these bonds and then questions whether high-yield muni bond funds are accurately valuing the securities in their portfolio:

Wall Street drives a truck through mile-wide hole in the rules

May 23, 2011

The Wall Street Journal and my fellow Reuters blogger Felix Salmon have both addressed the issue of the Bank of New York Mellon giving off-market or false prices on foreign-exchange trades to one of their clients, namely California pension fund Calpers.

Muni sweeps: “Intergovernmental downloading”

May 23, 2011

“Intergovernmental downloading”

Lisa Lambert of Reuters writes about a report issued by Fitch Ratings. From the Fitch report:

Muni sweeps: Happy “Bike to Work” day

May 20, 2011

House Committee launches ‘YourWitness’ program

From YouTube:

The [House] Financial Services Committee has launched a new program, Your Witness, which allows Americans to submit questions they want to ask a witness during a hearing. During an Oversight and Investigations Subcommittee hearing on the Stanford Financial Ponzi scheme, Rep. Randy Neugebauer asks the first question of Julie Preuitt.

Solve the real problems

May 19, 2011

Unfunded municipal pension liabilities are getting all the attention now, but it’s the burden of Medicaid and health-care expenses that are really crushing state and county budgets. In California, for example, the state will make a $2.4 billion pension contribution to Calpers and spend approximately $16 billion on Medicaid. The federal government kicks in an additional $25 billion.

Muni sweeps: Investing in shared infrastructure

May 18, 2011

Investing in shared infrastructure

My favorite article this week is by William Alden of the Huffington Post. He brings out an element of the municipal bond market that I’ve long believed could be the future of muniland: the propensity of people to invest in projects and entities that they have a first-hand experience or a connection to.

Muni sweeps: Rocking the digital city

May 17, 2011

Rocking the digital city

The New York City Mayor’s Office has published the “Road Map for the Digital City.” It’s an exciting vision of a city government connecting to and empowering its citizens.

Borrowing from the future to fund today

May 16, 2011

This august gentleman is William Gibbs McAdoo, the Secretary of the Treasury in 1917 when Congress passed the Second Liberty Bond Act and set the first statutory limit on the public debt of the United States. Now the current Secretary of the Treasury, Timothy Geithner, is struggling with the Congress to raise the debt limit for the 11th time since 2001.

Muni sweeps: Market turning points

May 16, 2011

A muniland expert alerted me that we passed a significant benchmark late last week. The benchmark, which market experts say is a key indicator, is the ratio between the yield for 10-year AAA municipal bonds and the yield for the 10-year U.S. Treasury note.  It hit a 12-month low of 82.35 last Thursday night.

Muni sweeps: Education reform for Illinois

May 13, 2011

Happy Friday all!

Illinois passes landmark education reform

The Chicago Sun-Times reports that the Illinois state legislature has passed a substantial education reform bill. The legislation severely restrains the power of the teachers’ unions: