The New York Times reported on Wednesday that Sallie Krawcheck, formerly of Citi and Bank of America, is the leading contender to be named chairman of the Securities and Exchange Commission. Let’s hope that President Obama comes to his senses and names someone more fit to the post. From the Times:
It looks like smooth sailing for the municipal bond market in 2012, according to three senior market participants who exchanged views at the Fitch Ratings 2012 Municipal Credit Forum. Continued strong demand for municipal bonds, ongoing low bond issuance, favorable Federal Reserve rate policy and major banks upping their direct loans to municipal entities will make 2012 another strong year.
Michigan called on Citibank to help repay about $3 billion the state owed to the federal government for expenses racked up during the deepest part of the recession. Like many states, Michigan had to manage soaring unemployment insurance costs and borrowed from the feds to help workers who had lost their jobs. Washington had given these loans on very advantageous terms, but like a teaser rate for a credit card, those are expiring and interest costs will soon jump for borrowers. So Michigan, like Texas and Idaho, has refinanced these payments.
The solution to Greece’s debt crisis that Europe’s leaders announced on Thursday has market participants and commentators howling. It includes a provision that changes long-established rules for credit-default swaps mid-game. Mike Dolan, Reuters’ Investment Strategy Editor in Europe, said this:
Alaska got a lot of attention several years ago when members of Congress belittled and then stripped the funding for the infamous “Bridge to Nowhere.” You would think the issue would have faded away as quietly as the Alaskan wildnerness, but the state’s penchant for building bridges to places with few inhabitants has actually been reborn in the Knik Arm Bridge Project, or the Bridge to No Where Part 2. And this time it’s not only members of Congress who are skeptical– locals are pushing back on this new project with lots of facts.
How does $775 billion of bonds go missing?
There is a sleeper story in muniland about a big pile of just-discovered municipal bonds. The story has some odd twists and turns. John McDermott of FT Alphaville scooped the details yesterday: