Chapter 9: Muniland’s long road to bankruptcy

By Cate Long
June 16, 2011

There has been so much talk in muniland about massive defaults, but so far there has been very little discussion about the actual mechanism of default and municipal bankruptcy. Public entities generally try everything before resorting to default or bankruptcy. The video above is an excellent primer on the many choices that can be made leading up to the end game.

Muni sweeps: Muniland reins in the borrowing

By Cate Long
June 14, 2011


Excellent chart from Barry Ritholtz’s The Big Picture. He uses data from the Federal Reserve’s Flow of Funds Accounts to map credit flows. State and local governments have become negative borrowers in the first quarter as the amount of bonds that have matured and the amount of principal that has been repaid exceeded new bond issuance. States and municipalities are making the hard fiscal choices and restraining borrowing and expenditures. It’s painful, but it must be done.

Something smells funny around Yankee Stadium

By Cate Long
June 13, 2011

Bloomberg covered an interesting story today about the bonds which financed the parking garages at Yankee Stadium in New York. The $237 million of securities are “revenue” bonds issued by the Empire State Development Corporation. They have no guarantee and no rating, and it looks likely that the bonds will default.

Flight three of muniland’s harpy

By Cate Long
June 9, 2011

I had really hoped that Meredith Whitney had gone back to analyzing banks and trying to interpret how the new Basel 3 liquidity ratio would be phased in. Unfortunately, she is back touring the mainstream financial media with another shrill message for muniland.

Muni sweeps: How does $775 billion of bonds go missing?

By Cate Long
June 7, 2011

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:

Would the real default rate stand up?

By Cate Long
April 19, 2011

US_MUNIDEFAULT0411_SC Several of my Reuters colleagues sent over this graph. My editor said “it’s nice but doesn’t give much historical context.”

Muni sweeps: Increasing the muni investor pool

By Cate Long
April 18, 2011

It’s a glorious spring day in America and everything continues to bounce along. A little progress here and some fall back there. Oh and that unpleasant negative ratings watch on United States debt from Standard & Poor’s. Yeah that is not good. Welcome to a new week in muniland.