Muni sweeps: Muniland hits the airwaves

Change can be glacial, but it happens

Bloomberg digs a little deeper into the story of pension-fund woes and finds California municipalities are already adopting changes, with more to come:

In a survey by the League of California Cities, two-thirds of the 296 localities that responded said they’re negotiating changes in their plans. Thirty-eight percent had increased pension payments from current employees, and 20 percent had created a new tier of benefits for future hires.

Some believe the changes at the local level, particularly lower benefits for future workers, don’t go far enough.

“It deals with new hires, and right now we’re not hiring,” said John Moorlach, a supervisor in Orange County. “The only real change you can have is to go back to bargaining units” and negotiate increases from existing members, he said.

Blip blip

Chip Barnett of Reuters reports on the tiny inflow muniland-bond funds saw this week:


The thing I hear most often about muniland is how murky the market is. It is rather astounding that the municipal market is so little understood given its size and its effects on state and local governments and tax rates. To help shake the market up and create more transparency, I thought it would be helpful to start gathering muniland data sets for people to start playing with. Have at it, friends. Please send over any interesting findings.

Data pools Statistics at the State and Local Levels

Office of Management and Budget: Historical Tables

Bureau of Economic Analysis: Gross Domestic Product (GDP) by State and Metropolitan Area

US Census: Quarterly Summary of State & Local Tax Revenue

US Census: Government Employment & Payroll

Bureau of Labor Statistics: Local Area Unemployment Statistics Map

Bureau of Economic Analysis: Federal Recovery Programs and BEA Statistics

The National Association of State Budget Officers: Spring 2011 Fiscal Survey of States

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

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:

FT Alphaville typically estimates the size of the muni market at $2,900bn, based on year-end 2010 data from the Federal Reserve. The FT uses the same figure, occasionally rounding up to $3,000bn.

But the Fed is underestimating the size of the market by nearly $800bn, according to analysis by Citigroup’s municipal bond team.

Tri-level sunshine

Centers of power, by their nature, seek to control and hide information, but civil societies and stable governments require transparency to create the bedrock of confidence among their citizens. Every government must commit itself to open dealings and renew that commitment on an ongoing basis. We have good news from the state of Vermont that this commitment has spread to the state and local level.

Transparency at the federal level got a big boost when President Lyndon Johnson signed the Freedom of Information Act in 1966. Wikipedia says the Act “allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States Government” and that it also “defines agency records subject to disclosure, outlines mandatory disclosure procedures and grants nine exemptions to the statute.”

Some have argued that Congress has carved out too many exemptions to the law, but there are many instances where the FOIA has been an effective tool for opening up the records of important government actions.  Without FOIA requests from deceased Bloomberg reporter Mark Pittman, for instance, the public would have never learned the details of the Federal Reserve’s facilities that funneled $3.3 trillion to financial institutions during the financial crisis.

Muni sweeps: The Chairman’s presser

It’s an historic day for the bond markets as the Chairman of the Federal Reserve, Ben Bernanke, will conduct a live press conference following the conclusion of the Federal Open Market Committee’s two-day meeting.

Reuters will be live blogging the Federal Reserve press conference beginning at 11:30 ET and webcasting the press conference at approximately 2:15 ET.

Downhill for muniland

Credit quality for municipals is on a downward slide. From Bloomberg:

U.S. municipal-bond credit ratings were cut last quarter at the second-fastest pace since 2002 amid the “toughest year so far” for state and local governments since the recession began, Moody’s Investors Service said.

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