Watch Jefferson County Commission hearing live

By Cate Long
August 4, 2011

The Jefferson County Commission is meeting now to review a counter-proposals from creditors lead by JP Morgan and decide whether to accept it or file for Chapter 9 bankruptcy. Live feed via the Birmingham News.

Geeks for democracy

By Cate Long
July 28, 2011

Geeks for democracy

“How do you enable people to have a louder voice within their communities?” asks Conor White-Sullivan. He answered his own question by developing Localocracy, a platform that hosts community-focused discussion boards seeking participants who are registered to vote and who use their real names. Localocracy gives citizens an opportunity to generate discussions to influence each other, their government and journalists.

The state becomes the guarantor

By Cate Long
July 27, 2011

Jefferson County, Alabama is getting a lot of attention as it negotiates with the holders of $3 billion of sewer bonds. The county would like to pay $2 billion to settle the $3 billion of bonds outstanding and limit the rate increases county residents would have to pay. This arrangement would pay bondholders (led by JP Morgan) 66 cents on the dollar — not a great recovery but not outrageous either. Bondholders want the state to guarantee this new arrangement and stand ready to pay in the event of another default.

Most expensive sewage system in history

By Cate Long
July 21, 2011

If you say “Jefferson County” to a professional in muniland, you will likely get a shudder of mild revulsion. This Alabama county is the biggest example of Wall Street aggression towards a public entity since Orange County, California declared bankruptcy in 1994 after buying too many interest-rate derivatives. Dodd-Frank, the financial-reform law that’s been in effect for a year, changed the rules for municipal bonds and derivatives.  But did it change them enough to avert a repeat scenario?

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):

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:

Two strikes against JP Morgan

By Cate Long
July 7, 2011

Can too-big-to-fail banks be restrained from engaging in fraudulent and manipulative practices? Or should we expect large, global banks to keep breaking the rules over and over again?

Don’t borrow in the dark, Governor Christie

By Cate Long
June 30, 2011

Every family encounters times when bills are due and they don’t have money. If this happens to a state or local government, they go to the municipal bond market where they can borrow short- or long-term. In the current market they are likely to find a lot of willing lenders.  These lenders will lend at very reasonable interest rates, and the terms of the borrowing will be made public so taxpayers can see what their obligations are.

The global spiderweb of debt

By Cate Long
June 27, 2011

If you are not familiar with the municipal bond market, you may think that muniland is nothing more than states, municipalities and school districts offering plain bonds that mature on a set date and offer a fixed interest rate. That is the textbook description.