MuniLand

Munis gain as stocks sell off

In a risky world, we’re seeing a flight to quality that’s benefiting muniland. From the Los Angeles Times Blogs:

Turns out it was a good idea to keep the faith in tax-free municipal bonds last winter when so many investors were bailing out.

It was an even better idea to buy more munis at that point.

While the stock market has dived this week investors have been bidding up the value of many muni bonds, apparently hungry to lock in tax-free yields.

That demand has pushed muni market yields sharply lower, in tandem with the steep decline in yields on U.S. Treasury bonds.

Further:

Financial Times: US municipal bonds bounce back

Bond Buyer: Munis and Treasuries Get Crazy

Bookends of muniland fraud

The Bond Buyer has an excellent article on the efforts of five Wisconsin school districts to get their money back after being defrauded by their brokers:

Connecticut issues layoff notices

The governors are getting it done. And it’s painful.

From the Wall Street Journal:

After months of closed-door talks with state employee unions, Connecticut Gov. Dannel Malloy announced that no deal could be reached to garner $1 billion annual concessions needed to close a $3.5 billion budget gap.

“The state employee representatives have thus far not offered enough,” Malloy said in a statement Tuesday morning.

To balance the two-year $40.1 billion budget and comply with contractual layoff notice requirements, Malloy said layoff notices would go out Tuesday to “the first 4,742 state employees,” resulting in an estimated savings of $455 million. The remaining $545 million in savings would be achieved by cuts to government programs, which could result in additional layoffs.