Markets hold the whip, but are they rational?

By Cate Long
July 27, 2011

There has been a lot of discussion over the past few days about whether the United States deserves a triple-A rating. The weak and meandering attempts of the Congressional leadership and President Obama to reach a consensus on raising the debt ceiling has prompted this storm of confusion. The political theater is painful.

Green shoots?

By Cate Long
June 29, 2011

Green shoots?

Reuters reports on recent data from the U.S. Census Bureau that shows how tax revenues are improving:

Muni swaps moving higher

By Cate Long
June 21, 2011

Lisa Pollack of Markit in London sent over some interesting charts of U.S. municipal swaps. I put up this one which shows the market perception that risk is increasing again for some states, particularly Illinois and California. It is important to remember that these markets are thinly traded and that there is a large block of muni CDS written on California that is coming to market from the bankruptcy of Lehman Brothers.

Muni sweeps: Lockyer rides again

By Cate Long
June 8, 2011

CA Treasurer launches another derivatives investigation

We often see Wall Street selling sophisticated products to state and local governments which are not appropriate for them — think interest rate swaps and Jefferson County. So it’s always refreshing to find a government official who actually tries to keep Wall Street in line.

Muni sweeps: Derivatives transparency for dummies

By Cate Long
June 3, 2011

Downdraft

The colorful chart above is from Lisa Pollock of Markit and shows the states which have the most traded credit-default swaps and their spreads to the benchmark. Bloomberg has more on that theme.

Muni Sweeps: Muni CDS

By Cate Long
June 2, 2011

Lisa Pollack of Markit in London posted via Twitpic this table of DTCC data on municipal credit default swaps. Since California is the biggest muniland issuer it’s not a big surprise that it leads with the greatest number of contracts outstanding.

Golden muni derivatives

By Cate Long
April 28, 2011

Is the “Golden State” golden?

Some banks and hedge funds don’t think California is so golden after all. And they have bought credit default swaps insuring (or betting) against it’s default.

Muni sweeps: Strutting her stuff

By Cate Long
April 15, 2011

Philly mummers 2009

She may not be the prettiest girl but at least she’s out there

The home of the famous Mummer’s parade struts its stuff for the bond markets.

Muni sweeps: Christie’s battles are not credit positive

By Cate Long
April 13, 2011
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We are a nation of states with differing political cultures and leaders.  Loud leaders and quiet leaders.