The Fed’s data snafus

By Cate Long
October 23, 2011

Most everyone knows that the Federal Reserve Board is responsible for making monetary policy, handling prudential oversight of many of the nation’s banks and keeping the clearing and payment system flowing. But the Fed has another fundamental function that often goes unnoticed: collecting financial and economic data.

A drought of municipal bond issuance

By Cate Long
October 17, 2011

All year long, muniland has been dragging its feet on issuing bonds. Budgets have been much too constrained to take advantage of historically low interest rates. At the end of the third quarter of 2011 issuance was 39 percent lower than 2010, according to Thomson Reuters SDC data. Nine-month issuance for 2011 was $160 billion versus $262 billion for the same period last year.

Harrisburg has more than incinerator debt

By Cate Long
October 14, 2011

The current bankruptcy drama in Harrisburg, Pennsylvania is just the third act of a long running effort to make the city something more than a corridor for those who commute into the city for work. Most of the current debt problems of Harrisburg stem from failed projects intended to revitalize the city and extremely bad business decisions.

All high government approval ratings are local

By Cate Long
October 3, 2011

This great graphic from Visually maps the public’s great discontent with the federal government using data from the Pew Research Center. It’s hard to imagine the numbers being any worse than this: 11 percent of the public is satisfied with the officials in Washington, DC.

The calmest seas you will ever see

By Cate Long
September 30, 2011

Low issuance, low defaults and low rates

For issuers, conditions are just about perfect in muniland now. Many have defered or withdrawn planned bond offerings, leading to greatly reduced supply for the year. Bloomberg estimates that 3rd quarter total issuance will be about $67 billion. This follows the $117 billion in muni securities issued in the first half of the year (data from SIFMA, Excel file link).

More Whitney rebuttals

By Cate Long
September 29, 2011

The media is full of municipal bond market participants rehashing Meredith Whitney’s prediction of muni collapse which began last September. From Bloomberg:

Part-time employment up in muniland

By Cate Long
September 26, 2011

Incredible shrinking workforces

I’ve read in a few places that state and local governments were reducing the number of full-time employees and hiring more part-time workers. There is a story in the Dayton Daily News that nicely details the trend:

Cities: educated and indebted

By Cate Long
September 23, 2011

Thomson Reuters Municipal Market Data muniland expert Daniel Berger reminded me of a report that I had forgotten about that shows the correlations between the low credit ratings of Ohio’s cities and the cities’ very low levels of college graduates. Dan posits that Ohio, as part of America’s Rust Belt, didn’t require high levels of education for staff at its manufacturing plants and, accordingly, didn’t develop large college-educated workforces. As manufacturing moved out of the region, it left behind cities where the workforce was not attractive to high-tech industries and other sectors that required more educated workers. The cities declined and their credit ratings suffered. Such is the devastating effect of globalization.

Thumbs down on Obama’s muni tax

By Cate Long
September 19, 2011

Thumbs down on Obama’s muni tax

Unsurprisingly, the Treasurer of California and Bloomberg’s editorial board are pushing back on the Obama administration’s proposals to reduce the municipal bond tax exemption for those earning more than $200,000 per year. I wrote previously how the Republicans are cool to the proposal. The California Treasurer says that the increased tax would raise municipal borrowing costs and estimates that over time the act could add $2.7 billion to $7.7 billion to statewide borrowing costs. Bloomberg’s editorial board goes further and suggests that any changes to municipal bond taxation should be done as part of a broader tax reform effort. From Bloomberg:

Municipal bonds are not just for rich people

By Cate Long
September 16, 2011

This Bloomberg interview with John Miller, co-head of fixed-income at Nuveen Asset Management, is a good overview of the current state of muniland although I disagree with his comment that “many, if not most municipal bond holders are in the highest tax bracket”.