Have the bond vigilantes begun to crack the whip at New York City Mayor Bill de Blasio? Capitol New York reports:
According to a report in Bloomberg News [May 21], UBS Global Asset Management and RidgeWorth Capital Management Inc. will each reduce their holdings of [New York City] debt due to concerns over the 8 percent in retroactive raises included the mayor’s proposed contract with the United Federation of Teachers, and his $8.2-billion affordable housing plan.
‘We’re concerned with what Mayor de Blasio might do in working with the unions, things like this housing project that he’s looking at with not having a full understanding of how he’s going to pay for it,’ Ebby Gerry, who works for UBS, told Bloomberg News. ‘We’re watching pretty closely.’
Public officials have been trained to monitor what credit rating agencies say, so de Blasio’s response, which brushes off sales by institutional investors of New York City debt is no surprise. Capitol New York again:
Mayor Bill de Blasio brushed off news on Wednesday that two financial management companies will reduce their holdings of city debt over concerns about his fiscal stewardship.