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?

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?

Quis custodiet ipsos custodes?

By Cate Long
July 5, 2011

Quis custodiet ipsos custodes? Or “who watches the watchmen?” Credit-rating agencies are the main watchmen of the financial system.  But can we judge their performance, or are they just black holes filled with “opinions?”

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:

The declining welfare rolls

By Cate Long
June 24, 2011

The ever-shrinking welfare rolls

Stateline has done some very good reporting on the decline of the welfare rolls. Welfare funding was switched to block grants in 1996, and the funding level has remained the same since then. From Stateline:

Standardizing AAA

By Cate Long
June 22, 2011

For many years, a AA-rated municipal bond did not have the same risk of default as a AA-rated corporate bond. In fact, the corporate bond was about 6 times more likely to default.

Muni sweeps: California’s first budget veto

By Cate Long
June 17, 2011

Some thorny action in California on the state budget:

California Governor Jerry Brown, who failed to win Republican support of tax extensions in six months of negotiations, said he’d “move heaven and earth” in another attempt after vetoing a budget without the provision.

Wall Street drives a truck through mile-wide hole in the rules

By Cate Long
May 23, 2011

The Wall Street Journal and my fellow Reuters blogger Felix Salmon have both addressed the issue of the Bank of New York Mellon giving off-market or false prices on foreign-exchange trades to one of their clients, namely California pension fund Calpers.

Muni sweeps: ‘How-to’ primer for bid-rigging

By Cate Long
May 5, 2011

UBS finally comes to the table

In November, 2009 the Wall Street Journal reported that Swiss bank UBS was in talks to settle with the SEC on their role into the three year investigation in municipal bid rigging.