For low interest municipal (and state) bonds anyway. I've posted nearly ad nauseam on the relationship of municipal and state bond debt and the 800 lb. gorilla of underfunded pension liabilities. (Go here and here for my recent rants.) Yet along with many others I had to admit that notwithstanding apparent borrower insolvency, cities and states were still able to borrow at very low interest rates.
No more. Read this article from the NYT DealB%k about the ongoing "rout" in the government securities market. In short, "States and cities across the nation are starting to learn what Wall Street already knows: the days of easy money are coming to an end."
The bond markets generally are in a royal roil thanks to the Fed's murmurings about cutting back on its so-called quantitative easing and this has carried over to municipal and state debt securities. Combined with Detroit's implicit threat to file for Chapter 9 bankruptcy, more and more information about underfunded government pensions, and the never-ending problems of Europe, it's about time that the markets took note. That they waited so long should count against those who have blind faith in the rationality of markets.
All of this suggests to me (and it's all about me, isn't it?) that I need to redouble my efforts on this summer's research project that addressed the battle between CalPERS and bondholders in the bankruptcy of Stockton, California.
No more. Read this article from the NYT DealB%k about the ongoing "rout" in the government securities market. In short, "States and cities across the nation are starting to learn what Wall Street already knows: the days of easy money are coming to an end."
The bond markets generally are in a royal roil thanks to the Fed's murmurings about cutting back on its so-called quantitative easing and this has carried over to municipal and state debt securities. Combined with Detroit's implicit threat to file for Chapter 9 bankruptcy, more and more information about underfunded government pensions, and the never-ending problems of Europe, it's about time that the markets took note. That they waited so long should count against those who have blind faith in the rationality of markets.
All of this suggests to me (and it's all about me, isn't it?) that I need to redouble my efforts on this summer's research project that addressed the battle between CalPERS and bondholders in the bankruptcy of Stockton, California.
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