Municipal Bond Market

lmrhoades · Senior Poster Joined: 17 Jan 2008 Posts: 112

Henry and others
Is there a big problem with the muni bond market. On cnbc this morning they were talking about it as if it could lose big money. I know bill gross is investing big into the muni bond market and it's done well this year thus far.
Is there a problem that you know of or is it just continued speculation?
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rffrydr · Posted: Sun Aug 03, 2008 9:08 pm Post subject:

A 98% dropoff in NY bank remittances:

http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=11848977
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texfly101 · Senior Poster Joined: 22 Oct 2007 Posts: 118

I was just catching up on some forum reading and was struck by both the Economist article on suburbia and the article on CA state funding problems posted by rffrydr...great articles and very indicative of the sort of problems that our government infrastructure planners and financial planners faced in the past and more importantly, in the all too near future.

As a development engineer and planner for over 30 years and having been one of the people responsible for the growth in the Central Florida boom of the last quarter century when the giant rat took over a sleepy agricultural area of less than 100k people, I have had a front row seat on what takes place in such areas. I am still amazed at the lack of control over such sprawling growth that basically is at the hands of entrepreneurs who are in it to make a buck and view growth laws as a hindrance, not a planning tool for proper development. Now that is not specifically a bad thing, its just that its done with no real mandate on future services and operations other than some city, county, and state departments that are still at the political whims of the controlling government. Hence you get both the article on suburbia and on CA financing woes. It is a very complex process and balancing act. The political entities that try to control it are tasked with an enormous look forward to what is best.

I know I have been both the object of bribes and scorn and criticism for holding my standards of ethical behavior that my PE license says that I will do. These enormous amounts of money makes it a very tempting subject of both corruption and planning mistakes. It always seems so amazing to me that the planners are so subject to the political whims of government who are the subject of enormous pressures from short term sentiments to stay elected. Oh well, its worked for over 200 years somehow, and I see no better form of it anywhere else. I am definitely not against it, rather I am just all too aware of both the needs and the inadequacies to provide for growth that is able to be economically provided for and maintained sufficiently.

What I am trying to say here is that the planning process is in actuality deficient in its ability to project future needs and provide for funding of infrastructure maintenance and improvements. They have no true control over the future development and economic realities. It is always a big deal when funding is deemed insufficient or too expensive...but its easy to see it in hindsight when we put in place the seeds of future woes with inadequate planning and make it at the whims of developers who have no long range objectives or needs. 10 years is the longest view that a developer takes, usually, its 2 to 5. And that's almost always with someone else's money.

I don't really know what to say other that its endemic to our development process, we have no long term history like what European cities deal with, and imo, no true controls on development other than the ability to lend and buy. Our suburban sprawl had become the norm, the car is both a necessity and fact of life so that owning one is part of the maturation process of American youth. Maybe the housing industry bubble bursting and the related credit turmoil will be a blessing in disguise making regualtion of the industry a defacto curb on unrestrained growth. I am not an anti-growth person like in OR, but I am a person who thinks growth should be regulated to provide for long term management of the needed infrastructure. I ride the bus as much for not having to drive in I-5 traffic here in Seattle as much as I do for the price of gas. Traffic is what drove me out of the development game, we passed the tipping point long ago in managing it and will probably never catch up except for a major economic catastrophe causing the abandoning the personal car as too expensive fro a variety of viewpoints.

Our economy is built on easy access to a vehicle. While I commute almost 2 hours to work via the bus, my kids will not even conceive of doing the same. I look at the time spent as reading time and as a $500 a month raise. They think of me as being eccentric and won't let the rising cost of gas affect their driving. When it comes time to provide for themselves, I'm sure that it will come clear then, but the die will be cast and they won't be able to do anything other than suck it up and try to make ends meet while working and making a home. I'm glad I won't be in that manner, being retired by that time and not having to do anything other than work in the yard and make the mortgage payment on time...that is as long as SS, my pension, and the interest on my investments holds as planned. And that has become more insecure as the articles point out so well...The growth planners and I might still have a lot in common, the inability to truly plan for and fund the future...dj
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rffrydr · Posted: Mon Jun 30, 2008 7:15 am Post subject:

A model for the March retest, credit vs. economy theory. Still don't want this stuff:

http://www.bloomberg.com/apps/news?pid=20601109&sid=ascMK9stYqCQ&refer=home
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rffrydr · Posted: Mon Jun 02, 2008 12:48 pm Post subject:

The Suburb transformed--if only the tax base holds:

http://www.economist.com/displaystory.cfm?story_id=11449846
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mildred · Newbie Joined: 22 Jan 2008 Posts: 15 Location: New Jersey

When the parent acts irrationally it usually filters down to the siblings.

http://news.yahoo.com/s/ap/20080514/ap_on_re_us/california_budget_1

rffrydr · Posted: Sat May 10, 2008 9:40 pm Post subject:

...and getting sicker:

http://us.ft.com/ftgateway/superpage.ft?news_id=fto050720081856352889&page=2
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rffrydr · Posted: Sun Apr 20, 2008 5:16 am Post subject:

Looks like full recovery for a still sick patient:

http://finance.google.com/finance?q=AMEX%3ATFI

The Eaton Vance with it holdings in Puerto Rico and such perhaps more telling as it's just recovered 2004 equilibrium. Never really makes sense to short outright but the futures spread might be interesting if the contract were still alive. Check out the last price tic:

http://futures.tradingcharts.com/chart/MB/M

If only they knew:

http://query.nytimes.com/gst/fullpage.html?res=980CEED8163BF932A35756C0A963948260
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rffrydr · Posted: Sun Apr 20, 2008 4:52 am Post subject:

And driving to your Orange County school you'll leave more behind than just your kids. This "market" does what markets do best, allocate resources...AKA class division:

http://www.latimes.com/news/local/la-me-foundations20apr20,0,3435639.story
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rffrydr · Posted: Sat Apr 19, 2008 10:12 pm Post subject:

22 states face deficit in 09 of 9%--including the big ones. Commodity states, conversely doing better than okay. Debate all about China and FED, don't forget the states.

http://media.bloomberg.com/bb/avfile/Economics/On_Economy/v0bcMHTnJwxQ.mp3
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rffrydr · Posted: Thu Mar 13, 2008 7:47 am Post subject:

Two decades of insurance tie-ins disappearing. Still seen as temporary:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEnXTNZouCd8&refer=home
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rffrydr · Posted: Wed Mar 12, 2008 8:27 am Post subject:

Munis were apathethic yesterday. Maybe not a sell but IMHM not a buy. WLP noted that California has scheduled a Medi-Cal premium reduction of 10% effective July 1, 2008. WLP said it might not be able to pass through the reduction fully to providers.

HMOs saw nothing from yesterday.
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mildred · Newbie Joined: 22 Jan 2008 Posts: 15 Location: New Jersey

I guess I should have been more specific ..... my bad. The gov't does put out information on gov't finance for all to see. In this respect they are very transparent.

My concern lies in the accuracy of gov'ts future projections of the cost of healthcare and pension obligations. I'll go as far and say I question their actuarial models. I think they're hiding huge forward costs and this is why I say they are being opaque.

I realize I may be wrong and everything could well be on the up and up, but with ever increasing gov't payrolls, longer life spans and spiraling healthcare costs something makes me not want to invest in munis @ 3 - 4 % . And I'm talking general obligation munis (the safest ones).

I'm happy to be in taxable CD's at reputable, safe, conservative banks earning 4.5% right now. Sounds stupid but it makes me sleep better.

HenryTo · Posted: Sat Mar 08, 2008 11:59 pm Post subject:

Chestnuts,

Appreciate the history lesson! Very Happy

rffrydr,

Appreciate it from your perspective! Cool

Have a great weekend, folks.

Henry

rffrydr · Posted: Sat Mar 08, 2008 9:17 pm Post subject:

I tried that. Ended up going to the library.
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chestnutstime · Senior Poster Joined: 24 Oct 2007 Posts: 89