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Posts Tagged ‘municipal finance’

I’ve Got a Bridge To Sell You

Posted by Larry Doyle on June 13th, 2011 6:00 PM |

Have you ever been in a situation in which you needed to quickly identify a vehicle?

I recall getting hit from behind by a speeding vehicle in Bridgeport as we exited from a minor league baseball game. I focused so quickly on the license plate of the car as it screamed through a red light to get away. My adrenaline rushed like a river.

Can you imagine being in a similar situation and telling one of ‘our finest’, well I did not fully get the plate but I know the guy must have liked Rick’s Plumbing or Speedy’s Car Wash? What am I talking about? Why do I raise this topic? Well, with so many states in our nation strapped for cash do not be surprised if you see states selling ads on license plates. Really? Yes sir. Check this out…  (more…)

My Thoughts on Wisconsin

Posted by Larry Doyle on March 4th, 2011 6:36 AM |

Feb. 27: Student Labor Action Coalition members demonstrate at the state Capitol in Madison, Wis., on the 13th day f protests over the governor's proposed budget. What is really going on in Wisconsin?

Are Wisconsin Governor Scott Walker and his Republican colleagues trying to ‘break the unions’?

Are the ‘Wisconsin 14′ senatorial contingent true patriots standing up for the rights of the working man?

Given the level of heated protest on the streets of Madison and on the airwaves throughout the nation, clearly people have strong opinions on both sides of this topic. What does it all mean? (more…)

Auction-Rate Securities and Municipal Market Dislocation

Posted by Larry Doyle on January 13th, 2011 9:39 PM |

[ROLLOVER]

The demise of the $330 billion auction-rate securities market may have culminated in February 2008 but the impact of that reality continues to be felt today. How so?

Large segments of the ARS market provided financing for a wide array of municipal entities. How did those municipal entities receive financing when the ARS market froze? Reports indicate that bank letters of credit (LOCs) provided ongoing financing for many municipal borrowers. Now what?

As those LOCs are rolling off, banks are extremely reluctant to roll them forward and impending default is staring many of these municipal borrowers right in the face. The capital markets are not anxious to provide liquidity and banks are equally reluctant. Thus while the Federal Reserve throws support behind many market segments, the municipal market has retraced back to levels last seen in early 2009. (more…)

State Budgets: Day of Reckoning

Posted by Larry Doyle on December 19th, 2010 9:09 PM |

For those who may have missed CBS News 60 Minutes this evening, there was a fabulous segment on the impending disasters within our municipal finance sector. This piece entitled State Budgets: Day of Reckoning runs for approximately 14 minutes and is a MUST SEE.

The problems embedded within a number of states and across hundreds–if not thousands–of local municipalities are not going away. Will Uncle Sam need to provide another trillion dollar bailout? Will ‘red states’ be asked to bail out ‘blue states’, perhaps starting with Illinois? Let’s navigate.

Larry Doyle

Please subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own and not those of Greenwich Investment Management. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Will States, such as California, File Chapter 9?

Posted by Larry Doyle on December 3rd, 2010 6:38 AM |

Are those large waves roiling the world of municipal finance–and centered on California–to be feared?

Are they an indication of an oncoming tsunami? Or are they to be discounted and taken as just another  “Hey, dude, don’t worry. Surf’s up!!”

Well, perhaps those less concerned about what is just ‘off the coast’ may care to ‘break out their boards’ but prudence dictates we take a harder look at what is causing the recent waves in the world of municipal finance. These factors include: (more…)

“States of Denial” or “Do Pensioners Have Even Greater Rights Than Bondholders?”

Posted by Larry Doyle on October 18th, 2010 6:54 AM |

Do we just need to get through the next year or two in order to regain our feet?  Really? Do not think that Fed chair Ben Bernanke is not fully aware of what lies ahead on our economic landscape as he hopes and prays for an economic revival. However, as he contemplates the perils of more quantitative easing the stranglehold of future pension obligations continues to put deflationary pressures on our economy. No surprise why Ben and most of his Fed colleagues are bound and determined to create inflation in an attempt to monetize our national debts. For greater focus on the state pension obligations, let’s review a fabulous commentary recently published by The Economist entitled, A Gold-Plated Burden,

CHUCK REED is the Democratic mayor of San Jose, California. You might expect him to be an ally of public-sector workers, a powerful lobby in the Golden State. But last month, at a hearing on pension reform held by the Little Hoover Commission, which monitors the state’s government, Mr Reed lamented his crippling public-pensions bill. “City payments for retirement benefits have tripled over the last ten years even though our workforce has declined dramatically, and we have billions of dollars in unfunded liabilities that the taxpayers must pay,” he said. (more…)

California Non-Sense on Cents

Posted by Larry Doyle on August 27th, 2010 5:07 AM |

If a picture spells a thousand words, then two graphs of the employment situation and future pension obligations in California far exceed the works of William Shakespeare.

Should we file these under the heading of “American Tragedy”? Would these works be referenced when somebody looks up “future default” or “unsustainable”? These future pension obligations did not happen by accident. The projected figures represent the plundering of California municipalities with subsequent tax burdens left to future generations. How did this happen? Let’s “read” the following “tomes” provided by the California Department of Finance and highlighted in The Wall Street Journal,

[schwarzenegger]

You might almost think you were reviewing a “Greek tragedy”.

This is no way to run a state or a country.

Larry Doyle

Related Sense on Cents Commentary
Sense on Cents/California

Please subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

New Jersey’s State Pension? Fuhgeddaboutit!!

Posted by Larry Doyle on August 19th, 2010 7:35 AM |

In a state that has a reputation for putting the ‘organized’ in ‘organized activities,’ is anybody surprised that New Jersey has been charged with misrepresenting the health of its state pensions? (The state has already settled). How do you think politicians get elected? Line the pockets of the unions with lavish pensions and perks, then stick it to future generations. This scam has been played for years. What’s new now?

The Wall Street Journal provides further details on this story in reporting, SEC Sues New Jersey as States’ Finances Stir Fears:

The Securities and Exchange Commission, in its first securities-fraud case against a state, accused New Jersey of misleading investors about the health of its two largest state pensions while selling billions of dollars in bonds.

State authorities settled the case without admitting or denying wrongdoing.

While it singled out New Jersey, the SEC is conducting several investigations into what other states disclosed about their weakened finances. (more…)

Steady Decline Through 2060?

Posted by Larry Doyle on June 28th, 2010 1:12 PM |

What type of legacy are we leaving our kids? Will we leave them so burdened with overwhelming debts and deficits so as to strangle and choke off real opportunities? While Uncle Sam is able to play charades in an ever increasing and dramatic fashion, Sam’s smaller brethren at the state and local levels do not have those capabilities.

On that note, let’s look westward. I wrote in May 2009, “As California’s Economy Goes, So Goes the Country.” Along the same line, today we read from BloombergStates of Crisis for 46 Governments Facing Greek-Style Deficits:

Californians don’t see much evidence that the worst economic contraction since the Great Depression is coming to an end. (more…)

Connecticut: Not What You Make, but What You Spend

Posted by Larry Doyle on June 7th, 2010 10:44 AM |

I missed a story the other day that is a likely precursor to many similar stories in the weeks and months ahead. What is that? Downgrades in the municipal finance markets. Which municipality, or in this case which state, is being downgraded? The wealthiest state in the nation, Connecticut.

BusinessWeek highlights this story in reporting, Connecticut Rating Cut by Fitch Ahead of Debt Sale:

Connecticut, the state with the highest tax-supported debt, had its bond rating lowered one level to AA by Fitch Ratings as it prepares to borrow money to cover a budget deficit for a second straight year. (more…)






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