Month: October 2013

Estimating Puerto Rico’s Probability of Default

In sharp contrast to prior months, this week’s FOMC meeting should be met with much less anxiety on the part of market participants. Both the equity and fixed-income markets have settled into a fairly comfortable groove. Plus … The Puerto Rico rating conundrum illustrates the difficulty of estimating default probabilities for municipal issuers. Given the SEC’s new requirements under Dodd-Frank to reduce reliance on agency ratings, the race is on among muni research firms to come up with viable alternative credit scoring systems.

Is Tax Policy to Blame for Puerto Rico’s Woes?

In the absence of real market-moving economic data, at least until the October employment number is released, the fixed-income market continued to enjoy a firm tone this week. Plus … While the market pressure on Puerto Rico may have abated for the time being, the political and regulatory backlash may just be starting.

Six Reasons to Visit the New GASB Website

Until recently, the Governmental Accounting Standards Board (GASB) website was rather intimidating to anyone without a degree in finance or accounting. That is no longer the case, thanks to an impressive “new and improved” website that offers greater functionality and...

Muni Supply Returns with a Vengeance

With the reopening of the Federal government, the flow of economic data has resumed in earnest. The first major release out this morning was the September payrolls number, originally slated for October 4th. According to the Bureau of Labor Statistics, non-farm...

Puerto Rico Makes Its Case

As expected, the dramatic events in Washington did go down to the wire on Wednesday, and we still ended up with no permanent solution. Although a default on the national debt may have been averted, our politicians’ decision to kick the can down the road yet again may...

Another “DIP” for Detroit Unsecured Bondholders

Today marks the beginning of what could turn into months of hearings regarding Detroit’s eligibility to file for bankruptcy. In the meantime, the City continues to break new legal ground by using restructuring techniques heretofore used only in the corporate arena. Plus – could Puerto Rico fall below investment grade by at least one of the rating agencies before the end of the year?

Retail Investors and the Puerto Rico Debacle

Market Outlook There’s nothing quite like ugly poll numbers to motivate politicians. Faced with unprecedented disapproval ratings from the electorate, our fearless leaders in Washington have reportedly decided to return to the negotiating table to work out at least a...

State Pension Plans: A Critical Pressure Point for Many States

What constitutes a well-managed state pension plan? Our interview with the author of a recent Morningstar report on the state of state pension systems, who discusses the wide variance in the funding levels of state pension plans, along with “best practices” observed from states with relatively strong pension plans.

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