Talk about a volatile year. It’s hard to believe that, less than three months ago, the incipient US recovery was pronounced doomed by the dysfunctional political process in Washington D.C. Against the backdrop of a Federal government shutdown and a looming political...
Month: December 2013
The Fed Tapers and Munis Waver
And so it begins. Taking a cue from the financial markets’ calmer behavior in recent weeks, the Federal Reserve Open Market Committee (FOMC) ended months of speculation by announcing it will start to reduce its bond purchase program to $75 billion from $85 billion a...
Don’t Look Now, but the Muni Industry Is Changing
Over the past year, we’ve been fortunate enough to have interacted with an astonishing array of tech entrepreneurs and market veterans, many with pioneering visions on how to improve the municipal bond market. The good news: change is coming to the tax-exempt sector. Why now? In our view, the potential catalysts for change include: (1) the end of the great bull market in bonds; (2) the new regulatory environment under Dodd-Frank; and (3) advances in information and trading technology.
The Divergent Fortunes of Illinois and Puerto Rico
It’s Friday the 13th and not too many bond investors are feeling lucky this morning. Except for an always unpredictable weekly jobless claims number, most of the recent economic data has come in stronger than expected. November retail sales rose 0.7%, following a 0.6%...
As Airlines Merge, Public Airports Stand to Gain – Or Lose
How do mergers among commercial airlines impact public airports - and their credit quality? As US Airways and American Airlines officially tie the knot in a merger that will result in the “New American,” how the combined airline organizes its route network carries...
Global Demographics Point to “American Century”
Investors are taking a second look at the United States. Because compared to former international favorites like Japan, China, and Europe, the U.S. is posting strong population growth. This increase is the result of both a higher birth rate as well as a remarkable immigration trend. The productivity that investors had already noticed about the American economy is now being matched by consistent long-term internal demand.
Year-End Muni Supply Surges as Volcker Rule Takes Effect
“A long, long time ago I can still remember how “prop trading” used to make me smile And I knew if I had my chance That I could make those clients pay And maybe I’d be happy for a while” With all due apologies to Don McLean, today may soon be known as “the day the...
A Watershed Week in Munis
Market Outlook This morning’s stronger-than-expected payrolls number for November (203,000 versus the Street consensus of 185,000, with the jobless rate dipping to 7.0%) capped a week of generally positive economic data. The average work week rose to 34.5 hours and...
All Eyes on Illinois and Detroit
Market Outlook Fixed-income investors returned from the holiday week with a rather defensive mindset. Although “Black Thursday/Friday” sales have been middling at best, most other economic indicators have shown surprising strength. Domestic car sales, for one, are...