municipal bonds

  • I feel like he'd be a decent swap unwind negotiator.


    Detroit And Its Banks Both Would Prefer To Forget All About Those Interest Rate Swaps

    Here’s a Bloomberg article about how banks made money by doing interest rate swaps with Detroit, and now Detroit is sad, because like a lot of municipalities Detroit swapped its floating rate bonds to fixed to hedge the risk of rates going up, and rates went down, and now the PV of Detroit’s swap liabilities […]

    / Mar 14, 2013 at 12:03 PM


    The City Of Baltimore Didn’t Need To Subsidize Your Mortgage Through Libor

    We talked the other day about municipalities and the Libor shenanigans. Quick recap: 1) Municipalities wanted long-term fixed-rate debt. 2) They got it indirectly by selling long-term floating-rate debt and buying interest rate swaps from banks. 3) At first, this was cheaper than issuing fixed-rate debt.* 4) Later, though, sometimes it turned out to be […]

    / Jul 13, 2012 at 6:11 PM
  • News

    Libor Manipulating Banks Used Baltimore’s Tax Dollars To Help Pay Off Your Mortgage, Or Something

    There is a line forming to the left for people to beat up on Libor-manipulating banks, and it’s a long line so your beating time is limited and you have to make the most of it if you want anyone to care. Today’s the day for U.S. municipal borrowers. How’d they do? The municipalities are […]

    / Jul 11, 2012 at 6:31 PM
  • News

    Charlie Gasparino Wants Meredith Whitney To Open Her Books

    As you may have heard, Meredith Whitney has lately been saying that we’re going to be looking at the scariest environment imaginable when as many as 50 to 100 cities and other municipal issuers will supposedly default on their debt this year. Charlie Gasparino, however, is suspect. No one he knows has seen a copy […]

    / Jan 18, 2011 at 10:15 AM
  • News

    Auction Rate Securities, the Muni Rally and Smith Barney’s Best Day Ever

    The crisis in the auction rate securities market continued this week. While some issuers are preparing to refinance auction rate securities that have the highest interest rates, the suddenly turbulent market for muni bonds may leave many investors stuck in their illiquid positions. “About 61 percent of auctions failed to attract enough bidders yesterday, in […]

    / Mar 7, 2008 at 11:31 AM
  • News

    The Municipal Bond Ratings Debate Hits The New York Times

    The municipal bond ratings debate made the front page of the New York Times this morning, no doubt giving succor to fans of the Eisinger Thesis and its correlative, the Radically Inefficient Markets Hypothesis. By way of background, in the last issue of Portfolio senior writer Jesse Eisinger argued that ratings agencies were being burdened […]

    / Mar 3, 2008 at 10:50 AM
  • News

    Is There A Market Demand For Relative Muni Bond Ratings?

    Felix Salmon is skeptical that there is a market demand for bond ratings the differentiate between various issuers. His skepticism, however, is built on a simplistic image of who invests in bonds. To Salmon, it seems that muni bond investors are mostly old ladies in tennis shoes who buy bonds when they aren’t protesting water […]

    / Feb 28, 2008 at 9:09 AM
  • Bond Insurers

    On Munis, Ratings And Contrarianism

    We get called contrarian often enough that we’re nearly resigned to the label. From our perspective, of course, we’re not contrarians at all. We’re so deficient when it comes to having a decent respect for the opinions of mankind that we aren’t even aware of the prevalence or rarity of the positions we take. If […]

    / Feb 27, 2008 at 1:48 PM
  • Bond Insurers

    Is Muni Bond Insurance A Racket?
    The Portfolio Gang Responds!

    Although it looks like MBIA is now out of the woods, rival bond insurer Ambac’s fate is still murky. Reports indicate that the ratings agencies are now considering the rescue plan worked out by banks and state insurance regulators. The plan may be revealed as early as this week, and will probably involve splitting Ambac […]

    / Feb 26, 2008 at 5:31 PM
  • Bond Insurers

    How To Think About Municipal Bond Ratings
    And Why The Critics Of Muni Bond Insurance Are Wrong

    The bond insurers have all rocketed today on the expectation that a bailout from the banks will be announced any time now. But this has hardly tempered the words of their critics. Everyone from Bill Ackman to Warren Buffett has criticized bond insurers for guaranteeing complex derivatives whose underlying risk they seem not to have […]

    / Feb 25, 2008 at 4:46 PM

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