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"Fundamentals are horrifying: unfunded pension liability [is] growing from $7 trillion this year to $11 trillion next year to $15 trillion in two years. Health care costs going up at 9 percent a year, inability to raise taxes ... headline risk is predominant," Albrycht said. "You need to have aggressive reform, like we are seeing in New Jersey. You need to have governments dealing with the situation, like we're seeing in Wisconsin and Illinois," he added. If over the next 24 months there is not pension reform, the munis are in trouble, Albrycht went on to say. "13 states right...

Doug Kass: Investors Ignoring Enormity of Brewing Crisis Published: Friday, 18 Feb 2011 | 6:15 PM ET By: Lee Brodie Producer With Wisconsin in the throws of a budget crisis and more pros predicting multi-billion bond defaults, is a serious crisis coming? Strategic investor and CNBC contributor Doug Kass sure thinks so. And the founder and president of Seabreeze Partners says you’re probably underestimating the enormity of the problem. As a topic, we know municipal bonds is enough to make you glaze over – but Kass isn’t talking about yields or hard to understand finance. He simply believes the financial...

Budget shortfalls and subsequent muni bond defaults "could derail the recovery, cost a million public employees their jobs and require another big bailout package that no one in Washington wants to talk about," ... Gov. Christie does an excellent job of framing this discussion by pointing out the huge disconnect between the benefits of public sector employees vs. their private-sector counterparts. "I think the general public thinks, 'I can't believe anybody gets a pension anymore. I've got a 401(k). It got killed in the stock market. I don't know what I'm gonna do for my retirement. I can't believe people...

Steven Malanga The Muni-Bond Debt Bomb . . . and how to dismantle it The minor-league baseball Grizzlies, lured to Fresno with a taxpayer-financed stadium, have threatened to leave. In the early 1970s, New Jersey officials decided to build a sports facility in the Meadowlands, the state’s wetlands just outside New York City. To help pay for it, they formed the New Jersey Sports and Exposition Authority (NJSEA), a quasi-governmental agency with the power to issue debt. The authority floated $302 million in bonds, used the proceeds from the bond sale to construct Giants Stadium and a Meadowlands racetrack, and...

June 14, 2010, 3:44 p.m. EDT Credit spreads jump as investors seek safety May's market turmoil blows out spreads of high-yield and investment-grade debt By April H. Lee, MarketWatch NEW YORK (MarketWatch) -- Spreads between high-yield and investment-grade debt hit six-month highs last week as money fled to the safe haven of Treasury bonds -- just as it seemed investors were growing comfortable with riskier debt. Ianthe Jeanne Dugan suggests there are warning signs in the $2.8 trillion municipal-bond market, as numerous municipalities continue to struggle financially, but investors are not paying heed.

California debt binge shakes up muni bond market November 10, 2009 | 8:48 pm The municipal bond market’s message to California: Enough with the borrowing already! Over the last seven weeks the state has sold more than $21 billion of short- and long-term debt for budget-related reasons and to finance voter-approved infrastructure projects. That flood -- in a period when muni bond yields nationwide already were rebounding after diving in summer -- has helped to boost yields more than they might otherwise have risen, some analysts assert. "Yields are higher because California has so much paper in the market," said...

Barney Frank Wants Government To Enter Municipal Bond Insurance Business Some people never learn. Representative Barney Frank of Massachusetts is one of them. One might hope that Frank would have learned something from the Fannie Mae and AIG debacles. Sadly that hope is misguided. Barney Frank now wants the government to enter the municipal bond business. Please consider Cities Ask Treasury for $5 Billion to Fund Public Bond Insurer.

Muni-bond funds face record losses Some funds down more than 30%, opening door for bargain hunters By Sam Mamudi, MarketWatch Last update: 3:32 p.m. EST Dec. 5, 2008 NEW YORK (MarketWatch) -- Investors who think municipal bond funds are a safe bet in troubled times may be in for a shock this year, with some muni funds seeing losses of more than 30%. With the stock market down more than 40% and Treasury bond yields at 50-year lows, municipal bonds can seem an attractive option. And while some managers see once-in-a-lifetime bargains in the muni market, several funds have cratered....

Congress Examines Municipal Bond Ratings, Bond Insurance Industry The fast-spreading U.S. mortgage crisis prompted lawmakers Wednesday to explore problems with municipal bonds, painting a bleak outlook for bond insurers that one official said imposes a "secret Wall Street tax" on state and local taxpayers. Connecticut Attorney General Richard Blumenthal is investigating how credit rating agencies grade the risk of municipal bonds and said the existing system is "quite possibly illegal." He joined other state officials in calling for changes at a House committee hearing. Billions of dollars could be saved by city and state governments if credit raters adopted a...