Both corporate and public pensions remain short of having enough money to pay out what they've promised, despite recent asset increases.» Read More
Brokers' Bad Behavior Slow to be Reported [DealBook]
Shocker: Banks Like Rich People [CNBC.com via NYTimes]
Bond fund managers who are optimistic about the muni market tend to offer up statistics that seem to show the relative health—at least in the short term—of city and state governments.
Unfortunately, the relevance of these numbers depends on assumption about the behavior of states and cities that is unwarranted.
Here’s what the assumption is: muni issuers will tend to behave like corporate borrowers.
We already know this is wrong. As the following chart from Wells Fargo shows, munis have historically defaulted at a much lower level than corporates.
What do the words on the memorial at Dachau—NEVER AGAIN—mean if they don't apply to Libya?
Al Jazeera reports that the massive damage done to the bodies of the dead in Libya—bodies torn limb from limb—supports the allegation that "the military haven't only been using gunfire, but artillery as well."
In response to the chaos on the ground in his nation, Muammar Gaddafi delivered a 'rambling' address today — in which he blames colonial influence, hallucinogenic drugs, and satellite television for the uprising.
The unrest in Libya sparked the 9 percent spike in black gold today and the unrest is spreading. $100 oil is nothing new to the energy markets but the fact that the turmoil contaigon has picked up steam, just how high can oil go? I decided to speak with David Wyss, Chief Economist at Standard & Poor's.
Our world does not lack for self-styled experts—people who claim to have experience, knowledge or systems that allows them to understand and forecast better than ordinary people. But, especially when it comes to municipal bonds, it is clear that our world has an inadequate amount of expertise—actual ability to understand or forecast—to justify these claims
The fallibility of experts probably won’t be news to many people. But it is amazing how persistently deference to experts is demanded and granted.
The strongest case for investing in municipal bonds turns on claims of expertise. Unfortunately, there’s little reason to be confident in these claims and strong reasons to be skeptical.
Marketers of bond funds like to promise that their “proprietary portfolio management system and the portfolio manager’s 20-plus years of experience” will give investors an edge, despite the recent rise in risk for muni bonds.
Unfortunately, these claims are undermined by the historical strength of the muni market. No one has lived through a muni market like the one we have entered, which means that “20-plus years of experience” may be largely irrelevant.
The words debt and crisis have become terribly associated with each other over the last few years. We have had a mortgage debt crisis, a sovereign debt crisis and now a lively debate over the likelihood of a municipal debt crisis.
Everyone agrees that the muni debt is undergoing a serious and perhaps permanent change. Muni debt was once viewed as almost risk free. Now even those who advocate investing in muni debt acknowledge the “very real credit risks in the municipal space,” as Pimco put it in their most recent note on munis.
Does Mervyn King, the Governor of the Bank of England, want a return to a Bretton Woods style fixed rate regime?
Frankly, it's difficult to thread through the econo-speak of King's latest white paper; nonetheless, Tracy Alloway makes a noble attempt for the Financial Times Alphaville blog .
King's paper is ominously entitled 'Global imbalances: the perspective of the Bank of England'. \(A one paragraph summary on the title page contains this gem of bureau-speak: "The main lesson from the crisis is the need to find better ways of ensuring the right collective outcome." — which seems to suggest 'stuff got really bad, so we all need to do things differently next time'.\)
The madness in Libya has escalated beyond the level seen in Egypt—even during its darkest hours, just prior to the fall of the Mubarak regime.
Recent counts of the dead in Egypt put the death toll from the uprising at well over 300 .
Video of plain clothes police officers in Tahrir Square, clubbing demonstrators while mounted on horseback or riding camels, remain the indelible images of the regime's brutality — proof that Mubarak had little reservation about sending in goons to bust skulls when his regime was teetering on the brink of collapse.