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Zagat's Muni Bond Ratings

The prospects of a Municipal Meltdown are on nearly everyone's list of potential nightmare scenarios for 2011, but whose opinions can we trust?

Since we've already learned (the hard way) that the professional ratings agencies are hopeless, how about a different approach to municipal credit insights? What if we turned to Zagat for a state-by state outlook? Can't be much worse than the non-anticipatory, bought-and-paid-for research we're relying on now...

Here's how those Zagat-style muni bond reviews might look...

New York — Regulars used to snipe that a downsized Wall Street would mean "a less reliable stream of dishes coming out of the kitchen". Little did they know that the finance sector would be back to peak profits so soon. New York features "a very diverse menu" of geographies but "skip the Nassau County special" — it comes "garnished with the second-highest property taxes in the US" served on "a looming $350 million budget gap".

Pennsylvania — This Northeastern "old standby" features "a resurgent menu of steaks and chops" from the once-moribund steel producing region. "Reservations have been easier to come by" ever since critics downgraded the capital Harrisburgen tree. Fans note that the Harrisburg fiasco was "a rare miss" by the kitchen, that the state's rating should not be "on a par with lesser eateries like Nevada".

California — "Location, location, location" say the critics, the cuisine of the northern counties and cities is "lighter and healthier" than the "heavily seasoned and overripe" So-Cal fare. Geography aside, appetizers like the "bankrupt Vallejo Skewers" may be an indication of what the rest of the meal has in store. As for the restaurant's now-infamous General Obligation tasting menu, it's strictly "Caveat Epulor". "Bring the whole family" for IOU Tuesdays.

Illinois — "Massive unfunded spending" on decor and diner subsidies have combined to make this Midwestern bar & grill the "shakiest joint in town". With a chance of default "somewhere in the neighborhood of 20%" according to some, even the locals are staying away. The potential for disaster in this dining room is "enough to make you order in from elsewhere", even if the taxation is less favorable.

Michigan — A "neighborhood eyesore" with a wait-staff that's been "milling around aimlessly" for what "seems like decades". New chef/manager Governor Rick Snyder hails from a CPA/venture capitalist/computer executive background and is offering some "insanely generous incentives" to fill the seats in this perennially "bombed-out dive". While Michigan hopes to "bring in a business lunch crowd", the place remains "a ghost-town" as long-disappointed patrons take a wait-and-see approach to the "umpteenth menu overhaul".

Nevada — This once-booming "poisoned oasis" in the desert has become something of a hit-or-miss affair of late. While gaming is "still packing them in from out of town", the once-glitzy atmosphere has become one of "deep discounting and desperation". The buffet is still "the main draw" here although the service-oriented staff has become so "frustratingly unemployed" that they almost elected "a complete and utter lunatic" to the Senate during the midterms.

Read more from Brown on his blog The Reformed Broker

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