Pennsylvania capital gets state aid to avert bond default

September 13, 2010 by · Leave a Comment
Filed under: Credit News 

We have an interesting fight on our hands in Harrisburg.  The current Governor Ed Rendell is putting pressure on the city and its council to make some drastic changes to avoid default and possible bankruptcy.  It looks like PA has a act on its books called “Act 47” where the state can appoint and administrator and take control of local decision making to avoid financial turmoil.

The City Council feels that the Governor is using this to put pressure on them to sell city assets and raise taxes for covering their current shortfall.   The argument is that the council thinks they are making the best decision for the city and the state should not interfere with that.  The state has a strong argument as well being that if they default, that might bleed over and effect the state’s credit rating.  My bet is that the state will when out and Harrisburg will crave in to the austerity demands.

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Bankers from BofA, JPMorgan and UBS named as suspected conspirators in bid-fixing case

March 26, 2010 by · Leave a Comment
Filed under: Legal News 

Good to see more investigations into our financial system.  We need much more to get the players to realize that they do not have a license to break and bend the law in pursuit of profits.  They are already in a inherently profitable industry and these actions are actually harmful to the economy due to the increase financial transaction costs.

Reuters – The list, made public this week in Manhattan federal court in a criminal case, said the 29 bankers included employees of Bank of America, JPMorgan Chase, Lehman Brothers, UBS, Wachovia Bank and Societe General.

None of the individuals or institutions on the list has been criminally charged. The papers were filed by lawyers defending a former employee of CDR Financial Products Inc, also known as Rubin/Chambers, Dunhill Insurance Service Inc.

Executives of CDR were indicted in October on charges of participating in bid-rigging and fraud.

S0urce:  Reuters

Bankruptcy Bloodbath May Hit Municipal Bond Owners Next

February 10, 2010 by · Leave a Comment
Filed under: Stock Market News 

This is one of the great questions, will the U.S. federal government let the states default or will they bail them out?  Investors are betting they will be made whole if the states default and if they aren’t, we will see a major backlash especially after the bailout of Fannie Mae and Freddie Mac.  It will be interesting to see who is right in the end.

Public officials shouldn’t think about filing for Chapter 9 municipal bankruptcy to solve mounting labor costs and pension liabilities.  Even talking about this action will invite an inquiry from Fitch Ratings, the company said in a report published Jan. 27.

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Goldman Sachs urged shorting against Muni bonds it sold to clients

November 11, 2008 by · Leave a Comment
Filed under: Stock Market News 

Well at the time the Californian Municipal bonds most likely looked good in a market that was thought to continue to go up forever.  Now that reality and common sense has set in, they are giving good investing advice.  In capitalism these type of things happen in the battle of greed vs. fear.  When I read this I just chuckled for a bit, everyone needs a little entertainment during all this doom and gloom (which is warranted).


Goldman Sachs Group Inc, which acted for the state of California in selling bonds, has urged some of its big clients to place investment bets against some of those bonds this year, the Los Angeles Times reported.

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