Comments on: Analysts: Bond Insurer Bailout Likely to Come Too Late http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html Sun, 22 Nov 2009 01:21:03 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html#comment-3513 Anonymous Wed, 30 Jan 2008 03:49:00 +0000 http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to-come-too-late/#comment-3513 Re: However, you are right that the hit to home values we are seeing is unprecedented, and therefore municipalities may face greater payment stress than before.<br/><br/>Im always interested in how property taxes will impact future muni revenues/reserves? Re: However, you are right that the hit to home values we are seeing is unprecedented, and therefore municipalities may face greater payment stress than before.

Im always interested in how property taxes will impact future muni revenues/reserves?

]]> By: Tomographer http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html#comment-3509 Tomographer Wed, 30 Jan 2008 01:37:00 +0000 http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to-come-too-late/#comment-3509 Yves,<br/><br/>Why are the ratings agencies tougher on munis than corporates? Yves,

Why are the ratings agencies tougher on munis than corporates?

]]> By: Yves Smith http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html#comment-3507 Yves Smith Tue, 29 Jan 2008 23:29:00 +0000 http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to-come-too-late/#comment-3507 The Hube,<br/><br/>I don't have the data readily at hand, but the record on municipal bond defaults, even when the real estate industry was in trouble before (the recession of 1990-1991) is remarkably good. At most, municipalities mis a payment or two. They don't default on principal.<br/><br/>Industrial revenue bonds (when a project is sponsored by a government entity and gets the tax break but the project, not the government entity itself is responsible for payment) are a different proposition, but my impression is that there are fewer of them than there were in the 1980s.<br/><br/>The other dirty secret is that the rating agencies are tougher on ratings for municipalities than corporates, despite municipalities' good payment record. The default rate on underlying single A municipal bonds is much lower than single A corporates.<br/><br/>However, you are right that the hit to home values we are seeing is unprecedented, and therefore municipalities may face greater payment stress than before. The Hube,

I don’t have the data readily at hand, but the record on municipal bond defaults, even when the real estate industry was in trouble before (the recession of 1990-1991) is remarkably good. At most, municipalities mis a payment or two. They don’t default on principal.

Industrial revenue bonds (when a project is sponsored by a government entity and gets the tax break but the project, not the government entity itself is responsible for payment) are a different proposition, but my impression is that there are fewer of them than there were in the 1980s.

The other dirty secret is that the rating agencies are tougher on ratings for municipalities than corporates, despite municipalities’ good payment record. The default rate on underlying single A municipal bonds is much lower than single A corporates.

However, you are right that the hit to home values we are seeing is unprecedented, and therefore municipalities may face greater payment stress than before.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html#comment-3506 Anonymous Tue, 29 Jan 2008 23:22:00 +0000 http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to-come-too-late/#comment-3506 What always amuses me in all of these analyses is that potential losses on the municipal bond guarantees are completely being ignored. With all of the real estate problems, it seems likely to me that their municipal losses are likely to be more than zero.<br/><br/>The Hube What always amuses me in all of these analyses is that potential losses on the municipal bond guarantees are completely being ignored. With all of the real estate problems, it seems likely to me that their municipal losses are likely to be more than zero.

The Hube

]]> By: Anonymous http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html#comment-3505 Anonymous Tue, 29 Jan 2008 21:11:00 +0000 http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to-come-too-late/#comment-3505 Please forgive intrusion, but here is link:<br/><br/>http://en.wikipedia.org/wiki/Vodka<br/><br/> The taxes on vodka became a key element of government finances in Tsarist Russia, providing at times up to 40% of state revenue.[4] By the 1860s, due to the government policy of promoting consumption of state-manufactured vodka, it became the drink of choice for many Russians. In 1863, the government monopoly on vodka production was repealed, causing prices to plummet and making vodka available even to low-income citizens. By 1911, vodka comprised 89% of all alcohol consumed in Russia. This level has fluctuated somewhat during the 20th century, but remained quite high at all times. The most recent estimates put it at 70% (2001).<br/><br/>This problem can be solved with vodka for the masses and lead to job creation act and greater freedom in pension fund obligations...win, win! Please forgive intrusion, but here is link:

http://en.wikipedia.org/wiki/Vodka

The taxes on vodka became a key element of government finances in Tsarist Russia, providing at times up to 40% of state revenue.[4] By the 1860s, due to the government policy of promoting consumption of state-manufactured vodka, it became the drink of choice for many Russians. In 1863, the government monopoly on vodka production was repealed, causing prices to plummet and making vodka available even to low-income citizens. By 1911, vodka comprised 89% of all alcohol consumed in Russia. This level has fluctuated somewhat during the 20th century, but remained quite high at all times. The most recent estimates put it at 70% (2001).

This problem can be solved with vodka for the masses and lead to job creation act and greater freedom in pension fund obligations…win, win!

]]> By: doc holiday http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to.html#comment-3503 doc holiday Tue, 29 Jan 2008 20:49:00 +0000 http://www.nakedcapitalism.com/2008/01/analysts-bond-insurer-bailout-likely-to-come-too-late/#comment-3503 What stands out for me in these stories, is the fact that writedowns continue to rise and future expectations for more writedowns continue to rise, and subprime loans are to be resetting as foreclosures rise and within this possible multi-trillion bombardment of systemic collusion, we continue to read about how the financial community will raise capital to bail out the thousands of failed investments related to the assumed losses of trillions of dollars.<br/><br/>Massive writedowns on the left hand while the right hand is raising capital....hmmm?<br/><br/>So, where exactly is that new seed money for the next casino bets coming from? That is the issue, if Im not mistaken, i.e, these failing companies need more cash right? We know there are foreign entities that are being formed to scoop up some debt, but there are limitations.<br/><br/>Is it a reality that these bank wolves -- that need so much capital can actually pull the wool over all the sheep heads and blend in as if they just didnt blow a few trillion?<br/><br/>More vodka, let them drink until they die; thats the new American Dream! What stands out for me in these stories, is the fact that writedowns continue to rise and future expectations for more writedowns continue to rise, and subprime loans are to be resetting as foreclosures rise and within this possible multi-trillion bombardment of systemic collusion, we continue to read about how the financial community will raise capital to bail out the thousands of failed investments related to the assumed losses of trillions of dollars.

Massive writedowns on the left hand while the right hand is raising capital….hmmm?

So, where exactly is that new seed money for the next casino bets coming from? That is the issue, if Im not mistaken, i.e, these failing companies need more cash right? We know there are foreign entities that are being formed to scoop up some debt, but there are limitations.

Is it a reality that these bank wolves — that need so much capital can actually pull the wool over all the sheep heads and blend in as if they just didnt blow a few trillion?

More vodka, let them drink until they die; thats the new American Dream!

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