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iShares S&P National Municipal Bond Fund ETF

5/24/2013, 2:40 PM ET

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Friday, September 28, 2012, 11:25 AM Municipals remain a good bet, writes Cumberland's John Mousseau, as overall credit quality is improving (despite some high-profile Chapter 9 filings). There's also supply constraint as muni bond issuance may seem high, but a good chunk of the proceeds are being used to call older paper, making net issuance quite small. Comment! [U.S. Economy]
Tuesday, September 25, 2012, 9:23 AM The thirst for yield helps California pull off a successful bond auction, with the size of the sale increased from $1.55B to about $1.75B. The 30-year paper in the deal was priced to yield 3.72%, the lowest in state history. 2 Comments [U.S. Economy]
Sunday, September 23, 2012, 4:43 AM Despite reducing pension benefits for their public-sector retirees and compelling workers to make bigger contributions, states have cut just $100B of the $900B funding crater in their pension plans, the WSJ reports. One problem is that assumed investment returns have been reduced because of market volatility, while another is that many states are introducing the changes for new hires only. 14 Comments [U.S. Economy]
Thursday, September 20, 2012, 5:31 AM Atwater is the latest Californian city facing bankruptcy protection after racking up a deficit of over $3M. Council members held a meeting last night to discuss declaring a fiscal emergency, which would allow Atwater to file for Chapter 9. The city of over 28,000 residents says its revenue and general fund have been "critically reduced" because of the weak economy. 3 Comments [Global & FX, U.S. Economy]
Wednesday, September 19, 2012, 12:53 PM California has no mechanism to provide support for distressed cities, says Fitch in a report reviewing credit in the state. With most of high and rising compensation costs going to those no longer working, Fitch doubts cities can grow their way out of structural imbalances. "Recent BK filings ... raise the question of weather stressed municipalities' historically strong willingness to pay is eroding." 3 Comments [U.S. Economy]
Wednesday, August 29, 2012, 12:44 PM Illinois' GO bonds are cut to A from A+ by S&P, which also maintains its negative outlook. "The downgrade reflects the state's weak pension funding levels and lack of action on reforms ... (It) also reflects continued financial weakness despite significant measures ... to improve structural budget performance." 11 Comments [U.S. Economy]
Tuesday, August 28, 2012, 5:20 PM Berkshire Hathaway's (BRK.A) recent unloading of billions in exposure to the municipal market is likely not a sector call, according to Citi's George Friedlander. Chances are Berkshire's counterparty in the CDS transaction (Lehman's DIP vehicle) wanted out and offered a good price to unwind the illiquid position. Berkshire retains $8B in exposure to muni bonds and is likely to look for spots to increase its footprint. Comment! [Financials, U.S. Economy]
Tuesday, August 21, 2012, 3:04 AM Does Warren Buffett agree with Meredith Whitney about the prospect of municipal defaults, even if her timing was somewhat off? Some investors reckon that Berkshire Hathaway's (BRK.A) recent termination of CDSs that insure $8.25B of debt for 14 states is an indication of Buffett's doubts about the state of municipal finances. The move comes as money floods into muni bonds. 4 Comments [U.S. Economy]
Saturday, August 18, 2012, 8:20 AM Despite recent un-volatility, there are lots of stresses in the market - yet no shortage of recommendations where you can put your money now, from high-yield bonds ("you're kind of in the sweet spot") to munis, cyclicals, emerging markets and more. 3 Comments [Quick Ideas]
Friday, August 17, 2012, 12:23 PM "The risk of default on municipal bonds in California is rising," says Moody's MD Robert Burtter, lead author of a detailed look into city finances there. "Across-the-board rating revisions are possible ... in the next month of two." "Bankruptcy as a tool to extract bondholder concessions as part of a budgetary solution is a significant new risk for bondholders," says another report author. 20 Comments [U.S. Economy]
Wednesday, August 15, 2012, 11:20 AM Muncipal defaults occur far more frequently than you think, according to the FRBNY, which looked at the whole universe of muni debt, not just rated issues. Of course, unrated bonds tend to be of lower quality and one would expect more defaults. The difference now: weakness in the bond insurers means both rated and unrated defaults are more likely to bring losses to investors. Comment! [U.S. Economy]
Tuesday, August 14, 2012, 6:59 AM Bank of America has unloaded most of the $225.7M worth of defaulted Jefferson County, Alabama bonds it holds and dropped out of a court case appealing the county's bankruptcy. Left fighting the case are other creditors, and bond insurers like Assured Guaranty (AGO). Comment! [Financials, U.S. Economy]
Friday, August 10, 2012, 9:32 AM Municipal bond funds saw a speedy $1.14B of inflows in the week ended August 8, according to Lipper, the highest level in 5 monhts, and continuing a near-unbroken steak of positive flows dating back to December. Muni ETFs - still a small player in the space - saw inflows of $9.7M, down from $25M the previous week. 2 Comments [U.S. Economy]
Thursday, August 9, 2012, 3:05 PM Some deterioration underneath one of the steadier performers of late, Q2 saw the highest number (290) of municipal downgrades in the last 10 years, reports Moody's. A positive note, the downgrade/upgrade ratio moved just slightly higher to 4.4:1. 1 Comment [U.S. Economy]
Wednesday, August 8, 2012, 10:56 AM Maybe the most interesting item from Berkshire Hathaway's (BRK.B) Q2, suggests Blaine Rollins, was a 50% cut in its exposure to the health of municipalties. Buffett's firm terminated contracts with notional value of $8.25B that would have paid out in the event of certain municipal or state defaults. 1 Comment [Financials]
Thursday, August 2, 2012, 4:29 AM San Bernardino yesterday became the third Californian city to file for bankruptcy protection, saying it owes over $1B to 10K-25K creditors. San Bernardino's filing, as well as those of Stockton and Mammoth Lakes, will be major test cases of whether distressed cities will be permitted to go back on their bond and pension obligations. 3 Comments [U.S. Economy, Top Stories]