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Tuesday, April 23, 5:53 AM San Bernardino's council has passed a budget that will allow the bankrupt Californian city to restart $1.2M in biweekly employer contributions to Calpers while continuing to renege on its commitments to its other creditors, including bondholders. Along with Stockton, San Bernardino represents a test case over who should get paid first when a municipality goes bankrupt - the public employees or the bondholders. (previous) 4 Comments [Global & FX, Top Stories, U.S. Economy]
Thursday, April 18, 1:34 PM A butterfly flaps its wings in California? Tiny Canyon Lake (pop. 11K) notifies CalPERs it wants out of the pension plan, and says it's ready to pay a termination fee to do so. Behind the decision is CalPERs' recent approval of a 50% rise in employer contributions over the coming years. "How many cities might opt out," says a bankruptcy attorney. "The issue here for CalPERs is if Canyon Lake becomes a trend." Comment! [U.S. Economy]
Friday, April 12, 4:04 AM California has raised $2.7B in a general-obligation bond offering, selling $1.25B for capital projects and $1.5B to refinance existing debt. The state took in $700M more than it initially intended to, although it had to raise the yield on 10-year paper to 2.37% from 2.33%, or 0.58 percentage point above the rate on benchmark 10-year munis. Comment! [Global & FX]
Friday, April 12, 2:46 AM San Bernardino in California has proposed restarting bimonthly $1.2M employer contributions to Calpers almost a year after the city suspended the payments, although it will continue to renege on its commitments to other creditors, including bondholders. The decision highlights the battle over who should take most of the pain when a city goes bankrupt - the bondholders or the public servants. Comment! [U.S. Economy, Global & FX, Top Stories]
Wednesday, March 27, 4:56 AM A federal judge is due to hear closing arguments today about whether Stockton in California should be allowed to file for bankruptcy protection. The main is issue is whether the city can continue paying into the Calpers pension fund while forcing losses on bondholders. The case is being widely watched, with Alabama's Jefferson County and California's San Bernardino also considering breaking with the long-standing practice of meeting obligations to bondholders. 9 Comments [Global & FX, U.S. Economy]
Thursday, January 31, 3:39 PM California gets its first upgrade from S&P since 2006, the agency hiking the rating on the state's general-obligation bonds to A from A-. "The economic expansion is gaining positive momentum," and the approval of higher sales and income tax rates "positions the state to capitalize on burgeoning economic activity." S&P should ask Phil Mickelson about that one. 49 Comments [U.S. Economy]
Thursday, January 31, 5:52 AM California is set to receive $5B more in tax revenue for January than it initially forecast. One reason could be increased state rates, while another may be the rise in national capital gains taxes that took effect this month - with January the deadline for 'estimated tax' payments for the prior calendar year, investors may have cashed out to avoid the hike. 4 Comments [U.S. Economy]
Friday, January 11, 5:30 AM After facing years of ballooning deficits, California is forecasting it will generate an $851M surplus in the next fiscal year starting on July 1. Under Governor Jerry Brown's budget, which he unveiled yesterday, general-fund revenue is forecast to rise 3.3% to $98.5B and spending 5% to $97.7B. Brown expects the state's cost cuts, tax rises and improving economy to be the main factors behind its better finances. 5 Comments [U.S. Economy]
Tuesday, December 11, 2012, 4:54 PM San Bernardino's creditors square off with a group of Wall Street bondholders arguing they should have the same status as Calpers in the city's bankruptcy proceedings. Among the creditors are Ambac and a unit of MBIA (MBI). A loss by the creditors would have major repercussions for municipal finance - look for the case to make its way to the Supreme Court at some point. 2 Comments [U.S. Economy]
Tuesday, December 4, 2012, 3:12 AM After voters approved tax hikes for the rich in the recent election, California’s Legislative Analyst’s Office is forecasting that the state will enjoy a surplus of $1B by FY 2014-2015. Critics says the increases will lead to an exodus of residents, businesses and jobs, although Governor Jerry Brown's office points to a report which says that the link between tax policies and migration are untrue. 37 Comments [U.S. Economy]
Wednesday, November 28, 2012, 10:44 AM The stakes are raised as Calpers moves to sue San Bernardino over the bankrupt city's decision to halt its bi-weekly payments to the fund. The precedent-setting case will have major implications for the way bondholders and insurers are treated in a municipal bankruptcy. If Calpers loses - good for creditors. If Calpers win - not so good. It's hard to imagine this not making its way to the Supreme Court. Comment! [U.S. Economy]
Tuesday, November 20, 2012, 5:40 AM Bankrupt Californian city San Bernardino presented a new budget yesterday in which it proposed renegotiating its obligations to the Calpers pension fund as part of its restructuring. San Bernardino is being closely watched, as Wall Street bondholders have indicated that they plan to challenge Calpers' historical primacy as a creditor in bankruptcy cases. Comment! [U.S. Economy]
Monday, October 22, 2012, 12:34 PM A story worth following unfolds in California where San Bernardino attempts to get a handle on pension costs by stopping biweekly contributions to Calpers. "A David and Goliath moment," says a bankruptcy attorney. At stake? Check out Vallejo, whose average post-bankruptcy pension cost for a fireman is greater than the starting salary of a NYC fireman. More than $200K to pay a safety worker? It's hard to make the numbers work. 5 Comments [U.S. Economy]
Wednesday, October 10, 2012, 7:58 AM The debt of 30 California cities - including Oakland, Fresno, and Sacramento - is placed under review for downgrade by Moody's. The move follows Moody's August report in which it noted bankruptcy is likely to become a new tool for cities trying to get concessions from bondholders. 7 Comments [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]
Friday, September 21, 2012, 4:44 AM When California Governor Jerry Brown came into office last year, he said he found a "wall of debt" of $28B. That wall is actually a much bigger $167B-$335B, says the State Budget Crisis Task Force, which was co-founded by Paul Volcker. The task force includes lots of off-book items in its calculations such as pledges to provide pensions to public workers and healthcare for retirees, and $40B to improve drinking water. 10 Comments [Global & FX, U.S. Economy, Top Stories]

PWZ PowerShares Insured California Municipal Bond Portfolio ETF

PWZ

PowerShares Insured California Municipal Bond Portfolio ETF