Alex_G

U.S. Financial Institutions: Does the Collective Balance Sheet Add Up?

Most useful article today. Thank you

Bond Insurer Break-Up: Beware Unintended Consequences

"There is much data to argue that the municipal bond insurance industry shouldn't exist to begin with, given these default rates. If municipalities have to issue at slightly higher rates in the absence of insurance, isn't this a cleaner long-run way to fund itself?"

When a municipality buys insurance for it's issue, it is in effect being rated by the insurer, which is far cheaper than being rated by the rating services. They save 2 ways, one w/ a lower interest rate and the other by not paying S&P and Moodys.