Saturday, January 15, 2011

Excellent Interactive Map via The Economist : "US Equivalents: Which Countries Match The GDP And Population Of America´s States"

I think in the context of the ongoing & worsening budget crises the chart provides a good perspective when sooner or later the MUNI topic will dominate headlines... At the latest when they need another reason to justify "QE 3.0".... ;-)

Denke die Übersicht ist besonders hilfreich wenn es wohl eher früher als später um den desaströsen Zustand der öffentlichen Haushalte in den einzelnen Bundesstaaten und Gemeinden geht ( Stichwort MUNIcipal bonds ).... Würde mich nicht überraschen wenn zukünftig die Begriffe "QE 3.0 & MUNIS" in demselben Zusammenhang genannt werden.....






US equivalents......Which countries match the GDP and population of America's states?

IT HAS long been true that California on its own would rank as one of the biggest economies of the world. These days, it would rank eighth, falling between Italy and Brazil on a nominal exchange-rate basis. But how do other American states compare with other countries? Taking the nearest equivalent country from 2009 data reveals some surprises. Who would have thought that, despite years of auto-industry hardship, the economy of Michigan is still the same size as Taiwan's?
The Daily Chart via The Economist has much more to offer... Check it out....

Empfehle jedem regelmäßig dem Daily Chart via The Economist einen Besuch abzustatten... Lohnt sich.....

I think the example of Illinois ( equivalent of Turkey ) & the clip with Meredith Whitney makes it cristal clear that this won´t be a minor issue down the road....

Wer noch Zweifel daran hat das der Begriff "MUNIS" in absehbarer Zeit auch in der deutschen Presse häufiger zu hören sein wird sollte sich das Beispiel Illinois ( lt. interactiver Karte auf "Augenhöhe" mit der Türkei ) vor Augen führen und das Video von Meredith Whitney ansehen... .....

Illinois Governor Wants to Borrow $15 Billion to "Balance" the Budget; Illinois Total Unfunded Liabilities Exceed $200 Billion Already Mish

Illinois Seeks To Issue $8.75 Billion Bond To Pay Overdue Bills As Muni Issuance Market On Verge Of Shutdown





To put Whitney comments into perspective i suggest to read the more balanced rebuttal from Self-Evident & Whitney Municipal-Bond Apocalypse Is Short on Default Specifics via Blommberg.... Personally i think it´s only a matter a time until a "Black Swan" arrives in the MUNI complex..... Like in Europe ( Greece & Ireland ) it will be interesting to see how the politicians will be able or willing to "balance" the pain among voters via austerity, tax hikes, cuts in entitlements etc. & bondholders via haircuts.... Either way this won´t be GDP & market positive.....

Für alle die Whitneys Aussagen für übetrieben halten bietet sich die kritische "Gegenschrift" von Self- Evident & Whitney Municipal-Bond Apocalypse Is Short on Default Specifics via Bloomberg an..... Ich persönlich bin der Meinung das es einzig und alleine eine Frage des Zeitpunkts ist, wann ( und nicht ob ) auch der MUNI Markt Besuch vom "Black Swan" bekommt..... Ähnlich wie in Europa ( Griechenland & Irland ) wird es sehr interessant zu sehen sein inwieweit die Politiker Willens & in der Lage sind die notwendigen Einschnitte zwischen den Wählern ( Kürzungen, Steuererhöhungen, drastische Einschnitte in Pensionsplänen usw )und Anleihebesitzern "auszubalancieren".... Keine der möglichen Lösungen dürfte "marktpositive" Wirkung entfallten.... In Realtime ist dies in Irland & Griechenland zu beobachten....

State Budgets: Year Ahead Looms As Toughest Yet HuPo


If 2011 is hinting at a national recovery, there is little sign of it in statehouses across the country.

States that already have raided their reserve funds, relied on borrowing or accounting gimmicks,
and imposed deep cuts on schools, parks and public transit systems no longer can protect key services in the face of another round of multibillion dollar deficits.
Are Mom-n-Pop Investors Freaked Out By Munis? Flow Data Says Yes. MarketBeat WSJ

For the week ended Wednesday, investors pulled more than $4 billion from muni funds, extending the outflow streak to ten consecutive weeks. The $4 billion pullout also represents the largest week of outflows during the run
Maybe it´s time to reread the Special Gold Report "In Gold We Trust" from Erste Group..... ;-)

Kann nicht schaden sich demnächst den Special Gold Report "In Gold We Trust" der Ersten Bank mal wieder vorzunehmen..... ;-)

UPDATE:

NYT Reports States Looking For Ways To File Bankruptcy, Muni Bondholders To Be GMed NYT via ZH


Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.
American states' pension funds The Economist



Space, time and public pension black holes FT Alphaville

Muni mayhem, charted FT Alphaville



Yes, Investors are Still Dumping Munis. WSJ MarketBeat

The big loser in today’s data is the Municipal fund space which lost -$5.7 bln. This takes total outflows for January 2011 up to -$10.26 bln which is the greatest outflow since our data starts in 2007. Note that even at the height of the Lehman crisis outflows peaked at -$8.36 bln in October 2008.
Moody’s Credit Ratings of States to Factor in Unfunded Pensions NYT



Interaktive Karte US Staaten im Überblick Der Spiegel

US-Bundesstaaten stehen vor der Pleite Der Spiegel


More from the NYT on why QE3.1 - the Muni Edition is just around the corner

The NYT reports that "President Obama is proposing to ride to the rescue of states that have borrowed billions of dollars from the federal government to continue paying unemployment benefits during the economic downturn. His plan would give the states a two-year breather before automatic tax increases would hit employers, and before states would have to start paying interest on the loans."

Michigan, for instance, owes the federal government $3.7 billion it borrowed to pay unemployment benefits. Under current law the state would be forced to pay $117 million in interest to the federal government this fall, and the federal tax on employers would automatically step up each year to repay the debt.


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