local government

The New York State Court of Appeals has ruled that the Atlantic Yards basketball project can go forward as planned, dislocating the residents in the Brooklyn, NY area where the stadium is to be built.  In essence, the decision means…

This story is on the front page of Business Week: Detroit Mayor Dave Bing is struggling to save his city from fiscal calamity. Unemployment is at a record 28% and rising, while home prices have plunged 39% since 2007. The 66-year-old…

Today, I want to run a few thoughts by you courtesy of John Mauldin.  In his recent weekly newsletter, he makes a number of points I have made here over the past few weeks and comes to a similar conclusion about the weakness of…

I have really started to dislike municipal bonds as an asset class. They have seen a huge rally along with almost every other financial asset but the underlying fundamentals are weak because of financial distress at states and…

Bond insurer Ambac Financial has warned bankruptcy is a distinct possibility, sending its shares plummeting more than 30% today. What is intriguing about this pending bankruptcy is how this company escaped bankruptcy in 2008, was…

Why aren’t more municipal bonds being downgraded by the ratings agencies Fitch, Moody’s and S&P?  If you look at sovereign debt in revenue-constrained countries like Greece, Portugal or Ireland, the ratings agencies are issuing…

This came in overnight via the FT.  Most of the shortfall in revenue is made up through spending cuts.  Below are the relevant paragraphs: The agreement involves cutting nearly $6bn from schools and community colleges and…

This can't be good. A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap. The development is the latest twist in…

This is effectively bankruptcy. Bloomberg reports. California is poised to begin its new fiscal year tomorrow without a plan in place to close a $24 billion deficit as the state prepares to conserve cash by issuing IOUs to vendors who are…

I am re-posting this February article because it is clear that many of the policy dilemmas Barack Obama is now facing on the economy were wholly predictable. In this post and another from January, I argued that it was better to have zero…