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Michael Aronstein on "muni bubble"


Rabbitisrich
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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1gKwz7qcZfE

 

Aronstein is one of the better macro oriented managers, and he usually doesn't substitute hyperbole for analysis. I know very little about the overall muni market, but I note that the LAUSD is set to sell $1.75 billion later this month. Los Angeles is currently over $200 million in the whole on almost $10 billion in outstanding debt.

 

http://www.businessweek.com/news/2010-02-09/l-a-to-test-investors-deficit-aversion-in-1-75-billion-deal.html

 

 

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"To mitigate future public excesses, Aronstein said, legislation should be enacted that would hold elected officials to the same standards of fiduciary accountability and conflict of interest restrictions as money managers, he said."

 

Wow...THERE'S an interesting thought...

 

-Crip

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  • 2 weeks later...

More trouble with munis:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aOWMcHKwqyEc&pos=11

 

Ambac Financial Group Inc., the second biggest bond insurer, faces as much as $1.2 billion in claims if a judge in Nevada allows Las Vegas Monorail Co., which runs a train connecting the city’s casinos, to reorganize in Chapter 11 bankruptcy. The City Council of Pennsylvania’s state capital shelved a plan to sell taxpayer-owned assets to meet payments on $288 million of debt used for an incinerator funded in part with bonds insured by a unit of Bermuda-based Assured Guaranty Ltd. Harrisburg is weighing a possible bankruptcy filing.

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More trouble with munis:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aOWMcHKwqyEc&pos=11

 

Ambac Financial Group Inc., the second biggest bond insurer, faces as much as $1.2 billion in claims if a judge in Nevada allows Las Vegas Monorail Co., which runs a train connecting the city’s casinos, to reorganize in Chapter 11 bankruptcy. The City Council of Pennsylvania’s state capital shelved a plan to sell taxpayer-owned assets to meet payments on $288 million of debt used for an incinerator funded in part with bonds insured by a unit of Bermuda-based Assured Guaranty Ltd. Harrisburg is weighing a possible bankruptcy filing.

 

 

FFH bought a large pile of BRK insured munis at about this time last year.  Does anyone doubt that Prem is the smartest guy in the room?

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