Muni Think

It is the underlying economy and demographics that drive tax revenues, budget needs, policy decisions, and capital needs/debt issuance of governments. Economic data is objective and updated often which can be critical in times like these.

The coronavirus has created such a massive disruption to the world’s stock markets that almost all California public employee defined-benefit pension plans will never recover. At a minimum, they must be put on a fiscal ventilator.

A complete disconnect between liquidity providers and seekers exposed the market’s inefficiencies: an asset class dominated by a limited investor base—retail investors—has grown increasingly concentrated.

Banks, asset managers, and other financial institutions need liquidity. This has created an unprecedented buying opportunity, with yields not seen since the financial crisis and then only seen for a short period of time.

While some types of revenue bonds may be less adversely affected than other types of revenue bonds, the entire market could see significant stress as the pandemic continues.

We are desperately trying to establish the bottom at present to provide a modicum of confidence that investors may stop raising cash and would be more inclined to put the cash horde back to work in the market.

Perhaps most important, nobody involved in this issue has argued that issuers or anybody else would benefit in any way from exempting MAs from appropriate regulation.

In the best of times, pricing municipal bonds is not so simple. In times of volatility, the challenge is magnified.

As business and leisure travelers stay at home rather than risk infection, events small and large are cancelled, and business slows so sharply it shows that the longest U.S. economic expansion since the 1850s may finally hit the wall.

NAMA believes the order will strengthen protection for issuers in keeping with the recent reforms in the municipal market.