Monday, October 20, 2008

Death to Muni


CA 9/1/2037 LOS ANGELES CALIF CMNTY DEV AG A3 BBB+ RADIAN 6.490 9.750 68.69 9/1/2017 100.00

WTF is that crap Dawg? That crap is a muni bond offering. California, maturity 2037, agency, ratings and insurance, and the "numbers." Supposedly 6.49% the price is $68.69 so the true yield is 9.75% tax free. [The last two numbers are call date and price.] In California 9.75% double tax free is like 15% equivalent in the highest brackets. This probably won't happen. There's got to be an option for the issuing agency to decline.

The repercussions are interesting. We lose the short term impetus of the municipal debt for infrastructure trade but we take that from general economic health long term. In this specific case I fully expect the Community Redevelopment District to take the usurious terms and do even less harm than if they had gotten more money. Talk about unexpected consequences. Comm Dev Dists are the anthesis of rational public expenditures. Planners with daddies' credit card.

23 comments:

Agent #777 said...

Let me be the FIRST to say this goes right along with We need the Bank buyout. It is not intended to take over the free market but to preserve it.

Aaron said...

first, murst etc :)

Aaron said...

damnit!

Agent #777 said...

Sorry Aaron. We are talking microseconds here...

Property Flopper said...

I may be the only person who actually LIKED Death to Smoochy. Edward Norton was great in it. You really need to watch it correctly though - FIRST watch American History X, then Death to Smoochy. REALLY shows what an excellent actor he is.

Property Flopper said...

Damn. That will teach me to type more than a single line.

Casey Serin said...

So, Robbo, when's your official prediction for Goldspring hitting zero cents? Right now, it's at 1.15 cents, down 18% on the day.

If you go back to August and make a rough linear trend-line, the stock should be zero by December 1st. Sweet!!

More OPM flushed down the toilet that I'll never have to pay back! Win-win! :-))

Aaron said...

microseconds is right!

Rob Dawg said...

1 Edward Norton is a new acting attention of mine. Uniformly creative work. I think Jack Nicholson.

2 Look at the volume of GSPG. Classic pump n dump.

3 Agent #777 is correct. The quote that resonates was penned some 40 years ago; "...perfecting sealing wax." That was written by a trained economist. Really.

4 There is no calling cliff dives. None. Anyone tells you otherwise is worse than lying. GSPG could dribble off the trading boards. GSPG could flash and burn. GSPG is IMO likely to drop sub penny and limp for months if not years.

Lost Cause said...

You are right about Edward Norton.

Son of Brock Landers said...

edward norton is a great actor who shows good range. he had a great run between primal fear and 25th hour. i only watched 'death to smoochy' while stoned, so i have a vague recollection of the terribly cheesy children's show songs and weird dances.

Did anyone see the Cato Institute's ratings for the 50 US governors and their spending & tax habits? Interesting to see potential 2012 or 2016 candidates at work.

Nick from Canada said...

Mortgage Fraud Task Force

In recent months, an Eastern District of California Mortgage Fraud Task Force has been established. This action was taken as a result of the significant increase in reported mortgage fraud as economic conditions and the housing market have worsened. Members of the task force include representatives from the U.S. Attorney’s Office, FBI, IRS-CI, the Department of Housing and Urban Development, the United States Bankruptcy Trustee’s Office, and the California Department of Real Estate.

“Mortgage fraud is a very real problem, both legally and economically. Federal law enforcement here in the Eastern District is fully committed to holding responsible those who in their greed have stolen from their fellow citizens. It is our duty to do all we can to restore faith and confidence in the marketplace by placing these thieves where they belong: in prison.” stated U.S. Attorney Scott.

Drew Parenti, Special Agent in Charge of the Sacramento FBI, said, “Mortgage Fraud has recently been elevated to the FBI’s highest financial crime priority, and we are attempting to address the numerous reports of fraud within the real estate industry that have occurred across the country. We are focusing on the industry professionals, the “insiders” who have manipulated the mortgage loan process for their own financial gain. These investigations are lengthy and complicated but we will work with our law enforcement partners and utilize every resource available to us to ensure these cases are investigated and prosecuted to the extent the law allows.”

Scott O’Briant, Special Agent in Charge of IRS Criminal Investigation said, “Mortgage fraud adds secret dollars to the underground economy that erodes the integrity of our tax system and threatens the financial health of our communities. IRS-CI will continue to utilize its financial investigative expertise to aggressively investigate criminal activities that adversely affect our financial system.”

“These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS-CI is committed to pursuing individuals who commit these types of crimes.”

The task force allows for a more targeted, coordinated approach in prioritizing the massive volume of referrals being made to federal and state agencies.

McGregor W. Scott, United States Attorney
Eastern District of California
Contact: Lauren Horwood (916) 554-2706

Centipede said...

This is what the McCain/Palin campaign has created.
Think about it.
BTW, I think Edward Norton is overrated.

Rebecca said...

God, it's been over 40 years since I had Logic 101, but is Centipede's argument the Vividness Fallacy, or the Questionable Cause? Or Guilt by Association?

but I agree, Ed Norton is highly precious and overrated. Anybody that breaks up with Selma Hayek....sheesh.

Tyrone said...

I just sold off a CA Tax-Free Muni fund I've held for 15 years. Share price dropped 75 cents after I sold. And I figured sooner or later defaults would kick in. We'll see, I guess.

Lex said...

"When you were a child
You were treated kind
But you were never brought up right.
You were always spoiled with a thousand toys
But still you cried all night.
Your mother who neglected you
Owes a million dollars tax.
And your father's still perfecting ways of making sealing wax."

Centipede said...

The Fight Club is Nietzsche for Trailer Trash.

Rob Dawg said...

Lex,
Gold star.

Peripheral Visionary said...

Off topic, but I thought Rob might be interested . . .

Baroque or simply broke? Money woes hit art market

Wait, let me guess . . . no mention of speculation on heavy leverage, a quick dismissal of the suggestion that this might be a bubble, a cheerful mention of bargain-hunting, the usual "froth going out" phrase, and, inevitably, the trademark "things getting back to normal" phrase.

A week of slowing sales and sagging prices suggests the global financial meltdown has finally ended the art-market boom that saw paintings and sculptures become must-have commodities for the world's elite . . .

"A lot of the froth and hype has gone from the contemporary market," Melanie Gerlis, art market editor of The Art Newspaper in London, said Monday.

Art world observers have been predicting a crash since the U.S. subprime mortgage crisis began rippling around the world. Many of the buyers driving the art world sales frenzy were hedge fund and private equity millionaires — among the first to suffer as the credit crunch took hold.

But prices stayed high, thanks in part to Russian and Middle Eastern buyers who were insulated from the worst of the economic woes . . .

"I do not look at the marketplace ... as in any sense frozen or not moving forward, be it with some price adjustments, because that's what's happening. There's a price adjustment going on in a number of categories where there's been big price appreciation," Ruprecht said.

He added that the demand and interest from the United States was "a surprise to us" and that some longtime collectors, particularly in the U.S., see the falling prices as an opportunity to find a bargain.

Christie's said the last few weeks had shown that prices for artworks were "finding a new level," but added it remained "cautiously optimistic" about upcoming sales . . .

Some galleries even said they were glad to see the end of the feeding-frenzy atmosphere.

"It is nice that it's going back to normal and that it's time to talk about art again, instead of investment," said Claus Andersen of Andersen's Contemporary in Copenhagen.


You know, it's almost as if I've heard this all before.

Rob Dawg said...

"Art Bubble?" Absolutely. I'm thinking more of a "Collectibles Bubble." Add to your observation 60s and 70s Muscle Cars. Actually all collector cars except the ultra-premium high end. And where have we herd that before?

w said...

Edward Norton in "Down in The Valley" had an incredible performance. He is a great actor.

Property Flopper said...

I just loved the contrast between his stone cold nazi in American History X with, well... Smoochy. He doesn't even LOOK like the same person. That's acting. I've seen him in many other preformances, but those two provide such a nice contrast.

I do have to agree with the point about breaking up with Salma Hayek though... what was he thinking.

Rebecca said...

You got to appreciate what Charlie Sheen said in Two and 1/2 Men: No matter how gorgeous a woman is, somewhere there is a man tired of her sh$t.