Market Commentaries

A Mixed Message From The Fed

May 2013

 A MIXED MESSAGE FROM THE FEDFederal Reserve Chairman Ben Bernanke appeared before the Joint Economic Committee on Wednesday, May 22 and offered this testimony:“For some months, the FOMC has been buying longer-term Treasury securities at a pace of …


Stockton’s April Fools’ Ruling

April 2013

STOCKTON’S APRIL FOOLS’ RULING “….and it is apparent to me that the City will not be able to perform its obligations to its citizens relating to such fundamental matters as public safety, as well as other basic governmental services, without the a …


STATE OF ILLINOIS SETTLES

April 2013

“Washington, D.C., March 11, 2013-The Securities and Exchange Commission today charged the State of Illinois with securities fraud for misleading municipal bond investors about the state’s approach to funding its pension obligations.”SEC memo headline, …


REPEALING TAX-EXEMPTION – Impact on Small and Medium sized Communities

February 2013

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” Text of the Sixteenth Amendment, ratified February 3, 19 …


MMXIII: Illinois & the Year of Bond Vigilantes

February 2013

The first month of 2013 began quietly for the municipal bond market. It ended, here in Illinois, with a thud.This month brings us the thirteenth year of the third millennium as measured by the Gregorian calendar. The Chinese calendar recognizes 2013 as …


Repealing Tax Exemption: A Clear and Present Danger

January 2013

This past October, at the Illinois Municipal League’s annual conference held in Chicago, I participated in a panel discussion,“Repealing Tax Exemption- A Clear and Present Danger”. The other panelists included Matt Posner of Municipal Market Advisors a …


DECEMBER’S MARKET CORRECTION

January 2013

Finally, bond yields moved higher in December reversing the predominant 2012 trend line and reminding many that losses are possible even in Mr. Bernanke’s contrived bond market utopia. Centuries ago the bard from Avon opined (as did our own January 200 …


Municipal Bond Market Regulatory Update

November 2012

As Chief Compliance Officer of Bernardi Securities, Inc., I make a point of attending as many meetings and seminars as I can to keep our firm apprised of new rules, regulations and legislation that affect our organization and clients. Along with servin …


Yields Remain Low, Volatility Increases

September 2012

September began with “AAA” rated, 10-year non-taxable municipal bonds yielding 1.70%. 10-year bond yields spiked mid-month to 1.93% and ended the month and 3rd quarter yielding 1.70%. The supply of new issues slowed this past month relative to Septembe …


2012 Mid-Year Municipal Market & Credit Update

August 2012

It’s important to frame the developments in the broader financial markets over the last six to twelve months before discussing the municipal market’s continued ability to absorb issuer-specific credit events. Roughly a year ago, the United States’ trip …


Some perspective on the recent California bankruptcies

July 2012

There have been three municipalities that have either filed or have voted to approve filing bankruptcy in California in the past year: Stockton, Mammoth Lakes and most recently, San Bernardino. Stockton and San Bernardino went bankrupt due to the “usua …


Municipal Bondholders 1, Jefferson County Newspeak 0

June 2012

Score one for bondholders. A federal judge ruled in June that Jefferson County, Alabama could not reduce debt payments while in bankruptcy in order to spend more of the system’s net operating revenues on its aging sewage system. County’s Orwe …


Treasuries Continue to Rally, Municipal Bonds Less Affected

May 2012

Renewed questions as to the health of the European Economic Union coupled with news of slowing growth in China, India and here at home sparked a strong rally in the Treasury market this past month. Treasuries rally more pronounced While this …


“Intercalary” February: An Extra Day of Bond News

February 2012

Leap Year means 29 days in February 2012, so there is an extra day of bond news this month.New issue supply remained modest, demand strongThe new issue supply of municipal bonds remained fairly modest in February and investor demand remained strong dur …


Back To Municipal Bond Basics

January 2012

“You could see 50 sizable defaults, 50 to 100 sizable defaults, more. This will amount to hundreds of billions of dollars worth of defaults.” – “60 Minutes”, Meredith Whitney commentary, December 2010   “The notion that many bond investors have th …