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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Factbox: Top budgetary threats to U.S. state, local governments |
REUTERS - March 18, 2011 - Writing by Lisa Lambert; Reporting by Lisa Lambert, Jim Christie in San Francisco, Karen Pierog in Chicago, Michael Connor in Miami, Joan Gralla and Edith Honan in New York; Editing by Kenneth Barry
EXPENSIVE BORROWING
Prices have begun rising recently, and yields dropping, but the risk remains that borrowing could become too expensive for issuers, especially after three selloffs over three months. Currently, many are holding off on selling bonds.
The most obscure-sounding threat -- a shortage of bank liquidity facilities -- could have some of the biggest implications for local governments.
The cost of liquidity facilities, which support commercial paper and variable-rate demand bonds, is likely to increase in the near future because the number of providers is shrinking and the international BASEL III accords on banking regulations are strengthening capital requirements for banks. That, in turn, could drive up borrowing costs.
When the bond insurance industry broke down in 2008 and a credit freeze seized the municipal bond market, many local governments bought the facilities to provide liquidity for their debt. Consequently, most facilities will expire around the same time this year.
FEDERAL INTERVENTION, MANDATES
In the shorter run, states and local governments are dealing with the approaching end of the $819 billion economic stimulus plan that is providing the largest transfer of federal funds to states in U.S. history.
The last of the money, in the form of additional reimbursements for Medicaid, runs out this summer. But already, states and local governments say they are falling off a stimulus "funding cliff."
Another stimulus measure that suspended interest charges on loans the federal government makes to states for unemployment benefits has ended, and states are now looking at mounting bills for those loans.
Republicans, who hold a majority in the House, have made it clear that there will be no additional stimulus and, in a twist, states have said they have no interest in a direct federal bailout. They are more concerned that the federal government's current debates about shutting down, or slashing domestic spending, would cut short any recovery they are experiencing.
The Federal Reserve has the power to make short-term cash loans, but Fed Chairman Ben Bernanke has said the central bank has no plans to buy states' short-term notes and the Fed's authority limits it to providing temporary assistance, not a full bailout.
Meanwhile, states and local governments are concerned about federal programs that could require them to spend money they do not currently have. Many of the reforms in the healthcare law passed last year to provide all Americans with access to medical help must be carried out at the state level. The all-encompassing No Child Left Behind education bill has expired, as has the long-range statute laying out how interstate transportation will function, commonly known as the "Highway Bill."
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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