Pension Pulse points us toward a Bloomberg Report:
"Investors have demanded higher interest rates from California, compared with other borrowers. The state’s 10-year bonds yielded 4.6 percent by the end of last week, 1.51 percentage points more than top-rated municipal borrowers, according to Bloomberg indexes. Three months ago, that difference was as little as 1.06 percentage points. Greek 10- year bonds yield 5.72 percent, Ireland’s 4.78 percent and Spain’s 3.93 percent.
In California, “it’s never a quick budget, it’s always prolonged and when it’s prolonged the headlines get worse and spreads widen,” said Peter Hayes, who oversees $115 billion in municipal bonds for New York-based BlackRock Inc., the world’s largest asset manager."
It is the last paragraph that tells the tale. Negotiations with lenders are more drawn out, the deal involving more complications that the lenders no longer have the resources to continue. Hence the Gubinator goes to Washington to have Federal mandates lifted. In other words, variance lending no longer works, time to recode entropy without mandates.
Yet another of Felix Salmon's endless government insurance programs causing a long term risk and uncertainty.
No comments:
Post a Comment