Still buying municipial bonds?

Jared Watkins — Tue, 12 Oct 2010 00:00:00 +0000

US Cities Face Half a Trillion Dollars of Pension Deficits

As I mentioned back in March…

municipal debt mostly in the form of unfunded pensions is going to become a monster issue over the next 18 months or so. You are going to see cities going bankrupt or getting bailouts. As bad as it is for the cities.. it’s nothing compared to the 3 trillion in similar unfunded debt held by the states… or the roughly 100 trillion in unfunded federal liabilities.

Another issue impacting cities is going to be property revaluations. CharMeck has been holding it’s breath and pushing off property tax rate increases but by law they are required to revalue property every few years.. and we are getting overdue. Usually that means more revenue.. but in this environment property values.. including commercial values.. have been falling since valuations were last done. That’s going to mean lower revenue and probably higher tax rates trying to keep the revenue up. Those higher rates will also become a drag on our local/regional recovery.

Baby (ka)boomers

Jared Watkins — Wed, 31 Mar 2010 00:00:00 +0000

Some states face Greek-style debt woes

Harrisburg, Pennsylvania to Consider Bankruptcy

Baby ‘boomers’ are going to earn their name…

when they retire en-mass over the next few years. Those retirements will set off an economic chain reaction that will blow this country apart state by state. Massive unfunded state pension funds… and massive unfunded federal programs like social security and medicare will start blowing out budgets and bankrupt several states.. and possibly the country as people go from high income contributors to takers from these programs and states look for federal bailouts. We will see cities, states and probably even the country losing it’s AAA credit rating which will saddle us all with exorbitant interest rates, high taxes and high inflation as the dollar is devalued even further. The silver lining is that many other countries are in worse shape than we are and have this process happening already and that may cushion the reaction to our problems.

Pensions on The Infinite Unknown

Still buying municipial bonds?

Baby (ka)boomers