Of Course California Isn’t the Next Greece

Remember last spring when the doom and gloomers were comparing California to the crisis in Greece?  We opined, based on the actual numbers, how unlikely this was in our July post.

Well, it looks like California was not the next Greece.  A municipal credit piece published on December 20, 2011 on Bloomberg by Brian Chappatta, provides some interesting year-end stats on the municipal market:

  • The S&P Municipal Bond Index shows a return of 10.4% for 2011, outperforming the market for the 5th time in 6 years. Returns calculated as follows:       


  • Missed payments (anticipated defaults) by municipal issuers were $2.1 billion, down from $2.8 billion in 2010.
  • States have closed over $325 billion in budget deficits over the last four fiscal years.

Now does this sound like a market on the edge of hundreds of billions of defaults and large investment losses?   We’re publishing our 2012 Municipal Market Outlook at the end of January with an informed review of the last year and what to expect in the coming year.  Click on the “Follow” popup to have this, and all our posts delivered to your email as soon as they’re published!



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Posted in Economic theories, General, Munis in the news

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