S&P warns of more muni bond downgrades

[Joanne98]

Source: CNN

NEW YORK (CNNMoney) -- Just as fears about a heavy sell off in the municipal bond market seemed to be easing, Standard & Poor's issued a warning that this year could bring a potential surge in the number of downgrades of bonds issued by state and local governments.

States including California, Illinois and New York are strapped for cash and dealing with deep budget deficits, sparking fears that states and cities could fall short in payment obligations to muni bond holders.

During the first three quarters of 2010, S&P cut ratings on 343 state and local government-issued bonds. That's 26% higher than all of 2009. And in all of 2008, S&P downgraded ratings of just 37 bonds issued by state and local governments.

"We believe that continued revenue decreases for state and local government may increase fiscal strain on budgets, and monitoring of liquidity will be especially important in 2011," said Standard & Poor's credit analyst Gabriel Petek.



Read more: http://money.cnn.com/2011/01/24/markets/bondcenter/municipal_bonds_downgrades/

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Notice how they're all working together to steal the life savings of government workers?

[Bobbysox22]

1. Gosh, the whole place is going to hell.

[decidedlyso]

2. If California tries and steal the money from some of its transportation

workers, they will bring down the State. These dudes are no one to fool around with. I have also heard (impossible to verify) that teachers pension fund are over 50% unfunded. Also, some city retirement funds for workers are also way underfunded. Munis used to be the safest of investments. I can assure you that when some of these people are told they will be getting 50% or less in retirement, their response will not be Gandhi-like.

[greiner3]

3. So the Reagan revolution of small government;

Has succeeded. There will be no turning back unless the real 'Silent Majority' speaks up soon and agrees to be taxed hard. The entire country will be sold and it will be caveat emptor.