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Wednesday, January 13, 2010

California Munis: No Need to Panic - WSJ.com


California Munis: No Need to Panic - WSJ.com:

"It now costs more to insure Californian municipal debt against default than it does bonds issued by the government of Kazakhstan. The central Asian country satirized in 'Borat.'

That is neither a joke, nor hyperbole. Californian munis cost 2.6% of face value per year to insure, reports CMA DataVision in London, which tracks bond insurance data. Kazakh bonds: Just 1.8%. It is 'now less expensive to insure Kazakh debt than that of Greece, California and various other entities,' confirms CMA spokesman Simon Mott. (Crisis-stricken Greece, incidentally, costs about the same as California).

Borat, one. The Terminator, zero."

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