Australia focuses on improving academic resources
A special commission of the Australian government has been hard at work for the last two years examining how to improve the nation’s education system. Their baseline findings say that Australian academic performance had declined, and that more resources are needed. Australian Broadcasting Corporation reported on the findings of the Gonski Commission (named after its chairman businessman David Gonski):
The report says the performance of Australian students has declined at all levels over the last 10 years.
It says in 2000, only one country outperformed Australia in reading and scientific literacy, and only two outperformed Australia in mathematical literacy.
But by 2009, six countries outperformed Australia in reading and scientific literacy, and 12 had students who were better at maths. (The entire show is here)
Taking a broader approach than the United States, which in 2001 passed the federal law known as “No Child Left Behind,” Australia has determined that school funding reform is the best framework for improving student performance. From the Gonski Report which is formally named the “Review of Funding for Schools Report“:
National priorities and reforms have also been agreed by all governments through the Council of Australian Governments to progress the national goals. Key policy directions under the National Education Agreement include improving teacher quality and school leadership, greater accountability and better directed resources, integrated strategies for low socioeconomic school communities, and improving the outcomes of Indigenous students. National curriculum is being developed to set clear achievement standards for all students.
While these reforms lay a good foundation for addressing Australia’s schooling challenges, they need to be supported by an effective funding framework.
The recommendations of the report, in effect, nationalize the funding framework and school curriculum. The ABC detailed the funding proposal:
Australia, which ranks eighth globally for academic performance, is 14 places higher than the United States. Maybe U.S. policymakers might want to have a look at Australia's efforts before that nation moves up even higher in the ranks. Join DiscussionThe report says state and federal governments must work together to coordinate funding more effectively. It recommends a two-tiered model called the ‘schooling resource standard’. The standard would form the basis for working out all school funding, and would be reviewed every four years. The standard should include a ‘per student’ amount, with adjustments for students and schools facing certain additional costs.
Base funding would be set for every student at the amount deemed necessary to educate a student in well-performing schools, where at least 80 percent of students achieve above the national literacy and numeracy minimum standard. The report suggests the base amount could be about $8,000 per primary student, and about $10,500 for secondary students.
There would be extra loadings for disadvantage such as disability, low socioeconomic background, school size, remoteness, the number of Indigenous students, and lack of English proficiency.
How bankrupt Stockton, CA was sold pension obligation bonds
Mary Williams Walsh of The New York Times recently dove into the issue of pension obligation bonds (POB), and she came up empty-handed. In her piece on bankrupt Stockton, CA’s POBs, Walsh relied on the analysis of an academic, Jeffrey A. Michael, with little background in municipal bonds, to claim that Stockton was duped into issuing $125 million of these bonds in 2007. Michael contends that the POB underwriter, Lehman Brothers, did not adequately disclose the risks associated with issuing POBs. Walsh writes:
After reviewing an analysis of the bond deal, underwritten by the ill-fated investment bank, Lehman Brothers, and watching a recording of the Stockton City Council meeting where Lehman bankers pitched the deal, Mr. Michael concluded that “Stockton is entitled to some relief, due to deceptive and misleading sales practices that understated the risk.
Lehman Brothers just didn’t disclose all the risks of the transaction,” he said. “Their product didn’t work, in the same way as if they had built a marina for the city and then the marina collapsed.
This “analysis” fails on so many levels that it is hard to know where to begin. The Stockton City Council special meeting on August 31, 2006 where Lehman made a presentation about issuing the POBs contains a broad discussion of the risks by the Lehman representatives, city council members and city officials starting. It starts at about minute 25 of the video here.
Lehman representatives made it very clear that issuing POBs is a method of swapping one liability – unfunded pension costs owed to CalPERS, California’s statewide pension system – with taxable municipal bonds issued to investors. Furthermore, and most crucially, the Lehman representatives explain that issuing POBs at an interest rate of 5.81% will replace payments due over 30 years to CalPERS that would be charged a 7.75% annual penalty rate to catch up. There was a discussion that the rate of return that CalPERS earned on its investments was a separate issue from Stockton catching up its outstanding unfunded liability.
Lehman bankers would have known that presenting in an open public meeting would mean that they would be recorded, and it’s hard to imagine them speaking falsely or misrepresenting the risks of a proposal.
Walsh leaps from the situation in Stockton to claim that all POBs are generally unsuitable for state and local governments. She uses a report from 2010 that cites 2009 pension returns, which were slaughtered by the financial crisis, to sound the alarm. In fact, a report from the Center on Retirement Research (page 4) is in dire need of 2012 data before conclusions are drawn (emphasis mine):
Indeed, states and cities have been sold inappropriate products, but without direct instances of fraud in Stockton, it and other municipalities should not be allowed to walk away from their liabilities. Join DiscussionIf the [POB performance] assessment date is the end of 2007 – the peak of the stock market – the picture looks fairly positive (see Figure 3A). On the other hand, by mid-2009 most POBs have been a net drain on government revenues (see Figure 3B). Only those bonds issued a very long time ago and those issued during dramatic stock market downturns have produced a positive return; all others are in the red. While the story is not yet over, since about 80 percent of the bonds issued since 1992 are still outstanding, some may end up being extremely costly for the governments that issued them.
Is spiking the biggest problem for public pensions?
The crisis that public pensions face over funding shortfalls is becoming increasingly important in the media. Add to that some concerns about the generous benefits that some public retirees receive. As state after state struggles with new controls on benefits and takes steps to address plan shortfalls, the issues become mired in more and more complexity.
There is one issue in the pension storm that is easy to understand; that is the issue of “pension spiking,” or an employee taking sometimes illegal steps to inflate the final salary on which their pension is based. California State Controller John Chiang has gone so far as to call spiking a “form of public theft.”
The Federal Reserve Bank of Cleveland defines pension spiking as:
The practice of inflating employees’ salaries to increase their benefit base. This can be accomplished through a last-day “promotion,” where the employee receives a new title and a salary far above what he earned in the previous 364 days, or where an employee nearing retirement receives the lion’s share of available overtime.
Here is a particularly crazy example of spiking from Bloomberg. In this case the employee has included every conceivable form of compensation into their salary total for their pension calculation:
Robb Quincey made $460,000 last year as city manager of Upland, California, a middle-class suburb east of Los Angeles at the foot of the San Gabriel Mountains. His duties included overseeing 325 employees, a police department with 25 cars, four fire stations and a library for the community of 76,000.
Last year, Quincey, 51, negotiated a new contract in which the city agreed to add reimbursements for his car, housing and other costs directly into his paycheck, according to public records. When he retired, the combined payments would be counted in his final year’s salary and used as the basis for calculating his pension for life.
The Los Angeles Times did an excellent analysis of 20 California counties that do not participate in the statewide pension system, CalPERS, which bans pension spiking. The prevalence of pension spiking among higher earning public employees is surprising:
There is one issue in the pension storm that is easy to understand; that is the issue of "pension spiking" or an employee taking sometimes illegal steps to inflate the final salary on which their pensions are based. Join DiscussionChicago teachers could strike over longer school days
Big trouble is brewing in Chicago, the nation’s second-largest school district, as negotiations between the city and teacher representatives moves closer to a strike deadline on September 10. Chicago teachers have filed a strike notice that, if acted on, would be their first strike since 1987. The main disagreement between the teachers and the city is Chicago Mayor Rahm Emanuel’s plan to lengthen both the school day and the year. The district is offering teachers an eight percent raise over four years, and it wants to form a committee to create a new pay system.
Chicago teachers, the second highest-paid teachers nationally after New York City, say the fight is not about compensation, but rather that the mayor is actively withholding resources from the Chicago Public Schools system. The rhetoric has become inflammatory. Teachers’ union president Karen Lewis called Emanuel “a liar and a bully” while exhorting a union crowd at a Labor Day rally.
The political ramifications of the Chicago feud stretch far beyond the shores of Lake Michigan. Emanuel was previously President Barack Obama’s chief of staff. He is still a leading Democratic figure representing an important voting block in Illinois. The opposition he has created with Chicago teachers, an important base of the Democratic party, could not have come at a worse time as the incumbent president and Democratic-controlled Senate fight to stay in office. There is more at stake with a teacher’s strike than whether Chicago school children will miss a few days of school.
It is not clear to me why Emanuel has made longer school sessions the main issue in reforming Chicago schools. School graduation rates have increased the last five years, according to the CPS. This year will see the highest-recorded rate of graduation at 60.6 percent, according to CPS CEO Jean-Claude Brizard. Obviously important progress is being made without packing more hours into the school day.
According to CBS, the average annual salary of a Chicago teacher is $76,000, without benefits; substantial compensation for nine months of work per year. However, when you glance over the payroll listing for Chicago school employees, you see salaries in public schools and central administration are robust for all school employees. But in the current negotiations, they are being asked to work longer hours with only a tiny increase in pay.
The area that seems to be the biggest challenge for the city and school system in Chicago is the underfunded pension system. The city was granted a partial holiday by the State General Assembly and allowed to divert the majority of their pension contribution to the school system’s general budget. According to the Chicago Tribune:
“Last year, the teachers’ pension fund received $187 million, $400 million less than the amount it should have gotten. When the holiday ends in 2014, the district’s pension costs are expected to more than triple to $647.8 million, adding even more stress to the CPS budget.”
Chicago teachers are planning a strike that could challenge a proposal to lengthen the school year. The challenge comes amid a time when the city already finds itself with underfunded teacher pensions. Join DiscussionA new model for end of life care
The UCLA Center for Health Policy Research has published the results of a study that showed a new program for children resulted in fewer days spent in the hospital, lower medical costs and a higher satisfaction rate by families and care coordinators. The tiny “Partners for Children” California public health program increased home and community-based care for terminally ill children on Medicaid – largely by removing a six-month time limit for how early children with terminal conditions can enter hospice care – and it has shown very promising results. If the program results can be replicated on a larger scale, the program might make an important contribution to lowering health costs and helping terminally ill patients spend more of their time at home. (here)
California Healthline describes the background of the program:
“In 2010, the state opened the program to more than 135 families covered by Medi-Cal (California’s version of Medicaid) in 11 counties.
Individuals up to 21 years old who had been diagnosed with life-threatening illnesses, such as cystic fibrosis, cancer and neuromuscular and cardiac disorders, were eligible to participate in the program.
As part of the program, participants’ families are assigned a liaison who coordinates the child’s care and are given 24-hour access to a nurse familiar with the child’s situation.
Typically, Medicaid beneficiaries are eligible for both treatment and hospice care only when a child has six months or less to live. However, the pilot program operates under a federal waiver that allows it to avoid this requirement.”
The UCLA Center for Health Policy Research study found that the program had savings of approximately 11 percent per patient: (here)
Medical costs for end of life care consume a significant portion of public spending on healthcare. Small pilot programs like Partners for Children are a welcome beacon for change that puts the patients and families at the center of the process. Join DiscussionNew hope for New Orleans
Reuters reported this week that New Orleans was lucky to escape major damage from Hurricane Isaac, which dumped heavy rains and high winds on the city. Reactive defenses that were put in place after Hurricane Katrina in 2005 appear to have worked in protecting the city from severe damage. More importantly, the fiscal condition of New Orleans seems to have survived the collapse of the economy after the last disaster.
Just as Hurricane Isaac was making landfall this week, New Orleans was in the municipal bond market with a $167 million general obligation bond offering — A sign of the rebound. However, the bond offering was not painless. The city had to pay 1.31% more to investors for 10-year bonds than comparable AAA-rated securities, according to Thomson Reuters Municipal Market Data.
New Orleans is rated A3 by Moody’s, BBB by Standard & Poor’s and A- by Fitch; all lower investment-grade ratings. This offers a mixed-to-good economic picture for the city. Fitch Ratings details some positives:
“Economic recovery continues, although recent statistics suggest a slowdown. Employment in the city has flattened out in recent months, and the city’s unemployment rate has ticked up from 8.3 percent to 8.5 percent in the 12-month period ending May, 2012. This rate is higher than both the state (7.1 percent) and U.S. averages (7.9 percent). Management <city officials> notes a number of commercial projects either recently completed or underway, including the recent re-opening of the 1,200 Hyatt Regency hotel and construction on the $1.2 billion LSU-VA medical center complex. Also, the mayor recently announced plans for several large retail stores in the city, and the Brookings Institution named the New Orleans metro area the leader in overall economic recovery in the first quarter of 2012.”
The aftermath of the disaster was prolonged, however there was some relief. In November 2010, the federal government forgave a $240 million loan to New Orleans for community disaster relief related to Katrina. The forgiveness strengthened the city’s balance sheet and can free up resources for other vital services. But there are some storm clouds on the horizon. Fitch explains why it gives the city’s credit rating a negative outlook:
“The negative outlook reflects the city’s deteriorated General Fund balance that remained negative in fiscal 2011 as well as the current challenge to implement a refinancing plan for outstanding pension obligation bonds. The city is facing a bank bond bullet payment of $115 million on the pension obligation bonds (POB) on March 1, 2013. Along with the bullet payment, the city will owe a swap termination payment currently valued at $46 million. Although the 2012 budget was structurally balanced, revenues are currently falling $12 million short of budget and further expenditure reductions will be necessary to end with a positive result.”
New Orleans has made a remarkable recovery since 2005 with support from the federal and state governments. The city’s population has rebounded to about 380,000 or 80% of the pre-disaster level, after falling to 208,000 in 2006. Between 2010 and 2011, its population grew by nearly 5%, causing the U.S. Census Bureau to name New Orleans the fastest growing U.S. city in the 100,000 or greater bracket. Given the tremendous ordeal the city has been through, it appears to have nearly recovered from the devastation of Katrina. New Orleans is a tough, gritty city and will likely survive Isaac and future hurricanes with resilience.
Given the tremendous ordeal the city has been through, it appears to have nearly recovered from the devastation of Katrina. New Orleans is a tough, gritty city and will likely survive Isaac and future hurricanes with resilience. Join DiscussionBe dubious of opaque muniland data
A Reuters story with the headline “U.S. states’ debt tops $4 trillion — report” caught my eye because I had never seen any analysis of the debt of states that put the number so high. The report the story referred to was issued by a mysterious non-profit organization called State Budget Solutions (SBS). The group’s website lists no physical address and says that SBS is affiliated with another non-profit, Sunshine Review of Alexandria, Virginia, whose Form 990 IRS filing declares that it has one employee. Furthermore, there is a third affiliated non-profit, Sunshine Standard, which also lists no information describing its funding or management. Considering that the three groups are non-profits focused on transparency and accountability for governments, their own behavior is pretty opaque. It’s also extremely odd that they don’t ask for donations on their websites. What non-profit doesn’t need donations?
SBS describes its mission in the following way:
“The State Budget Solutions Project is non-partisan, positive, pro-reform, proactive and anchored in fundamental-systemic solutions. The goal is to successfully engage political journalists/bloggers, state officials and opinion leaders in a new way of thinking about state government and budgets, fundamental reforms, transparency and accountability.”
These are excellent goals, but the information that SBS is disseminating seems slanted for political purposes. For instance, it breaks out the liabilities of all 50 states by type of debt and shows unfunded pension liabilities for states at about three times the more commonly cited figure of the Pew Center on the States.
To use another example, SBS lists unfunded pension liabilities as $2.86 trillion, while Pew’s total is $759 billion. That is a discrepancy of over $2 trillion. In one especially extreme case, SBS says that the pension liabilities for New Jersey amount to $144.8 billion, while Pew says they add up to $35.7 billion. It’s plausible that part of the difference arises from SBS using outdated pension data from 2010, before New Jersey reformed its pension system. If so, that would make its data much less credible, because Pew uses data from 2011. One thing I find really odd is that SBS has included the specific Pew data in its public data spreadsheet available via Google but has not made reference to it in its public statements.
Another example of widely divergent data between SBS and Pew relates to the unfunded liabilities of New York State, whose plan is generally considered one of the best funded in America. Although the plan has $150 billion in assets, SBS says that it is underfunded by $182 billion. Pew says the New York State plan is underfunded by $3 billion. Someone’s numbers are messed up.
When I asked Bob Williams, the head of SBS, why its numbers differed so much from Pew’s, he referred me to statements about underlying methodologies that come from the American Enterprise Institute and are cross-checked to the work of Josh Rauh of Northwestern University. Neither of these methodologies has been endorsed by accounting-standard setters, the Government Accountability Office, or any other authority. In other words, SBS “estimates” of the debt of states are merely academic opinions that have little backing other than from a conservative academic and a conservative think tank. In contrast, Pew uses the state’s reported data on pensions, which is based on Government Accounting Standards Board accounting methodology.
A Reuters story with the headline "U.S. states' debt tops $4 trillion -- report" caught my eye because I had never seen any analysis of the debt of states that put the number so high. Join DiscussionWarren Buffett’s municipal weapons of mass destruction
A lot of ink has been spilled recently over Berkshire Hathaway’s move to close out $8 billion worth of municipal credit default swaps. Journalists and market commentators have wondered whether Warren Buffett has soured on municipal bonds as an investment vehicle and whether other investors should as well. The latest bit of speculation comes from Charles Gasparino, who writes that the move was most likely political and had to do with disagreements with President Obama over the politics of welfare. Gasparino’s piece in the New York Post may be the most convoluted thing that I’ve ever read about municipal bonds:
“And even if, when you dig deeper, the move suggests Buffett wasn’t making a bet against all munis but only those that adopt some of the same policies he and President Obama are advocating on a national level.”
Gasparino says that after making calls to market participants, he has determined that some of the municipal credit default swaps that Buffett closed out were written on the debt of California and Illinois, two states in dire fiscal shape.
It’s true that California and Illinois are cash-strapped and facing tough fiscal decisions. But the more important issue is that both states have constitutional requirements that prioritize bondholders. These constitutional provisions render credit default swaps on these states useless because, unless the whole economy collapses, these bonds will be paid. States are also not allowed to go bankrupt under federal law. So muni CDS are not insurance against states defaulting but are speculative securities that allow an investor to book gains and losses. Buffett’s public pronouncement that derivatives like credit default swaps are “weapons of mass destruction” has not stopped Berkshire from investing in, and getting burned by, such securities on occasion.
The place to see Buffett’s view of municipal bonds is Berkshire Hathaway’s investment holdings, and it looks as if nothing has changed much recently. Berkshire reports its municipal bond holdings in the “Investments in fixed maturity securities” section of its 10Q SEC filing. At the end of 2011, Berkshire owned just over $3 billion worth of muni bonds, but according to a filing dated June 30, 2012, the Berkshire portfolio had dipped slightly to $2.9 billion, a decline of about 4 percent. Given how low municipal bond yields have gone, I’m surprised it’s not a bigger decline. An insurance firm like Berkshire gets no benefit from the municipal bond tax exemption, so it’s not an asset class that can provide the firm with that much investment income.
If Buffett were totally sour on muniland, he would likely exit all his cash bond holdings and move to U.S. Treasury bonds. Buffett is a very smart investor, but it’s important to look at his decisions from many angles, not just one that fits a political narrative.
Journalists and market commentators have wondered whether Warren Buffett has soured on municipal bonds as an investment vehicle and whether other investors should as well. The latest bit of speculation comes from Charles Gasparino, who writes that the move was most likely political and had to do with disagreements with President Obama over the politics of welfare. Join DiscussionBe skeptical of Christie touting his accomplishments
Bloomberg View’s Josh Barro is lauding New Jersey Governor Chris Christie in advance of his keynote address at the Republican National Convention:
“Christie’s record in New Jersey is too substantively centrist to run as the darling of the party’s right. Instead, if he runs in four years, he’ll have to make the case for a more compromising and consultative politics that tries to occupy the center, modeled on his successes in New Jersey.”
Unfortunately, Barro never details any successes of Christie during his time as governor. In fact, Christie’s record is particularly thin, and New Jersey remains in dire fiscal shape. In contrast to Barro’s piece, the reporters in the Bloomberg newsroom have detailed how bond markets are actually charging New Jersey and its municipalities more to borrow since Christie took office:
“New Jersey and its localities are paying an average yield penalty of 0.57 percentage point over AAA securities to borrow for 10 years, according to data compiled by Bloomberg. The gap is more than double the five-year average. It was 0.35 percentage points the day Christie took office.”
Translation: Municipal bond markets are charging New Jersey and its towns nearly twice as much to borrow than they did before Christie took office.
Let’s take a look at Christie’s thin record of accomplishment. Christie recently worked with the legislature to pass a very weak teacher tenure reform bill. Although Christie lauds it as the most significant change in a hundred years, school administrators are not overwhelmed. The Passaic Valley Today newspaper in New Jersey quoted two school superintendents on the actual substance of the Christie reform:
“‘I think it’s too early in the process to determine how effective or what implication the new law will have,’ said Dr. Viktor Joganow, PVHS superintendent. ‘I don’t think adding an extra year will make a difference when it comes to a district awarding a teacher tenure. Clearly, the most important piece of the legislation is the ability to prevent tenure without a district having to go through a lengthy and costly process. The law makes that part of it more fiscally viable.’”
Fuzzy speeches do little to address substantial economic and fiscal problems. New Jersey has plenty of these, and Christie has done little to alleviate them. Join DiscussionIs a higher muniland default rate Congress’ fault?
Last week the New York Fed put out a controversial report claiming that the default rate for municipal bonds is 36 times higher than one cited by credit rating agencies. Using data sets from S&P Capital IQ and Mergent that tracked defaults for unrated bonds, the New York Fed report created a big stir among muniland commentators and probably a small amount of concern among retail investors. The data cited by the New York Fed is well known among market professionals and has been thoroughly dissected, but so far the discussion hasn’t focused on why these unrated bonds default at higher rates. Specifically, no one has linked the high default likelihood of this sector, private activity bonds, to the fact that Congress has exempted them from rigorous disclosure since 1968.
Randall Forsyth at Barron’s pulled the right information from JPMorgan municipal bond research to explain what this unrated sector of high defaulting bonds is. Take special note of that last section:
“The vast majority of defaults came from revenue bonds, which are backed by the cash flows from a specific authority or entity, such as a municipal hospital, or an industrial-revenue bond issued on behalf of a private entity. In other words, by far the diciest niche of the muni market.
Indeed, defaults were concentrated in a relatively small, high-risk subsector of the muni market, according to data collected by Priscilla C. Hancock, managing director at J.P. Morgan Asset Management. Moreover, the data also show that even in default, bondholders recover a substantial percentage of their investment.
In recent years, the defaults in the muni market have been centered in just a few areas, according to J.P. Morgan’s numbers. From 2000 to 2011, corporate-related bonds, such as industrial-revenue bonds, accounted for 34 percent of defaults. Within that sector, American Airlines’ bankruptcy was responsible for a whopping 84 percent of those defaults. The AMR unit was responsible for debt for airport facilities; but that is representative of a corporate-credit risk, not that of municipalities.
Land-based “dirt bonds” comprised 26 percent of the defaults. These debts were to fund “build it and they will come” projects that went bust with the housing collapse. Health-care related issues accounted for 19 percent of the defaults, 92 percent of which were for nursing homes. In other words, the vast majority of municipal defaults in the past decade were the result of the private sector’s use — some might say abuse — of the tax-exempt bond market.”
Note that the vast majority of defaulted bonds were issued under the cover of the municipal tax exemption to fund private, for-profit activity — essentially a corporate municipal bond. Airport facilities dedicated and controlled by one airline, the bankrupt American Airlines in this case, and privately run nursing homes are infiltrating muniland to take advantage of lower borrowing costs and significantly lower disclosure requirements, thanks to Congress.
Jonathan Hemmerdinger of the Bond Buyer wrote an excellent piece detailing the 40-year effort of the Securities and Exchange Commission to push Congress to require corporate-like disclosure for these high-defaulting private activity securities. Hemmerdinger detailed the two most recent SEC efforts:
“In 2007, then-SEC chairman Christopher Cox asked Congress in a white paper to enact legislation that would require corporate conduit borrowers in the muni market to meet the same registration and disclosure standards they would be subject to if they were not borrowing through a municipal issuer.
The SEC fired the latest volley on July 31, when it recommended in its report on the municipal market that Congress eliminate the exemption in the Securities Act of 1933 for conduit borrowers. If Congress acts on the SEC’s recommendation, borrowers of many private activity bonds would be required to register with the SEC, and would be subject to periodic reporting requirements. Nonprofit borrowers and privately-placed securities would continue to be exempt.”
Personally I think private activity bonds should have their tax-exempt status removed. Allowing that exemption is an abuse that costs the U.S. Treasury tax revenues. The New York Fed study detailing the higher default rate gives weight to the argument that the SEC has been making for 40 years: that this bond sector needs more rigorous disclosure standards. Investors need protection from defaults, and the first line of defense is high-quality disclosure. For some reason Congress is shielding issuers of private activity bonds. Maybe it’s time for Congress to shift its focus to protecting investors.
The data cited by the New York Fed is well known among market professionals and has been thoroughly dissected, but so far the discussion hasn't focused on why these unrated bonds default at higher rates. Specifically, no one has linked the high default likelihood of this sector, private activity bonds, to the fact that Congress has exempted them from rigorous disclosure since 1968. Join Discussion-
Resident Muniland expert
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