Something’s Up in Texas
Local government investment pools have flourished in Texas and its local governments have benefitted from the highly competitive marketplace that provides a myriad of options, many at very low cost. But recently the industry has attracted the attention of state legislators who have introduced bills that would alter the landscape, likely to the detriment of […]
The Week After
You can’t ignore the massive market selloff last week, even if cash pools and short-term fixed income portfolios escaped the worst. Equity markets bore the brunt, losing 10-15%. (That selloff continued this morning.) By contrast the fixed income markets seemed a calm and sheltered place. Yes, bond yields fell but the change in short term […]
New Bank CD Benchmarks Provide Transparency to The Market
The collateralized CD market has been a black box for public agencies, where useful information on rates has been hard to come by and public agencies are hampered in assessing relative value. We’ve created a series of new investment benchmarks to address this by tracking rates that banks pay for collateralized public funds deposits. It […]
The Fed Said Nothing Has Changed Except. . . The Markets Are Happy, for Now.
Sometimes meetings of the Federal Open Market Committee bring great market changes, sometimes not. Yesterday’s meeting was a Not. Bottom line: the Fed said not much and investors, skittish over market direction, were relieved, with both equities and bonds rising in price after the meeting’s concluding announcement. Most public funds investors limit their involvement to […]
A Bond Fund that Isn’t
If you ask a local government investor what additional offering they might use, they often respond that it would be a fund that invests in longer-maturity investments but allows them to redeem their shares at par whenever they want. Anyone who has taken Investments 101 knows that this is (usually) an impossibility. Investing beyond the […]
Unsettled Times, So Hunker Down
Last week’s Research Note “The R Word” perhaps seemed a bit off track to some folks, but the above chart, published Friday by the Atlanta Federal Reserve, captured a lot of eyes. It looks eerily like the same chart in the first quarter of 2020 when Covid shut down the markets and the economy in […]
Coda: About Federal Agencies; the Debt Ceiling Game; and FDIC Insurance
Coda: Another Observation About Federal Agency Debt The last issue of Beyond the News described the changes in debt issuance by federal agencies since the Great Recession, noting three key points: (1) shrinkage in the amounts issued by Fannie Mae and Freddie Mac, (2) a sharp reduction in the volume of short-term discount notes issued, […]
Federal Agencies: Oh, for The Good Old Days
There was a time when it was easy to outshine a Treasury investment with little risk. Federal agency debt was the key. That time is long gone, a consequence of the financial crisis and the Great Recession of 2008. The result diminished, perhaps forever, the role of federal agencies that had been a lynchpin of […]
Treasuries: Ya Gotta Love Em
Treasuries are the rarest of birds and also the most common. Rare because they are universally accepted as a safe haven for investment, and the most common because they are in abundant supply. If you don’t like them as they are, well then, the price will go down. And don’t worry about supply: you can […]
Beyond the News: So, What is Next?
Top of mind recently has been the importance of portfolio liquidity. I’ve commented on this several times in recent posts—most recently in last week’s note on the changes in state and local government investment portfolios reported in the Federal Reserve’s release on Financial Accounts of the United States. The events this week could not be […]