Recent Reads

What's With Bank Balances?

By Marty Margolis on May 7, 2024

I’ve been puzzling over a surprising set of statistics. The Federal Reserve reports that in recent years state and local government balances in checkable deposits and currency have mushroomed and are now nearly three times greater than they were in 2019. At the same time assets in time and savings accounts have declined. In pre-pandemic […]

A Big Week for the Bond Market

By Marty Margolis on April 30, 2024

It is a big week for the bond market with a slew of economic releases (jobs, consumer confidence and a few inflation measures), the Federal Open Market Committee meeting (Tuesday/Wednesday) and investors desperately seeking direction. Public sector investors have a constrained universe: they do not generally invest in equities (though a few do), and their […]

The Little Engine that Couldn’t: The Demise of BSBY

By Marty Margolis on April 23, 2024

The details. After the Great Recession regulators determined to replace LIBOR as the dominant index to link floating rate securities. LIBOR was meant to represent the rate on unsecured obligations (commercial paper, corporate notes, bank loans, etc.) It had grown over its 40-year life to be the dominant market index, and as such had great […]

Fair Weather: Public Funds Investors Are Well-Positioned to Meet Investment Expectations

By Marty Margolis on April 16, 2024

The accompanying chart of recent moves in yields speaks volumes about the current market environment and its implications for public funds investors. Since the year began short-term money market rates have been at or near their generation highs. And they have barely noticed the big moves in market sentiment. LGIP rates, as measured by the […]

Banking Crisis + 1 Year: Should Federal Deposit Insurance Reform Be Part of the Response?

By Marty Margolis on April 10, 2024

A year ago, after the wreckage of the bank failures led by Silicon Valley Bank had been cleared, reforming deposit insurance was offered as a way to reduce the risk of future bank runs More recently, the effort has been sidelined by the battle over proposed rules to raise bank capital requirements and liquidity. Down […]

First Quarter Investment Returns: Cash Led the Way Again

By Marty Margolis on April 2, 2024

• Local government investment pools and money funds once again produced market-leading returns in the 2024 first quarter. The beat by cash-type investments followed the strong showing for cash-type investments in 2023. • Returns of longer-duration portfolios were dragged down by a modest rise in interest rates. • The yield curve also worked against longer-duration […]

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Key metrics and trends in the public funds investment market.