States and Municipalities Face Credit Woes

The costs of financing state and municipal projects such as hospitals, schools and public transit, are rising as the credit crisis cripples states’ often used source of credit – auction-rate bonds. The lack of demand for these bonds, which allow states to finance long-term projects over a period of time, has frozen the market and forced states to pay much higher interest to creditors.

Snapshot asks, when will liquidity return to the state and municipal bond market?

Bloomberg – New York in Double Whammy as Swaps Compound Auctions
Financial Times – Short View: Credit Spreads
Wall Street Journal – The Eliot Indicator
Center for Budget and Policy Priorities – 21 States Face Total Budget Shortfall
Calculated Risk – California City Nears Bankruptcy