New York City boosts bond sales, cuts yields

institutional investors moving money out of equities? sort of like the dollar being a flight to safety?

Oh jesus, tell me you aren't serious here.

Muni bond yields going from ridiculously high to slightly less than ridiculously high is supposed to show the city is on solid footing?

They went from 5.58 percent to 5.55 percent, and 3.47 to 3.43 on 10 years, which is VERY big spread over treasuries.

Even if you don't understand that, you are COMPLETELY missing something.

Add in the new higher taxes in NYC, and the effective after tax yield goes UP. More so than 3 basis points.

So, in after tax terms.... investors are actually getting HIGHER yield than they were before!

I hadn't read the article. 3 basis points. That's some cut.

Which, again, is offset by the increase in effective yield because of the tax increase!

Somebody REALLY needs to push an agenda here...

Taxes increasing would only matter if you are paying the increased taxes. You keep telling me that everyone is fleeing NYC. Wall street is dead and no one will make over 250k, so there is no increase in taxes for them. And for the 2 bankers who do make over 250k, their comp is going to be virtually all equity that is deferred till retirement, at which point they will no doubt move to FL or other states that have no income taxes.

Printer, look up "strawman argument".

Your original assertion was demolished, we get that, but you don't need to lie...

Muni bond yields are incredibly high, so that doesn't make much of a point for you.

Not to mention.... why do you assume that all income comes only from salary?

How exactly was my original assertion that was demolished? I was merely pointing out, correctly, how foolish your doomsday predictions are that NYC is over and done with. If anything you have backed up that assertion by your pointing out that there are and always will be tons of wealth in NYC, no matter what happens to Wall Street in the short run, as well as the fact that NYC Muni's, despite the incredibly negative budgetary trends, are cheap right now.
And while spreads are typically the measuring stick, they have a lot less relevance right now given that the Fed is effectively manipulating the Treasury market.

Muni yields are not that high from an historical basis - spreads are wide, yes, but that measuring stick has less legitimacy given the Fed's manipulation of the Treasury market

> How exactly was my original assertion that was demolished?

You noted that yields were down as a sign of NYC doing well.... and you were wrong on both counts.

Try again.

> I was merely pointing out, correctly, how foolish your doomsday predictions are that NYC is over and
> done with.

Yes, change your story to a strawman argument. Doesn't get more foolish than that.

You can call yourself correct all you want, but so far thats just been a sign of your mistakes being bigger than usual.

"If anything you have backed up that assertion by your pointing out that there are and always will be tons of wealth in NYC, no matter what happens to Wall Street in the short run"

So, you have to lie about what I said now to make your point.

Well, at least you know you've got nothing to stand on.

"as well as the fact that NYC Muni's, despite the incredibly negative budgetary trends, are cheap right now."

Yes... and that is a HORRIBLE SIGN for New York. Cheap bonds are BAAAAAAAAAD.

Seriously, did you ever take a finance class?

"Muni yields are not that high from an historical basis - spreads are wide, yes, but that measuring stick has less legitimacy given the Fed's manipulation of the Treasury market"

That manipulation would carry to the munis as well.... but its not, which again proves the point.

Too easy.

nyc10022 - I see you are having a difficult time connecting the dots, so let me clearly explain things to you - I apologize for having overestimating your intellectual abilities.

Currently wall street pays about 20-30% of NYC income taxes. If bonuses, which are >50% of this tax base are all in deferred equity which doesn't vest till retirement, then NYC will lose all of this tax base, b/c no one will retire in NYC - they will all establish residency in a state with no income tax prior to retirement so that when their bonuses are paid out at retirement, as income, it will not be subject to NY state and city tax. And that doesn't even include the appreciation of the stock, so the real #s are substantially higher. That means NYC will lose at least 15% of its current income tax base.
Addtionally, you are vehemently predicting a 50-75% decrease in property values, so the property tax base will similarly be crushed.
Additionally, you are predicting that crime will soar, which will undoubtedly have a massively negative effect on tourism and the related hotel & sales taxes.

Thus, according to YOUR predictions, the NYC tax base will be catastrophically reduced.

If so, then the ability of NYC to service and repay its debt will be catastrophically impaired. Which means that NYC muni's cannot possibly be cheap at these levels.

But, as the article factually highlights, the issue was oversubscribed, and sold at lower than expected yields, even with the increased issue size.

In other words, the MKT is smacking your argument in the face.

there is also every time a huge demand for T-Bills at a yield of 0.000000004% LOL

and 30 year T=Bonds yielding three point seventytwo %

Residents of the City of New York are exempt from city, state and regular federal taxes on income earned from in-state issued bonds. Sounds like a good deal expect...

General Obligation (GO) bonds depend on tax revenue to pay back the interest and principal. This is the thing that scares me about GO munis. What happens if NYC can't raise enough taxes in a few years to cover the ton of bonds they just issued. The Federal government can always print more money to pay of treasuries (inflation/schlmation) but the City of New York has to beg the feds for money or come up with some crackpot tax scheme to siphon the money from NYers which may lead to people fleeing the city. And we're right back to the 70's again.

"nyc10022 - I see you are having a difficult time connecting the dots, so let me clearly explain things to you - I apologize for having overestimating your intellectual abilities.

Currently wall street pays about 20-30% of NYC income taxes. If bonuses, which are >50% of this tax base are all in deferred equity which doesn't vest till retirement, then NYC will lose all of this tax base, b/c no one will retire in NYC - they will all establish residency in a state with no income tax prior to retirement so that when their bonuses are paid out at retirement, as income, it will not be subject to NY state and city tax. And that doesn't even include the appreciation of the stock, so the real #s are substantially higher. That means NYC will lose at least 15% of its current income tax base."

Wait, let me get this straight... to prove to everyone that NYC is doing fine and that the tax base is not declining, your original assertion.... you just documented how NYC is going to lose most of its tax base.

OH MY LORD DID YOU JUST SMACK YOURSELF IN THE FACE!

ROTFL.