Someone Please Forward This To Meredith Whitney

The big muni finance news this week was the bankruptcy declaration by Harrisburg, PA, which has long been at the vanguard of cities in financial distress.

The fact that such a well-known big city filed for Chapter 9 has of course brought back all of the maybe Meredith Whitney was right chatter.

As a refresher, 2011 has not been a bad year at all for muni finance. Below is the iShares S&P National Municipal Bond Fund (MUB), which took a dip over the 2010-2011 winter, but has overall been a big gainer this year.

MUB:

So is Harrisburg a harbinger of doom?

To answer that, you must go read this post by Bond Girl at Self-Evident, examining the roots of Harrisburg's woes.

Essentially it boils down to a trash incinerator that the city built in the 1970s, and a series of mis-steps made by the city government to keep it going past its lifespan, resulting in hundreds of millions of dollars ultimately wasted. The whole thing has been a gigantic money pit, made worse by the fact that the city tried to cut corners to save money (by going with cheapo contractor), ultimately of course costing it even more money.

And even once the plant was rebuilt...

[The contractor] Barlow “finished” the project by April 2006, four months late.  After the plant opened, the city discovered that there were major problems with the plant’s ash-handling systems and that the third boiler was not entirely finished.  Without the third boiler, the plant could not generate enough revenue to make the required debt service payments and offset operating expenses.  (As far as I can tell, it would cost the city another $50 million for the plant to be fully functional.)  The plant’s deficits became a burden to the city, which cut staff, increased property taxes, and increased waste bills.  Even still, the city was unable to make its promised payments on the bonds and the county and Assured have had to make payments instead.  (The city has avoided defaulting on its general obligation bonds, however, due to the up-front payment it received on a parking lease.)  Last I read, the city had paid for a forensic audit of the authority’s finances in order to have a better understanding of how the project’s costs escalated so rapidly.  They have also sued Barlow.  Both of these actions are moot, of course, because Barlow filed for bankruptcy.

Muni crises like this are idiosyncratic, and not reflective of a broader wave of trouble on the horizon.

Definitely read the whole post >

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Is This Citi Rookie A Complete Fool, Or Did Someone Prank The Poor Guy?

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Image: Cleo

An embarrassing email apparently sent by a brand new Citigroup employee to a group of analysts and associates at the bank's institutional clients group in Australia is making the rounds. 

"Looking to be a rock star at this place - feel free to send through
your tips, but I think I've got this one covered," the email stated including two attachments of the young banker. 

The first attachment appears to be from a course catalogue from an Australian university drumming up the bachelor's in commerce.  The Citi employee is featured in the clipping posing against a wall. 

The other is a clip from Cleo, an Australian magazine.  This might provide a hint to why someone might be pulling a prank on the poor guy.

Here's why.

The rookie Citi employee once told Cleo, in order to be successful "you need to be thick-skinned.  I guess the 'alpha-male' type."

Looks like someone might be seeing just how thick his skin really his. 

Citi was not immediately available for comment at the time of publication. 

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Finally, Someone Prices One Of These New BlackBerrys To Sell (RIMM, S)

Following RIM's announcement about the new BlackBerry Curve models, Sprint says it will offer the phone for $79.99 with a two-year contract and $50 rebate.

It goes on sale September 9.

This is a much, much better price than what RIM and carriers are asking for the new BlackBerry Bold, which will cost up to $300, depending on the carrier.

True, the Bold has a touchscreen and is more powerful than the curve, but there are plenty of other smartphones out there that can be bought at a more reasonable price.

The full announcement from Sprint is below.

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OVERLAND PARK, Kan. (BUSINESS WIRE), August 23, 2011 - The next generation of Research In Motion’s (RIM) (NASDAQ: RIMM; TSX: RIM) popular BlackBerry® Curve™ series of smartphones, the stunning new BlackBerry Curve 9350, comes to Sprint (NYSE: S) on Friday, Sept. 9, offering the latest BlackBerry operating system – BlackBerry® 7. The new BlackBerry Curve 9350 is a fast, affordable, easy-to-use, full-featured and socially connected smartphone that is as beautiful as it is functional.

The slim and stylish smartphone will cost just $79.99 (excluding taxes) with a new line or eligible upgrade and two-year service agreement, after a $50 mail-in rebate via reward card1 and be available in all Sprint sales channels, including Sprint Stores, Business Sales, Telesales (1-800-SPRINT1) and web sales (www.sprint.com). Sprint Business customers may qualify to get BlackBerry Curve 9350 for $49.99 (excluding taxes) on a business account with a new line or eligible upgrade and new one- or two-year service agreement, after a $50 mail-in rebate via reward card1.

“It is exciting to see the BlackBerry Curve line continue to evolve, building upon past success,” said David Owens, vice president – Product Development, Sprint. “This latest iteration offers the recognizable form factor our customers have come to enjoy, while adding powerful new features and innovative apps of BlackBerry 7 to deliver the smoothest and fastest BlackBerry Curve experience to date.”

The BlackBerry Curve 9350 smartphone offers a full QWERTY keyboard and trackpad for easy one-handed navigation and keeps users connected by allowing them to easily share moments through pictures and videos via MMS, as well as by instant message with world-class IM services like BBM™ (BlackBerry® Messenger). With easy access to social networking sites like Flickr®, MySpace and Facebook®, this smartphone provides smooth integration to keep users up to speed on what’s happening in their personal and professional lives.

Key features include:

BlackBerry App World™, the official app store front for BlackBerry smartphones offering customization, fun and productivityNear Field Communications (NFC) support for a secure exchange of information between NFC-enabled devices over a very short distance5MP camera with HD video capture, flash and zoom512MB RAM2GB microSD card included, with support for up to 32GB microSD cardBlackBerryPlayBook support with BlackBerry Bridge™ (BlackBerry Bridge is available as a free download on BlackBerry App World)DataViz Docs To Go® Premium suite preloaded, for editing Microsoft Word, Excel and PowerPoint files from anywhereWi-Fi® (802.11 b/g/n)Bluetooth® 2.1+EDR support

Smoother and Faster with BlackBerry 7

With BlackBerry 7, the BlackBerry Browser is significantly enhanced to provide a faster and more fluid user experience and includes optimized HTML5 performance for incredible gaming and video experiences.

Building upon the Universal Search feature introduced in BlackBerry 6, BlackBerry 7 expands the capability to include voice-activated search. This new capability makes it easier and more convenient to search for content on the smartphone or web.

BlackBerry 7 also integrates BlackBerry® Balance™, which separates personal content from corporate content, giving users the freedom and flexibility to use the smartphone for personal email, Facebook®, Twitter®, multimedia, games and other apps, while satisfying the very real need for corporate data to be highly secure and manageable. BlackBerry Balance works in conjunction with BlackBerry® Enterprise Server 5.0.3, which provides a number of unique IT policy controls, such as wiping only corporate data or blocking work-related content and apps from being copied or forwarded to personal contacts.

BlackBerry Curve 9350 requires activation on one of Sprint’s Everything Data plans plus a required $10 Premium Data add-on charge for smartphones. Sprint’s Everything Data plan with Any Mobile, AnytimeSM includes unlimited web, texting and calling to and from any mobile in America while on the Sprint Network, starting at just $69.99 per month plus required $10 Premium Data add-on charge – a savings of $40 per month versus Verizon’s comparable plan with unlimited talk, text and 2GB web or $10 per month versus Verizon’s 450-minute plan with unlimited text and 2GB web. (Pricing excludes taxes and surcharges.)

Sprint was unbeaten among major wireless carriers for customer satisfaction according to results from the 2011 American Customer Satisfaction Index. In addition to tying for first place among wireless carriers, Sprint was also the number one most improved company in customer satisfaction, across all industries, during the last three years, according to the survey.

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