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Could it Really be Nobody’s Fault? Presentation to the Municipal Bond Club of Baltimore Michael Stanton, Publisher Septe

Could it Really be Nobody’s Fault? Presentation to the Municipal Bond Club of Baltimore Michael Stanton, Publisher September 24, 2009. If It’s Nobody’s Fault, What Went Wrong?. A Series of Unfortunate (Rational) Events Blame the Greedy Bond Insurers? Blame Alan Greenspan?

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Could it Really be Nobody’s Fault? Presentation to the Municipal Bond Club of Baltimore Michael Stanton, Publisher Septe

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  1. Could it Really be Nobody’s Fault? Presentation to the Municipal Bond Club of Baltimore Michael Stanton, Publisher September 24, 2009

  2. If It’s Nobody’s Fault, What Went Wrong? • A Series of Unfortunate (Rational) Events • Blame the Greedy Bond Insurers? • Blame Alan Greenspan? • Blame Bill Gates?

  3. If It’s Nobody’s Fault, What Went Wrong? • A Series of Unfortunate (Rational) Events • Blame the Greedy Bond Insurers? • Rating criteria put them in a box • Blame Alan Greenspan? • Extremely low interest rates brought unforeseen stresses

  4. If It’s Nobody’s Fault, What Went Wrong? • Blame Bill Gates? • Computing revolution unleashed 25 years of growing confidence in quantitative modeling “We were the trend” -- George Winston, Tom Clancy’s Debt of Honor

  5. Re-Adjusting to Volatility YoY Change in New-Issue Volume, 1989-Present Source: Thomson Reuters

  6. Deals Get Bigger Average Municipal New-Issue Size, 2000-Present Source: Thomson Reuters

  7. Muni-Treasury Ratios BB20 vs. 10-Year Treasury

  8. The Emergence of BABs Taxable Municipal Issuance, 1999-Present Source: Thomson Reuters

  9. Insured Penetration Source: Thomson Reuters

  10. Who Can Access the Markets? Source: Moody’s , Thomson Reuters

  11. Who Can Access the Markets? Source: Moody’s , Thomson Reuters

  12. Where Insurance Stands Today • Assured Guaranty / FSA • Berkshire Hathaway Assurance Corp. • MIAC • National Public Finance Guarantee • Everspan • National League of Cities Mutual Insurer

  13. America Embraces BondsBond Election Results, 1990-2008 Source: Thomson Reuters

  14. Questions and Predictions • What’s DC’s next move? • Extend BABs / How to pay for them? • Tax-Credit Bonds • Regulatory overhaul • Mandatory exchange-trading / central clearing for derivatives? • Rating agency reforms • Changing the “issuer pays” model • Dropping NRSRO status • Mandating a single scale for munis and others • FA regulation

  15. Questions and Predictions • What will the dealer landscape look like? • Consolidation trend vs. “TBTF” • How do munis rank? • Is municipal disclosure a problem, and how will it change?

  16. Information Outlook • The Bond Buyer • Circulation is stable • No shortage of news! • Online is preferred method of delivery • Always seeking commentary, suggestions, recommendations for new services / tools Contact Info: Michael Stanton, PublisherOne State Street Plaza, 26th FloorNew York, NY 10004 212-803-6552 Michael.Stanton@sourcemedia.com

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