On May 2, The Bond Buyer, a leading municipal finance publication, reported the abrupt Treasury’s suspension of SLGS sales. Here is the opening of the article:
The Treasury Department has suspended the sale of State and Local Government Series securities in what it characterized as a necessary move to ward off the threat of a default.
The suspension is effective for demand deposits and time deposit securities beginning May 2 until further notice, Treasury said. Those subscriptions received by the Bureau of Fiscal Service before 10:00 a.m. on May 2 will be issued on the date requested.
(“Treasury suspends sale of SLGS,” https://www.bondbuyer.com/news/treasury-suspends-sale-of-slgs)
The report included the details of a refunding in progress in Columbus, Ohio and how the city’s finance officer faced a disruption in the middle of a nearly half billion financing.
This SLGS suspension means that every state and local government financing that needs a federally backed escrow will now incur a higher cost. Every school board, airport, hospital, college, sewer plant, etc. The debt-ceiling political charade now has impacted the entire universe of 90,000 separate municipal financial institutions ranging in size from a small fire district getting a new truck to the State of California.
Shame on all those politicians (Democrats & Republicans) who are now imposing this direct or contingent cost on all Americans. To paraphrase Roman history. They fiddle (like Nero) WE BURN (Pay more).
Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.
Sign up for our FREE Cumberland Market Commentaries
Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.
