Municipal Finance Associate Position
I'm in need of some fairly urgent help...
I have two outstanding job offers- both of which are very different. I have a question about one of them:
It's an associate role in BMO's Municipal Finance Group. I'd appreciate the audience's thoughts on the following: (1) Job stability- how worried should I be about layoffs, especially in light of the nationwide crisis in government finances?; (2) Exit opps- I know everyone asks about this, but there's a chance I'll have to leave NY for DC in 3 to 4 years due to family obligations. Can a few years in municipa finance translate into good opportunities? What else could there be in NYC if at some point I decide that in need to cut back on the hours?
Thanks, in advance, for your assistance.
Source: my uncle works in public finance.
I don't think layoffs will be a huge concern. There is less volatility than compared with regular investment banking. State and municipal government crises are overblown. Everyone keeps saying how bad the debt situation is in California. Fact: California's outstanding debt equals 1% of its output. Translation: California can raise its tax rates by 1% and ELIMINATE their deficit. They'll raise taxes before they default on their debt, guaranteed. Not possible with the U.S. Treasury (national debt is 60% of GDP).
You'll develop good connections within a small realm of finance professionals and it will pigeonhole you somewhat compared with if you did M&A or worked in some traditional banking group. My uncle says he's known guys to leave PF to do public sector work, consulting, etc. It's not bad money and the lifestyle is MUCH better than M&A for example.
seaver, I PM'd you
Muni Crisis (Originally Posted: 12/20/2010)
How bad could this get?
CBS News: The Day of Reckoning
Very bad.
I thought it was interesting that CNBC said that the bond funds were down while the bonds themselves were up. Shouldn't the sponsors of the funds (i.e. Blackrock - MUI) be arbitraging that like crazy today?
In a nutshell, this could get extremely bad very quickly. When I have time to draft a real response (and trust me, it will be lengthy), I'll explain how bad this really is.
The truth is, this is what happens when you have corrupt people doing the same thing for 20+ years and letting things finally hit the fan. It's going to be scary to consider it, but we will see massive bankruptcy occuring at the municipal and state level. Let the firestorm commence, I say.
cool - that would be interesting to see the lengthy response
yes, looks like people need to face reality...i like NJ governor Chris Christie's position and his willingness to make difficult decisions in spite of public outcry (or rather teacher union outcry)
Some great Christ Christie highlights with the teacher's unions...
http://www.youtube.com/watch?v=Tx723c9uBr0&feature=related
http://www.youtube.com/watch?v=BdEIhJ5jkOw&feature=related
[quote=alexpasch]Some great Christ Christie highlights with the teacher's unions...
http://www.youtube.com/watch?v=Tx723c9uBr0&feature=related
http://www.youtube.com/watch?v=BdEIhJ5jkOw&feature=related[/quote]
Nice find. I watched the first one and only a few minutes later did I realize I may very well be having an aneurism.
According to Payscale.com the range of Middle School teacher's salary is: $36,022 - $52,959 http://www.payscale.com/research/US/Job=Middle_School_Teacher/Salary
I'm going to take the number dead center of those two: ($36,022 + $52,959)/2 = $44,490.50 From what she said she works 183 days a year. Based on a quick Google search the average middle school teacher works between 35 - 40 hours a day. Let's assume 40 - that means 8 hours a day. 8*183 = 1464 hours per year. $44,490.50 / 1464 = $30.39 an hour!
That doesn't count better than average pensions, medical care, the fact your job has unbelievable security and manageable stress levels.
I have an offer from Big-4 that pays less than that on a per hour basis! Seriously, why do I bother?
These people are truly clueless.
[quote=alexpasch]Some great Christ Christie highlights with the teacher's unions...
http://www.youtube.com/watch?v=Tx723c9uBr0&feature=related
http://www.youtube.com/watch?v=BdEIhJ5jkOw&feature=related[/quote]
Love Chris Christie
Frieds, can't wait to see that response you plan on posting. I'd really like an in depth analysis of outcomes from this since it will probably be a great talking point in upcoming fixed income/research interviews.
This is turning into a classic:
Matt Taibbi: How Wall Street Made a Fortune off Alabama Sewers
http://www.alternet.org/story/146424/matt_taibbi:how_wall_street_made…
I kinda found the 60 Minutes piece to be more amusing than relevant... since when has the muni crisis been news?
Not trying to sound like a jerk, but this train left the station months (if not years) ago. Moreover, hasn't Whitney herself been talking this trade for several months now?
I hear you, but as I understand it, things are getting worse. More and more cities are starting to seek bailouts from states. And the 2009 stimulus funds have run out, of which much of it went to state and local governments. Now that there is no political will for additional federal funds to bailout states and municipalities, 2011 could see some serious sh*t at the local level.
Knowledge (among other things) flows downhill...we need the dumb retail investors to call their financial advisors and tell them to sell their muni holdings...
Making money isn't hard if you think about it, just front run the lemmings (or the Fed)
Thank you for posting this. I have 7 principles of state government governance. The third principle deals with state and local pensions and entitlements. Did you hear the piece? $1 trillion in unfunded pension liabilities! We're not even adding in unfunded entitlement obligations, such as Medicaid, which, as of 2014, will be massively expanded thanks to the new federal health care law. Chris Christie is the man. I've never seen a politician speak so matter-of-factly about hard truths. But I do wonder what the ultimate fate of the pension funds will be--like Christie said, they are so underfunded that it doesn't matter if the estimates are grossly aggressive at this time, there's almost no digging out. My guess is that some form of bankruptcy will have to be declared to re-arrange pension obligations.
The 7 principles of good state governance:
1) Infrastructure investment 2) Balanced budgets a. Aspects of the non-essential bureaucracy should be the first things cut, not the last, during times of required fiscal constraint. Essential aspects of government—police, fire fighters, and emergency personnel—should be the last items cut. 3) Ensuring the state entitlement and state and municipal pension funds are funded and don’t pose a long-term threat to the fiscal health of the state 4) Economic friendliness (e.g. limited, transparent, commonsense regulation; simple, transparent tax code with generally low rates of taxation; tort reform; anti-union/pro-right-to-work policies) 5) Economic development focus (e.g. recruitment of top employers) 6) Focus on state university affordability and quality as well as employment opportunities for graduates 7) Development of state natural resources
refer to houston vs. new york...
Texas doesn't have this problem
So, how can I short some UIT's made up of municipal bonds?
I think I'm going to like you here, Matt_SF. Interesting thoughts. Yeah, I'm not sure. On the one hand, the bailouts were massively unpopular and yet they happened anyway because perhaps they had to happen. On the other hand, a huge amount of bailout political capital has been spent. I'm not sure how that's going to play out. Either way, it looks like whoever is in charge at the federal level is going to get blamed either way. Looks like a lose-lose situation to me. Glad I'm still 10 years too young for any executive level government position.
That's a good thing in one regard. But the truly bad thing about being young in modern day USA... or western Europe for that matter... young people will be paying the debts of our Baby Boomer parents until we die.
Guess the Federal Government is trying to squeeze every dollar from everywhere in the world. Expecting wars.
Mitt, I'm working on it (it's 2 full pages already single spaced) so if it's not up tonight, I'll have it up in the next day or so.
Cool - thanks
i have been calling this for awhile now if ppl would have listened would have bad big bank
Chris Christie for President 2012.
I've never seen a politician care so much about what needs to be done and so little about public criticism
There are a few others that are very principled and don't care about public criticism, Ron Paul and Dennis Kucinich are good examples...
Total opposites of this are the Mitt Romneys and John Kerrys...
Im getting pretty sick of the "Blame Wall Street for Everything" song. So a bunch of politicians decide to pay their friends billions of dollars to construct a several hundred million dollar project, they get financing to do it, and now somehow its Wall Street's fault? Wall Street underwrote the debt, where did the proceeds go? Are you kidding me?
The problem is none of the principal decision makers are being held accountable here. They're all playing the victim to the evil bankers. The mortgage brokers, the people buying $500K houses with $30K annual incomes, etc... where are they now? How many mortgage brokers originating fraudulent mortgages are being prosecuted? Bankers are intermediaries. They make markets, they don't make guarantees. Someone wants to buy something and someone wants to sell that same something. They ask each other questions and we get the answers for them. We help them negotiate the terms of that transaction and we advise our client to ensure they can't find the same exact thing down the block for a lower ask or a higher bid.
Americans need to be accountable for their own decisions. For the decisions their elected officials make and the decisions they themselves make.
See: Nuremberg Defense.
^ Very true. Blame lies mostly with the politicians; they're the retards in this deal and most others.
Still, the banks (particularly the big ones that have revolving doors into government and basically can do whatever they want) do a lot of screwy things, but politicians are just as bad. They are one and the same, they suck.
I think the most hilarious thing is that the banks take a lot of flack for times when they are really doing nothing wrong, yet other times when they're screwing Main Street over royally, Main Street is too stupid to realize it.
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Thats a little misleading. Most of the people on that list are superintendents or special ed. teachers/psychologists.
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^^ I remember when I was in college there was a test I took that had a long essay question and the topic was basically bull semen imports/exports between Europe and the US. I thought it was hilarious and took every opportunity to write "bull semen" hahahahaha. (I got an A)
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