According to Moody’s Investors Service, the number of U.S. municipal bond defaults is higher than it was before the economic crash, but it’s still a low number. Our economy has been slow to recover, but it is gradually improving as time goes on. Unfortunately, that hasn’t changed the fact that some cities and local governments are now struggling just to stay afloat.
Moody’s, whose CEO is Raymond McDaniel, said, “Revenue and spending pressures from the sluggish economic recovery, including soaring pension costs, have intensified credit stress faced by local governments.”
But at the same time, the credit rating agency expects that most of these local governments will be able to adjust their budgets accordingly, though there are still a hard few years ahead.
But financially, some areas are looking up. The Dow ended above 15,000 points for the first time this week, higher than it ever was before the financial crisis started. Corporations are, in general, seeing strong profits. And investors are feeling more confident in the market. That confidence will lend itself well, helping the market to continue improving.
The housing market is beginning to recover as well, which many take as a clear sign that things are getting better. Unfortunately, we still have a long and arduous road ahead. But for now, things are looking stable.
The sequester, of course, is still on many people’s minds. A solution must be found, and it is one that only the U.S. Congress can make. Let’s hope that somehow, they can find a compromise and get our federal budget back under control as well.