For your project, the goal is to produce a piece of written analysis? that could be submitted to an outlet for financial commentary.
Quality analysis includes several key components:
1) What is the question?
2) Why is it interesting?
3) How do you answer it?
4) What is your conclusion?
For part (3), you are expected to collect data? and provide? original analysis?.
During the quarter, we will be working with Benzinga.com, a financial news firm. My goal is to help several groups publish their work (online) with Benzinga.
Topic: Chicago Debt (Are we on the right path?)
-Current restructuring process
- Borrowing at a lesser rate than current outstanding debt
- Low interest rates are favorable
- 23B in 2015, 35B in 2016, up to 68B if accounted conservatively
-Pension funds (Police, Teachers, Firefighters, Laborers)
- Majority of Chicago's debt obligations
- Risk of union strikes if not obligated
- Stopping the practice of pension funds
- CPS
- City is urging teachers to match 7% of salaries to help pension funds
- Offering a yield of 8.5% (could compare this to other cities)
-Current Chicago Bond market
- Ratings (BBB and below)
- Risks
- Underwriters (Banks, Local investment?)
- (40.6%) General Obligation Bonds are not translucent
- Most traded? Maturity date? (CUISP?)
- (32.6%) O'hare Bonds
- Why they provide better returns
-New ideas for Debt
- City work projects, etc...
- Improve Credit ratings
- The firms that underwrite the debt
- New legislations to reform pensions.