(Un)Calculated Risk | by Peter Orr of Intuitive Analytics

4 Ways to Make Killer Public Finance Debt Service Charts, Part 1

Posted by David De la Nuez on Oct 25, 2010

Debt service charts in public finance are as ubiquitous as business cards at a shortlist presentation and date back to before Lotus 123 offered WYSIWYG. Unfortunately, they usually don’t look much different despite just a few improvements in technology over the last 20+ years. But what can you do to make a principal and interest graph sizzle? The answer is *a bunch of stuff* particularly with Excel 2007's new graphics engine. One rule of thumb (and pet peeve of ours): do not ever make your chart in more dimensions than the data.  Debt service is expressed as amount vs time – two dimensions, not three. Three dimensional bar charts, pie charts, etc. just distort the data you're trying to accurately convey. For more details on this, and definitely if you're not already familiar, read from the master of data visualization, Professor Edward Tufte. But back to debt service…

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Issuers BEWARE: Tax risk is NOT in LIBOR Swaps!

Posted by Peter Orr on Oct 13, 2010

The other day I was perusing the swap notes in the financial statements of a big city I won’t name. In it I found a statement in the section on swaps:

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Want to Get Hired by More Public Finance Issuers? Know Your Position

Posted by Peter Orr on Oct 06, 2010

The first word in our company name means we do a lot more than calc pv savings. We often work with investment banking or financial advisor clients to come up with the clearest way to express complex analyses to tax-exempt issuers. Frequently this leads to crafting ways to convey key messages as part of a broader strategy to get hired.  What often surprises me about these discussions is how little people know about their position. Let me explain

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NYT and the 0.14% that Swallowed Your Town, pt 2

Posted by Peter Orr on May 18, 2010

Last week I embarked down a path of trying to get the NYT to correct their errors in an article ostensibly on municipal swaps. This is the second round exchange (of three) with the NYT editors justifying their mistakes in the article, The Swaps That Swallowed Your Town.  My response was simple, though I was forced to use a three number example.
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Refunding Efficiency: Not the Holy Grail of Decision Criteria

Posted by Peter Orr on Mar 24, 2010

Lots has been studied and even reported on the decision criteria involved in pulling the trigger on a public finance refunding. When is the right time? What bonds do I choose? What savings target do I use? The old rule of thumb that present value (pv) savings should be at least 3% of refunded par is taking some criticism which I won't repeat here. Suffice it to say it's a threshold originally conceived by bankers and as such, the bar for a "Go" decision is not very high. I personally think it's age discrimination; this calculation does have a good three decades under the belt...

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NYT and Press: Get Your Facts Straight About Municipal Swaps

Posted by Peter Orr on Mar 10, 2010

"Knit Cap Creates Huge Hangover" is Not a Good Headline  

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The Big BAD Mistake about BABs

Posted by Peter Orr on Feb 19, 2010

"Prediction is very difficult, especially if it's about the future." 

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