Bloomberg.com (7 Jul 10)
Allstate Corp. Chief Executive Officer Thomas Wilson said a surge in borrowing by U.S. state and local governments may trim the value of municipal debt holdings, and called for political leaders to cut costs.
“Government borrowing is way out of control.” Wilson, 52, said yesterday in a Bloomberg Television interview from Aspen, Colorado. “We need to get our house in order.”
Wilson said concerns about budget deficits and funding shortfalls will probably lead to market-value declines in the municipal bond market rather than widespread defaults. Allstate, the largest publicly traded U.S. home and auto insurer, cut its municipal-bond portfolio in three straight quarters through the end of March, reducing its holdings to $20.1 billion from $23.1 billion as of June 30, 2009. The insurer hasn’t released second- quarter results yet.