The risk of the investment's default is supposed to be compensated by a high coupon. Investors--even greedy and risky ones--haven't had to take into account an unstable and crony-favoring interpretation of the law. And, they shouldn't have to in a land where the rule of law exists. Well, no more.
Watch where rates go now for municipalities that get into trouble--and those rates will be so high they will accelerate the slide into bankruptcy.
Bye bye, Rule of Law (voluntary contracts)........
Makes you wonder if Americans will ever wake up and see how badly they are being shafted paying former government employees to do nothing until they die (all while having to pay for at least one and possibly two replacements). It’s madness. Why shouldn’t government employees save and invest like the adults who currently get soaked to support them? If current pay rates, sans pension and benefits, are beneath them, then let them take their talents back into the marketplace. Might as well forget the bond markets, unless you’re connected.