Posted on 03/01/2008 8:56:21 PM PST by grey_whiskers
About a month ago, I wrote a piece entitled Municipal Bonds The Next Shoe to Drop?, which highlighted the asset class I thought was in the most danger: municipal bonds and the municipal bond closed end fund space in particular.
The ARS (Auction Rate Security) market has frozen up since then and the municipal bond market itself has frozen up as a result of insurers like MBIA (MBI), Ambac (ABK) and FGIC’s business models being brought into question. Add to the mix a slowing economy and falling tax receipts as a result of the real estate debacle (which is now spreading to commercial real estate) and you have a recipe for disaster. Yes, I know disaster is a powerful word, but I truly see it on the horizon for the municipal bond market, particularly as it relates the ARS of closed end, levered, municipal bond funds.
(Excerpt) Read more at biz.yahoo.com ...
Whaddya think?
Cheers!
I think some muni's last week were approaching taxable equivalent yields of stock market returns. Smart money was buying. Those cheap prices won't last.
Whaddya think of the titanic?? : )
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