Posted on 01/14/2011 2:51:20 PM PST by FromLori
It's hard to look at this chart, and not have your heart skip a bit of a beat.
For three days now, munis have tanked, and this is the worst one yet.
(Excerpt) Read more at businessinsider.com ...
DAMN
With the ticking pension timebomb, I wouldn’t touch munis with a 10 foot pole.
Who was critical of Meredith Whitney?
It wasn’t if but when.
Wink, wink everything is just fine...
CPI And Retail Sales: Oops
http://market-ticker.org/akcs-www?post=177313
Hey! Here's an idea: Hold local spending in check for a change.
I think some of the investor’s might be surprised.
SEC Probing Disclosures Of Muni Bond Prospectuses
http://www.zerohedge.com/article/sec-probing-disclosures-muni-bond-prospectuses
Individual municipal bonds are down 15% from mid November.
This price action reflects the reality the new GOP Congress will not be handing out blank checks to the states that have been overspending.
This is the only way to force politicians to deal with reality. Make them pay more to borrow money.
Yes so long Build America Bonds
SEC Probing Disclosures Of Muni Bond Prospectuses
http://www.zerohedge.com/article/sec-probing-disclosures-muni-bond-prospectuses
I am so glad that we got our daughters college fund out.
It had been in muni’s.
There will be some excellent values in muni bonds. People are running scared right now and are dumping their muni bonds and no one is buying.
Already it is easy to buy top quality 6% muni bonds. We might see 7% muni bonds before summer.
If you live in a state with an income tax, then muni bonds at 6% can be equivalent to taxable bonds at 8 to 9%.
The yields are starting to get interesting, IMO. I think there will probably be more pain, because the headlines and negative returns are leading to a snowballing redemption downward spiral, and other than retail there isn’t a natural investor base (which is why muni issuers loved BABs). But with high-quality issuers paying tax-exempt yields of 5-6% for long-dated debt, I’m starting to take a closer look.
Don’t get me wrong — there are profound challenges facing the state and local govts, so I would tend to steer clear of GO bonds, with the exception of high-character states like Texas. But bonds backed by the revenue of the NJ Turnpike, or some of the local bonds that are really corporate bonds in disguise, are starting to look attractive (as they say, gentlemen prefer bonds...)
I’m glad for you that would have been devastating good thing you are keeping up on the news.
Detroit and hundreds of cities east and south are proof that locals will ride values down into the ground. “Last one out with a pension is a loser!”
What exquisite timing! The radio ads touting muni bond funds as safe, profitable investments have just started.
Some of the selling pressure may be coming from the muni mutual funds who were reaching farther down the quality ladder into the second half of last year in an effort to boost yield. They are now getting their faces ripped off for such short sighted stupidity.
Junk bonds are always junk.
Which dictator is that?
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