Comments on: Beware municipal bonds http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: sanserve http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-23288 Wed, 19 Jan 2011 19:37:52 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-23288 Insured, Tax Free, Municipal Bond CEFs Yielding nearly 7%. Interested?

For the second time in recent years, we have a tremendous opportunity in high quality municipal CEFs — don’t miss it!

Of course you should be interested!

There are at least eight reasonable explanations for recent Municipal Bond price weakness — there are at least eight excellent reasons why investors should be viewing this weakness as a buying opportunity.

Contact Steve for a list of ten Closed End Funds to check out for appropriateness.
http://kiawahgolfinvestmentseminars.net/ Inv/index.cfm/18393

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By: tscott3 http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18930 Thu, 30 Sep 2010 19:24:08 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18930 Tax increases will be a forced issue. Then the questions becomes who pays, those who benefited the most or those who benefited the least from lowered taxes.

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By: wcw http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18893 Wed, 29 Sep 2010 20:01:06 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18893 CA’s problem is GOP obstruction of tax increases. The state can easily pay for its debt. So your predictions are not, pace Whitney, analysis but political speculation: that the state GOP is willing to push the state government not just into stress, but also into default.

Me, I don’t see it.

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By: AnonymousChef http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18886 Wed, 29 Sep 2010 16:52:42 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18886 Though I guess in that case maybe — just maybe — the Fed starts buying California bonds. Probably still worth more than the AAA subprime mortgages they bought earlier.

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By: AnonymousChef http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18884 Wed, 29 Sep 2010 16:49:40 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18884 I have to agree with Felix here. With California and Illinois likely first to go, the Feds will have to step in.

Of course, who knows – we might have a Congress that would happily plunge us into the dark ages to avoid giving a bailout in six months.

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By: ckbryant http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18872 Wed, 29 Sep 2010 14:18:43 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18872 “THE mot juste?” Oh boy, does that ever clang. No half-measures in linguistic snootiness, yes? That sort of thing is only for hoi polloi.

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By: Nick_Gogerty http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18862 Wed, 29 Sep 2010 11:57:43 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18862 a look at debt to GDP with state debt added in. http://www.gogerty.com/?p=1438

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By: Publius http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18857 Wed, 29 Sep 2010 03:19:51 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18857 And I’m sorry, Felix, but your comment about insurance is so 2007. Didn’t you hear that the monolines largely went toes-up? And investors don’t trust the ones that remain because their ratings aren’t Aaa and aren’t stable, so there’s not nearly the marketing advantage to having insurance. As a result cities don’t pay for it.

Many issuers have since been refunding their (insured) debt at lower rates with (uninsured) new bonds. Oh, and with lower interest rates, that’s improving their finances. But I bet that’s not in Meredith’s report, nor is the fact that debt service for all state, county, and city/town debt is only about 1.5% of the economy. That figure, by the way, assumes debt retirement, not just interest payments.

But I’m guessing that that’s not in the report, either.

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By: FelixSalmon http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18853 Wed, 29 Sep 2010 01:25:44 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18853 why am I so confident of a Federal bailout of the States? Because California will be the first to go, and it’s TBTF?

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By: Jim_Walker http://blogs.reuters.com/felix-salmon/2010/09/28/beware-municipal-bonds/comment-page-1/#comment-18849 Tue, 28 Sep 2010 23:00:20 +0000 http://blogs.reuters.com/felix-salmon/?p=5554#comment-18849 Before jumping to conclusions it pays to look at the facts.

As of today, according to Bondview.com, there are $2.8 trillion in outstanding muni bonds and 99.7% have not defaulted. That leaves about .03% of muni bond that have defaulted. Of those, most are not safe sector bonds like land use (ie, Florida housing developments) , private activity ie, (Harrisburg Incinerator), Hospital, Casino, Retirement.

Safe Sector bonds like General Obligation, water, sewer, power rarely default. We are only now seeing the outcome of defaults. In almost all cases, the state has stepped into and taken over the finances of the local municipality until they can get back on their feet. Harrisburg, PA. is a good example.

To see a portfolio of muni bond defaults go to:

http://www.bondview.com/reportcard/index  /portfolio/656

Good Luck To All
Jim Walker
www.BondView.com

But this is all just common sense. The best way to see whats happening in the muni marketplace if to

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