Comments on: MuniLand Snaps: March 7, 2012 http://blogs.reuters.com/muniland/2012/03/07/muniland-snaps-march-7-2012/ Bridges, budgets, bonds Mon, 24 Nov 2014 00:29:08 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Cate Long http://blogs.reuters.com/muniland/2012/03/07/muniland-snaps-march-7-2012/comment-page-1/#comment-747 Thu, 08 Mar 2012 00:59:24 +0000 http://blogs.reuters.com/muniland/?p=8156#comment-747 Excellent explanation Bob. Thanks for sharing it.

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By: RNelson http://blogs.reuters.com/muniland/2012/03/07/muniland-snaps-march-7-2012/comment-page-1/#comment-746 Thu, 08 Mar 2012 00:47:18 +0000 http://blogs.reuters.com/muniland/?p=8156#comment-746 Cate,

Supply is just starting to get ramped up after the Jan/Feb. lull. Keep in mind that the visible supply figure is forward looking, so that is a tally of the upcoming deal pipeline looking out about 6-8 weeks max. Also note that those ratios in 2011 were influenced not only by muni supply, but also Treasury rates which were falling precipitously in the middle of last year. The main point I’m trying to make in that chart is that ratios are still relatively low, and could move quickly higher if forward supply remains elevated as played out in the middle of 2011. History is especially likely to repeat itself if the Fed kicks in with some variant of QE3 which pushes Tsy rates lower yet again. Demand has been good in early 2012, but aside from mutual fund cash flows (which have been very positive in recent weeks) most other demand is seasonal due to coupon/principal reinvestment and after propelling buyers in Dec/Jan, this component of demand won’t kick back in again until June/July which is another heavy reinvestment period.

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