Will Municipal Bonds be the Next Bubble to Burst?
Some expets say it may be coming.
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On, February 1, 2011, Meredith Witney, the same analysist that in 2007 was listed as the second best stock picker in the capital markets by Forbes.com, stated "There's no doubt in my mind that you will see a spate of municipal bond defaults" she predicts between 50 to 100 sizable defaults. On February 21, 2011, Jeffery Gundlach, the fund manager who Barron's labeled "The King of Bonds and the manager who has outperformed even legendary Bill Gross in a career marked by genius and controversy," was quoted by Barron's as stating "He foresees a major collapse in the municipal – bond market beyond the declines to date, given the parlous condition of both state and local government finances." On March 2, 2011, The Wall Street Journal quoted Nouriel Roubini, the same noted economist that predicted the housing crash said "Investors can expect $100 billion in municipal bonds to default over the next five years." On April 8, 2011 Bloomberg reports, "Tax-Free Bonds in Year's Worst Slump as Sales Loom." Do You Have Municipal Bonds Or Investments That Hold Municipal Bonds?08/02/11 BLOOMBERG Reports: Central Falls, Rhode Island, whose to is “a city with a bright future,” has cast a shadow acoss the rest of the state by entering bankruptcy. 08/18/11 BLOOMBERG Reports: JEFFCO RESCUE RELIES ON HOSTILE LAWMAKERS A settlement that would let Jefferson County, Alabama, avoid the largest municipal bankruptcy in U.S. history hinges on help from a legislature that so far hasn’t been willing or able to offer it. 08/22/11 Bloomberg Reports: When Ruth Rooney moved in 2005 to a bedroom house in Vallejo, California, near Napa Valley’s wineries, the historic St. Vincent’s Hill neighborhood attracted young professionals and there were few vacancies. Things began to change in 2008 after Vallejo, a city of 116,000 that had lost its biggest employer, the U.S. Navy’s Mare Island shipyard, filed for bankruptcy, said Rooney, year-old marketing consultant. “I see prostitutes, pimps and drug dealers out my front window,” Rooney said in a telephone interview Aug. 5. “There’s two on the corner right now.” Her property value has dropped 70 percent in six years, she said. Nov. 10 BLOOMBERG Reports: Jefferson County, Alabama, declared the largest municipal bankruptcy in U.S. history, capping a more than three-year saga that turned it into one of the biggest casualties of Wall Street's credit crisis. The Chapter 9 filing leaves creditors including JPMorgan, the biggest U.S. bank by assets, facing hundreds of millions of dollars in losses and may revive concern that defaults may rise in the $2.9 trillion municipal bond market. Jan 30, 2012 Investment News Reports: Munis face theat of "super downgrade." Peter Hayes, head of municipals at BlackRock Inc., told advisers at the 2012 Investment Management Consultants Association in New York that he expects super downgrades to accelerate throughout the year. Investors in municipal bonds also will have to consider the effect of likely tax policy changes, which should become clearer in the second half of the year. The ultimate outcome, though, will be decided by the outcomes of the presidential and congressional elections, Mr. Hayes said. |
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YES - I Would Like Up To Two FREE Reports On Muni Bonds That I Am Concerned About. Privacy Note - Your privacy will be respected. Your information will not be sold, shared or abused in any way. Jeffery Gundlach in the 2/21/11 Issue of Baron's "Predicts in the next year or so the apocalypse will arrive." |
It's No Secret That Many States And Municipalities Are Having Financial Difficulties...