Article

2010-02-20 Economy

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Posted by Fred 2010-02-20 00:00|| || Front Page|| [3 views ] Top

#1 Though it will have some impact on munis, I question how much. Most muni bonds are both opaque and at non-command levels of government, such as transit and turnpike authorities, water districts, medical centers, counties and utilities, and school districts.

And while granted these have some level of interactivity with large cities and State government, they often have considerable insulation as well.

Often, the difference is between muni bonds that are voluntary or involuntary. That is, if an organization cannot function without bond issues, they are very dependent on State credibility; but if they have a choice to issue bonds for future improvements or not, during an economic downturn they wont.

Some bond issues can just be made, but others require a public vote.

So what happens to the muni bond market as a whole if say, California goes Zimbabwe? While it will unsettle the market, certainly, in the mid term, it might actually help the bond market, by eliminating a dead weight competitor. More money for everyone else.

Posted by Anonymoose 2010-02-20 08:44|| 2010-02-20 08:44|| Front Page Top

#2 .....uncertainty for everyone from municipal employees to bondholders.

Let me quickly dispel the... "uncertainly." You will get less! Possibly nothing at all.

Posted by Besoeker 2010-02-20 09:07|| 2010-02-20 09:07|| Front Page Top

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