Tag Archives: Municipal Bonds

Overcoming the massive muni defaults

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We tend to consult with our friends over at FMSbonds, Inc. quite a bit here at KriKnows. Not only are they knowledgeable in municipal bonds, but their opinions are often interesting — at least to us.

Last month, James A. Klotz of FMSbonds took a look back to Meredith Whitney’s “infamous predictions of massive muni defaults” from a few years ago.

“’I expect multiple municipal defaults to trigger indiscriminate selling, which will prompt a federal response,’” Whitney wrote in a Nov. 3, 2010, Wall Street Journal op-ed piece.

Of course, Whitney’s prediction wasn’t entirely accurate.

“The selling did happen, of course. But investors who heeded her forecast sacrificed billions of dollars when prices rebounded. The defaults never happened, the federal government never got involved—in fact, prices soared as yields on municipal bonds tumbled to historic lows,” writes Klotz.

Klotz goes on to explain Whitney’s backlash a bit more in depth. Head over to the FMSbonds website to read on.

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Is the municipal bond market getting healthy?

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If you consult with the “municipal bonds specialists,” FMSBonds, Inc.,  you’ll find the most breaking and relevant muncipal bonds news around.

So, what is the latest news to leak from the FMS camp? Well, it seems like the municipal bond market may be getting a clean bill of health.

“A steady, if unspectacular stream of recent news items that indicate the municipal bond market – bashed almost gleefully by doomsayers a little more than two years ago – is getting healthy,” writes James A. Klotz, FMSBonds columnist.

Though, you should know that despite some promising signs, there are still a few threats that remain.

“It’s not all clear skies for state and local governments. Many still face underfunded pension obligations. Health-care costs may rise and there is a threat of cuts in federal aid. Rating agencies are expected to downgrade a number of issuers this year, and some efforts aimed at reducing or eliminating the tax benefit of municipal bonds remain,” writes Klotz.

Head over to FMSBonds.com for the complete story.