Bond market performance has gone from bad to worse. The month of May was bad; June even worse. Prices of longer-term bond funds have plunged, primarily in the past eight weeks, leaving municipal bond dealers and longer-term municipal bond portfolios down about ten percent for the period. (more…)
Posts Tagged ‘Municipal bond’
On The Right Track
In an era of seemingly low to no interest rates, we see an increase in opportunities in municipal bonds. Despite continuing Quantitative Easing by the Federal Reserve, asset prices are weakening, yields are rising and long-term assumptions should be questioned. (more…)
Wash, Rinse, Repeat
Stocks are cheap! Compared to Bonds, Stocks are cheap, but then again, everything is cheap compared to Bonds. This is the narrative driving Stock prices to multi-year and even all-time highs. Enjoy while you can but this narrative has no legs, despite the desires of all the central banks on the planet. (more…)
No, It Won’t Be Like This Forever
Sure short-term interest rates are near zero; nothing new here. But the good news, albeit great news, is we continue to find worthwhile, short-term municipal bonds. In a world of generic, too-big-to-fail, debt by the billions, you can thank a very diverse, too-many-issuers-to-count municipal bond market for these opportunities.
It’s The Fed, Unfortunately
Looking back over the past year the defining point for the markets was Federal Reserve Chairman Ben Bernanke’s missive in September. Asset prices peaked with Ben’s pronouncement. Animal spirits are now dissipating. The reversal eventually sent Municipal Bond prices to their high November 30th, along with my proclamation that Municipal Bonds were in bubble territory, heading for a big fall.
The Madness of Crowds
With the countdown clock to the Fiscal Cliff now inside thirty days one does not need my monthly missive to stir fear, panic and depression. Washington has you covered this month. Therefore, I will take a more optimistic stance: I believe your Cash and Bonds are well positioned for the current and future environment. (more…)
QE3, Municipals and You
Federal Reserve Chairman Ben Bernanke kicked off Year Six of the Financial Crisis by announcing a mortgage bond buyback scheme dubbed historic as the Fed is now focused on the employment woes of the nation. Will it work? One only need look as far as a Federal Reserve Bank president, Charles Plosser, to find a cogent critic. Thank goodness this is America and one can voice dissent. (more…)
Municipal Bonds Are Unique
Municipal bonds have been in the press more often lately. The Federal Reserve recently published a report on defaults in the municipal market precipitating arguments as to what constitutes a default as well as what constitutes a municipal bond. Such arguments bolster our position that while municipal bonds in the aggregate total almost $4 trillion, the marketplace is highly fragmented and the marketplace is a collection of tens of thousands of unique financial instruments too numerous to count. (more…)
Bankruptcy: When The Can No Longer Can Be Kicked
As the financial crisis enters its sixth year we find municipalities and their bonds increasingly in the news. Municipal woes appear to be on the rise. Therefore it is important to realize how unique each municipality is as well as how unique all of their municipal bonds can truly be. There is no such thing as a generic municipality nor is there any such thing as a generic municipal bond. Every municipality is different. Every municipal bond is different and therein lies the opportunity for you, the municipal bond investor.
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