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Tue Mar 4th 00:01 AM | Rating: 0 0
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Some Muni Bonds Appear Screaming Buys Here

1. Wall Street investment bank/brokerage lack of liquidity is causing them to pull back financing from some hedge funds, causing those that focus on municipal bonds to sell them- delevering.

2. That same liquidity problem has made the firms decide not to support auction-rate municipals like they usually do to clear imbalances between sellers/buyers, leading municipal issuers to go to the fixed-rate longer-term market to get reasonable interest rates- raising supply and cutting prices of existing bonds.

3. The economy stinks- municipal revenues are going down and reducing the credit quality of the bonds these municipalities issued

4. The bond guarantees many of these municipalities used to get AAA credit ratings and thus lower rates is ineffective now because the bond insurers are in trouble of losing their ratings- the bonds are trading as if they have no such insurance at all.
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