thinking ahead

An In-Depth Look at Municipal Bond Insurance

Municipal bond insurance is nothing more than a non-affiliated company monitizeing the S&P/Moody's rating systems. It was a brilliant deal for the insurers (not so good for the borrowers or lenders) until they screwed it up. Now new companies like Berkshire will rebuild and repeat the same money machines. As a note to investors: take the yield. The "insurance" is not worth it. For one thing, most (>75%) tax-exempt bonds are refunded, and thereby go immediately to Aaa/AAA.