In very encouraging news for the municipal bond sector, the amount of insured municipal bonds jumped 60% in the first quarter of 2012 from a year ago, to $3.7 billion. One of T&T Capital Management's core positions is in Assured Guaranty (NYSE:AGO) which is really the only bond insurer writing new business.
The only thing slowing down the growth in this market is the irresponsible changing of the credit rating guidelines that have plagued the industry with uncertainty. Municipal defaults such as those that occurred in Harrisburg and Jefferson County have proven the importance of municipal bond insurance for investors. One of Moody's arguments for a potential downgrade is the lack of demand in the industry which clearly seems inaccurate when you read this article.
Disclosure: I am long AGO.