Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

First LIBOR, Now Munis - Fixed Income Under Fire

From the NYT:

Yet another key benchmark in the financial industry is under scrutiny.

Attention has swung to a set of benchmark interest rates that help determine how much cities and states pay to borrow money in the bond market. The scrutiny of the Municipal Market Data, or M.M.D. index, comes on the heels of revelations that a broader financial industry benchmark, the London Interbank Offered Rate, or Libor, was manipulated by banks before and after the financial crisis. Libor is used to help determine the costs of products like mortgages and credit cards.

Thomson Reuters, which owns Municipal Market Data, said on Monday that it "has been involved in discussions with regulators" about the rates, which influence the prices of bonds and derivatives in the $3 trillion municipal bond market.

The company released the statement after the municipal bond industry's self-regulator, the Municipal Securities Rulemaking Board, said that its board was "concerned about the transparency" behind the creation of a few indexes used to set prices in the municipal bond market, the most important of which is the M.M.D. index.

The M.M.D. rates influence a much smaller market than Libor, but it is one that is crucial to how cities and states across America borrow money to maintain roads and bridges and provide essential services such as public education.

The rates are compiled and issued each afternoon by Thomson Reuters using a proprietary method that includes input from banks that buy and sell municipal bonds, industry participants said, though Thomson Reuters does not publicly explain its method.

Really? The muni market might be subject to manipulation? No way. Now how will they put points in the bonds?

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.