Posts belonging to Category Municipal Bonds

Municipal Bankruptcies Rattle the Municipal Bond Market


There is concern growing within the municipal bond market as a result of the recent high profile bankruptcy filings by the California cities of Stockton, Mammoth Lakes, Compton, and San Bernardino. The concern is that bond payments will not be treated as a priority obligation. Municipal bonds have historically had the reputation for safety and […]

Case Reveals How Wall Street Banks Cheated Municipalities out of Billions of Dollars


The former co-head of UBS AG’s municipal-derivatives group, and two ex-colleagues are defendants in a municipal bond bid-rigging case being tried before U.S. District Judge Kimba Wood in Manhattan (“Ex-UBS execs on trial in muni bid-rigging case,” InvestmentNews).

Stockton Bankruptcy Rattles Municipal Markets


In the national news and on the minds of municipal bondholders across the country is the bankruptcy of Stockton, CA. On June 28 the town of Stockton, CA, filed for Chapter 9 bankruptcy protection. This is not the first town to file for bankruptcy with outstanding bonds however its aggressive attitude toward bondholders has those […]

Stockton, California Files for Bankruptcy


Warren Buffett, billionaire chairman of Berkshire Hathaway, Inc., has continued to express concerns about the number of municipal bankruptcies happening around the nation. In testimony before the U.S. Financial Crisis Inquiry Commission in June 2010, Buffett predicted a “terrible problem” for municipal bonds in coming years. A portion of that prediction came true on June […]

Be Careful Investing in High-Yield (Junk) Municipal Bonds


High-yield (junk) municipal bonds have attracted about $5.3 billion of investors’ money so far this year, but some experts think that their party is about to end. The reason for the robust growth is that the yield of junk municipal bonds is approximately 5.2 percent compared with investment grade munis that are yielding 2 percent. […]

The Risk of Municipal Bonds Continues to Rise


State and local issuers of municipal bonds are in trouble, but most municipal bond holders are not ? at least not yet. While waves of default predicted by analyst Meredith Whitney several years ago have not yet materialized, lower revenues and unfunded liabilities are creating a slow-motion train wreck for many state and local governments. […]

Chasing Higher Yields Involves Taking Greater Risk


The prospect of several more years of extremely low interest rates is causing people who depend on interest income to accept Wall Street’s recommendations to purchase relatively illiquid and opaque alternative investments like structured products, non-traded REITs, hedge funds and variable annuities. (“Itchy Investors Ramp Up the Risk,” Wall Street Journal). Regulators worry that the […]

Harrisburg PA Announces Default On General Obligation Bonds


Harrisburg, the capital of Pennsylvania, is set to default on general obligation bonds for the first time. The city of 49,500 is in receivership and the receiver is seeking approval to raise money by selling assets, raising taxes and fees and obtaining concessions from municipal labor unions. That has not yet come to pass, however, […]

Concerns About the Municipal Bond Market Rise


Various well-respected market followers are beginning to sound alarm bells regarding municipal bonds and municipal bond funds. Investors and financial advisers are encouraged to take heed and proceed with caution.

Securities Regulator Alerts the Public About Dangerous Investments and Investment Strategies


The Financial Industry Regulatory Authority (FINRA) recently issued a report outlining is its regulatory and examination priorities for 2012. The securities industry regulator is focusing on conduct and products meant to beat the market that are unsuitable investments for many investors.