Sunday, March 22, 2009

Municipal Bond Red Flags

Red Flags That Muni Investors Can’t See

INVESTORS are the obvious losers in this setup. Especially at risk are individual investors, according to a recent study by DPC Data.

That's pretty much par for the course.

Obviously, when evidence emerges that a debt issuer is under stress, one would expect the price of its bonds to fall. And yet hundreds of trades of exactly this kind of debt were priced at par or higher, which Mr. Schmitt finds troubling.

Other interesting details emerge in his study. For example, October was the biggest month for sales of distressed bonds to customers at par or premium prices. And 41 percent of the 667 purchases in distressed bonds appear to have been made by small investors, indicated by the size of each trade — $50,000 or less.

What could I possibly say to do this justice?
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4 comments:

  1. AnonymousMarch 23, 2009 at 12:52 PM

    Stag,

    You really need to get up and go to church in the morning if you are going to "invest" in this sham eCONomy. Every part of it is diseased.

    The fed is bailing out fraud and foolishness across the board.

    ReplyDelete
  2. Stagflationary MarkMarch 23, 2009 at 4:01 PM

    mab,

    You really need to get up and go to church in the morning if you are going to "invest" in this sham eCONomy.

    Think London.

    In London there is a man who screams when the church bells ring. - "The Descendant", H.P. Lovecraft

    Oil trades around $54 on stock market rally
    http://www.google.com/hostednews/ap/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD973VOSG0

    In London, Brent prices rose $2.25 to settle at $53.47 on the ICE Futures exchange.

    ReplyDelete
  3. AnonymousMarch 25, 2009 at 8:38 AM

    Stag,

    A different look at CPI:

    http://en.wikipedia.org/wiki/Committee_on_Public_Information

    http://en.wikipedia.org/wiki/Edward_Bernays

    The engineering of consent is the very essence of the democratic process, the freedom to persuade and suggest.
    – (Edward L. Bernays, "The Engineering of Consent", 1947)

    Engineering of consent - to what end?

    ReplyDelete
  4. Stagflationary MarkMarch 25, 2009 at 11:56 PM

    mab,

    From your link...

    ...buy war bonds...

    I bought I-Bonds! I did! I did!

    The government is still trying to figure out a way to get me to stop buying them. Sigh.

    This is clearly NOT the war our fathers fought.

    ReplyDelete