Notes on the Municipal Bond Market

How about some financial news? I’m dipping heavily into John Wake’s territory with this one but far be it from me to give my Canadian friends the chance to tell me I’m not paying attention to economic-type stuff.

From the Bloomberg news wire …

Investors withdrew about $1.2 billion from U.S. municipal-bond mutual funds this week, the 13th-straight period of withdrawals, Lipper US Fund Flows said.

Outflows have totaled $24.8 billion since mid-November, according to data released yesterday by Lipper, a Denver-based research company. The $1.1 billion that investors took out in the week ended Feb. 2 was the least in two months, Lipper said.

“Outflows are beginning to subside,” said Justin Hoogendoorn, director of capital markets at BMO Capital Markets in Chicago.

In short, there’s concern (as pointed out to me by one of my Canadian clients) that the municipal bond market here in the states is on the verge of collapse because of possible defaults caused by our still struggling economy. This apparently started with a segment on 60 Minutes …

Some investors exited the $2.86 trillion municipal debt market amid a prediction of municipal defaults amounting to “hundreds of billions of dollars” by Meredith Whitney, an analyst who correctly projected Citigroup Inc.’s dividend cut two years ago. She spoke Dec. 19 on CBS Corp.’s “60 Minutes.”

Lest you think the financial news has caused me to lose the sarcasm you’ve come to know and love, I’ll say this … I’m not at all questioning Ms. Whitney’s prediction as she’s looking at this more closely than me. Having worked in the financial world for eight years, though, the statement “correctly projected Citigroup Inc.’s dividend cut two years ago” in an effort to prove authority is damning with faint praise, much like saying a roulette player “correctly wagered $1,000 on 17 two years ago.” Unless, of course, Citigroup is the only stock on which she’s predicting dividends.

Get my drift?

In any event, this now has struck my fancy – not easy to do in the seven years of CNBC-free bliss I’ve enjoyed since leaving Schwab – so you may see more news here as it comes.

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at

1 Comment

  • BawldGuy 7 years ago

    A few years ago I correctly predicted you and I would be able to simultaneously enjoy the mobile scenery while cleaning our plates at World Famous. Who knew?

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