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The bond insurers are up 5-6x from their lows of a few months ago, but it is easy to envision a situation where the current credit crisis results in widespread muni bond failures and the insolvency...
Warren Buffet has stepped in to "help" the monoline bond insurers. This help comes with a pretty big price though and it's doubtful the insurers will agree - for now.
It used to be that one sure way to put away chunks of money safely and enjoy double or triple tax free income was to invest in municipal bonds. Sure, you paid a slight premium to buy triple A...