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Ray Dalio Says to Abandon Bonds for Cash Image Photo by Harry Murphy/Web Summit via Sportsfile (Wikipedia)

Ray Dalio Says to Abandon Bonds for Cash

Bloomberg is reporting today on statements made by Ray Dalio, the owner Bridgewater, of the world's largest hedge fund, in Singapore yesterday. Dalio is reported to have said, "Temporarily, right now cash is good." And,... Read →

Municipal Bond Update - 2000 May Be Good Roadmap for Direction of Muni Market

In 2000 was the last time we had a census and we had similar types of high expectations, high estimates for what the non-farm data would be when it was released in June. Interestingly enough, 2000 was also a weak period for the US economy or at least there was certainly a great deal of ambiguity. In 2000, municipals and Treasuries rallied fairly significantly, albeit from much higher absolute levels, but I think that you get so much ambiguity around this non-farm data, it's hard to read the employment reports during the summer months as the census data is adjusted for in the numbers.

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As you find yourself doing your taxes and cursing while trying to find any conceivable deductions, it is interesting to take a look at the huge discrepancies between state tax levels.

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John Moorlach said in 1994 that Orange Country was headed for bankruptcy and six months later they files. Now, he says that at least 10 municipalities are headed for trouble in 2009. Moorlach, who is now chairman of the Orange County... Read →

As markets continue to gyrate, corporate and muni bonds may offer steady and in some cases extraordinary returns. Depending on the risk you are willing to take some corporate bonds yield 18%+. Munis can offer 6.5% tax free.

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The municipal bond insurance market took a beating during the financial crisis, virtually disappearing. Now the question everyone is asking is, do we need it?

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Record low interest rates and investor appetite for safe investments has led to the creation of a new bubble - the bond bubble. In the first 10 months of 2009, investor plowed $313 billion more into bond than they took out. Commenting on... Read →
California thirty-year general-obligation munis are yielding close to 5.7% and more than 9% when the tax advantages are calculated. The question is, are they safe? Governor Schwarzenegger insists they are. Brett Arends from the Wall... Read →
Harrisburg, the capital of Pennsylvania is considering bankruptcy protection as it faces debt payments it can't meet. This comes as many believe that municipal bond defaults will grow as cities and states face rising debt costs and... Read →
Marc Faber, the editor of a newsletter called the Gloom, Boom, Doom Report did an interview with Bloomberg in which he called US Treasuries junk. Well, what can you expect from someone who writes about gloom and doom? The quote... Read →

Municipal bonds had an excellent week last week as, despite the flight to safety in Treasuries, broad-based "de-risking" in some asset classes, and more rhetoric about just how bad municipal issuers are (the latest, "Municipals The Next Financial Land Mine?"), muni yields trickled lower.

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A slow new issue calendar, uncertainty over whether or not municipals are at risk from a sovereign contagion, low nominal yields, underperformance versus Treasuries, more muted fund flows, tighter evaluated credit spreads, and tax-related selling have undermined confidence in municipal prices recently.

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Proposed legislation from Republican Senator Judd Gregg, and Democrat Senator Ron Wyden includes a provision that would end the tax deferral on savings bond income. The overall goal of the legislation is to simplify the tax code and close... Read →
Yields on Treasury notes and bonds rose on Friday as investors reacted to better than expected employment figures. The rise in yields dropped bond prices. But as the charts below show, the moves are hardly anything to get excited... Read →
Build America Bond issuance hit $78 billion at the end of February according to the Treasury Department. BABs not comprise over 20% of the municipal bond market. States and municipalities did $7.2 billion in Build America Bonds in... Read →