I’ve traveled around, to different places, I see a lot of businesses closed, boarded up, this MUST impact the local municipal treasuries with sales down. If it happens at the State Level, it has to show up sooner or later at the City Budget level. Hang on for a tough ride. I was with a group of 90 year old men, sitting for coffee at a senior citizen’s retirement home, they compared their Great Depression with the Obama Depression, they said we haven’t seen anything yet.
By the time QE VI comes around, no one will notice this stuff.
Jeffrey Gundlach who is now the top bond investor in the country or world is predicting defaults anywhere from $10 to 30 billion. He said that if it is modest amount ($10 to 30 billion) that it will still affect all muni bond prices sending them down.
He is planning on scooping em up and also bond funds when they lose 50+%.
Overblown? Funny, isn’t that the same thing they said about predictions of default when the Subprime crisis was in its early stages?
It would be laughable if it were not criminal. They ALL KNOW with certainty that munis are headed for the ash heap of history.
A misprint, I presume.
This is one fact that seems to get lost in all the discussion of what Governor Walker is doing in WI. If muni bonds default, because the state essentially is bankrupt, do these cretins in the unions not know that their entire pension and retirement benefits are at risk?
Just like the UAW drove the auto industry into oblivion by its incredible and stupid greed, public sector unions are going to do the same thing to their employer (the state/taxpayer).
In a sense, ever default is a special situation that can be explained away. (Methinks Lucy will have a lot of "'splaining to do". The technical factor that was not mentioned is that projected local and state revenues will be insufficient to service much public debt.