Municipal bonds suffered a remarkable sell off in the last two weeks. Is this the top in Muni bonds and the beginning of a long-term rise in interest rates?
Here are two girls with very different opinions on the matter:
Meredith Whitney Advisory Group is now predicting dramatic declines in US home prices, large layoffs at US banks and widespread defaults in the municipal bond market: Link Video FT
but Bond Girl offers a very different explanation :
Some thoughts on the muni market
and on a different issue Bond Girl wrote:
At the risk of seeming petty, I am going to write yet another post slamming Meredith Whitney. If you are patient, however, you will find it is not really about Whitney at all. So… Be patient.
You likely recall that Whitney had all of the talking heads on financial news programs captivated back in September when she announced that, after two years of research, she had produced her own ratings for the largest 15 state credits in the muni market. She said her firm had prepared a 600-page report revealing that some states were likely to default on their obligations and would need a massive federal bailout. The report, naturally, was made available to clients, but was not published (and therefore not able to be vetted) – yet this did not stop various tongue-waggers from assuming that because the report was reputedly long that it also represented good research.