A week ago a very smart investment manager I met was discussing some opportunities he was considering for deploying assets. One thing he pointed out was that the municipal bond market had sustained a lot of collateral damage from the subprime driven credit crisis. Bloomberg today has this article on the same topic:
By Michael Quint and Jeremy R. Cooke
Dec. 19 (Bloomberg) -- Wall Street's three-year love affair with debt sold by U.S. states and cities is over.
Municipal bonds, whose returns trounced Treasuries and corporate debt from 2004 to 2006, are headed for their worst year since 1999, according to Merrill Lynch & Co. indexes. They may remain laggards after securities firms reduced their holdings during the third quarter by the largest amount in at least 12 years, data compiled by the Federal Reserve show.
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