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Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  Re: Municipal bonds: A train wreck waiting to ha Date:  12/6/2012  4:22 PM
Author:  ptheland Number:  410678 of 479795

anyone with a bond calculator and a knowledge of financial history knows that investment-grade munis like mine are priced at bubble levels.

There is a new pressure on the demand side of that market which will tend to keep inflating that bubble.

Some here are likely aware that beginning in 2013 there is an additional tax of 3.9% on the investment income of certain higher income individuals. This is not a fiscal cliff issue - it was agreed to as part of the way to pay for the Affordable Care Act.

The IRS recently issued some proposed regulations regarding the operation of this tax. One item is particularly interesting: