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Subject:  Re: Municipal bonds: A train wreck waiting to ha Date:  12/6/2012  5:42 PM
Author:  crackdclaw Number:  410690 of 538773

But wait -- it gets worse. <snip> That produces some sorry math: Pay the aforementisoned $12,051 for your bond, get redeemed out for $10,000 in 2018, and your "yield to worst," as it's known, is 1.66%. Yechhhh

Train wreck to Yechhh. I understand bonds are viewed as stable, low risk, income producing, widows & orphans type investment. I'm not understanding this potential disaster. A 1.66% return on a $10,000. investment today, that is cashed out in 2018, perhaps not what brought you to the buying table, but one can be hurt far worse with other investments.

With the headline of train wreck, I thought there was additonal news on muni bond defaults. Am I misreading Sloan & Yoda? An investment today of $12,051. for a $10,000. bond and if (when) called in 5 years ends up returning ALL of your principal and a net yield of 1.66 over those 5 years? Call it Yechhh, but all in all, still some degree of safety vs other investments.
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