No. of Recommendations: 1
Charlie said.....

"I found these snippets interesting, because they parallel the prep work I’ve been doing for a couple months now, trying to learn the muni market, so I’ll be ready when the buying time comes."

Then quotes from the article....

"Among other things, it expects to scoop up closed-end municipal-bond funds in the next year or so when the predicted apocalypse arrives, driving fund prices down, he says, to as little as 40% of net asset value."

If closed end muni funds sell for 40% of NAV...I'll be buying as well. I certainly wish for nothing bad to happen...but closed end muni funds selling for 40% of NAV would be a gift IMHO. Wonder what kind of CY that would equate to? Hard to know.

Hmmm...$2.7 trillion muni bond market....defaults of $10-$30 billion. That doesn't seem like enough defaults to cause a panic...even amoung weak handed individual investors and leveraged closed end muni funds. $30 billion in annual defaults in a $27 trillion market only equates to 1.11%.

If I kind find muni bonds of "solid" credit quality offering a 7.2% CY (10% taxable equivalent for a 28% federal tax bracket), I'll be investing all of my cash. If prices get even better, I might even consider a prudent amount of leverage (if there is such a thing).

Only time will tell....
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