No. of Recommendations: 6

Thanks for the post regarding Ms. Whitney's segment on Squawk Box. This is a topic of serious interest to me as I have been slowly accumulating munis for roughly two years. I saw a couple of minutes of the segment while I was getting ready for work. I don't know why I didn't hit record on the DVR.

Anyway, I did hear Ms. Whitney make a couple of additonal points that were key to her analysis.

(1) The federal assistance that states have used the past couple of years to fill massive budget gaps will be ending (this year I think)

(2) The financials for municipalities are extremely "dark" and out of date. She seemed to imply that the lack of good disclosure probably means municipal finances are worse than can be easily detected in the dated disclosure documents.

Based upon my own modest level of experience with muni disclosures, I concur with Ms. Whitney's comments regarding the limited disclosure and dated nature of most muni financial disclosures.

FWIW, I have come across a few muni debt issues that were issued for the specific purpose of funding retirement obligations. Each time I saw such debt issues, I immediately ended my research and moved to other pursuits based upon the belief that borrowing money to fund retirement obligations is a very bad sign.

For the most part, by accident I have avoided the purchase of GO type state and large city muni bonds as their yields are typically quite low. The result has been that a majority of my muni purchases have been revenue bonds. I have grown to like revenue bonds because they typcially carry much better yields and while the revenue stream supporting the debt service is limited it is also typically a managable exercise to evaulate the credit.

A significant percentage of my muni holdings have also ended up being bonds guaranteed by strong S&P 500 type corporations that have managed to issue tax advantaged debt to fund things such as air emissions reduction equipment, re-cycling equipment, and other pollution control related type equipment. These tend to be very small, illiquid debt issues but they typically offer a very good yield and the debt service is often supported by a corporation with a very good balance sheet.

I would love to see this message board spend some time of muni bonds.
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