If you’ve been reading my blog for the past 2 years you’ve been hearing me talk about the slow disaster that is Europe and our municipal governments.
We’re now seeing the worst falls in Municipals since Lehman’s collapse back in September 2008. Ouch! I also say that the worst is before us, not behind.
To do: Watch your municipal holdings and know what your exposure is!
Ireland has a bailout (thank you EU and IMF) and now the yields for Portugal, Spain, and Italy are going through the roof.
This does NOT bode well for the rest of the PIIGS, Europe, and the Euro.
To do: What’s your exposure to what I think is the next big collapse?
I’ve been warning about the municipal bond market for some time now.
I think the problems are starting to hit and 2011 will be a big year of reckoning.
Look at the chart to the right. Ugly.
Why is this happening?
There’s the looming end of the Build America Bonds program, questions about how state and local governments will manage their debts, and the impact of huge pension and health care obligations that seem unsustainable.
This week’s diatribe is about off-balance sheet accounting and alternative financing.
I’ve been approached multiple times in the past month or two about investment opportunities funding some activity outside of the normal funding channels (banks or equity financing).
This leads me to wonder how much lending is happening in our economy this way and if it’s under the radar. I don’t like the sound of it.
