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.
The reason I include this article is to reinforce my belief that Municipal Bonds are something to avoid.
State pensions are in a world of hurt, and you and I will be subsidizing them in the future. Do you think this will cause some slowdown in state revenues and resources? Of course.