Best of the Bond Market for April 12th, 2012
Today’s Top Story
Article by @catelong
CNBC’s Over Simplified Muniland Coverage – Our Take: Yesterday Alexandra Lebenthal who runs a major municipal bond brokerage shop went on CNBC and basically said that credit risk is not really a factor in the municipal bond market unless you really get out into the high yield stuff. Today popular municipal bond journalist Cate Long came out in her muniland blog with a pretty scathing attack on both CNBC and Lebenthal which is summed up in the paragraph below:
“Their market outlooks are also antagonistic: Whitney thinks muniland will soon collapse from defaults, and Lebenthal thinks everything is rosy and that municipal bonds pose few problems. I don’t think either of them is that deeply immersed in the municipal bond market. They may be good for an explosive soundbite, but their views aren’t all that accurate”.
Although not mentioned in the article, the first swing in the battle of these two bond market queens was actually thrown by Lebenthol herself. In a Martch 12th interview Lebenthal came out with highly favorable comments on Puerto Rican Muni Bonds. Although not addressed directly in the interview this was almost certainly in response to another article Cate had written 4 days earlier entitled Puerto Rico is America’s Greece. While we will let our readers decide which side to take here we do give the “backed up by facts” edge to Cate.
More on This Story at Learnbonds:
How did a Financial Blogger Wound a Governor’s Pride?
Is Meredith Whitney Right?
Why Meredith Whitney Was Wrong on Muni’s
Today’s Other Top Stories
Tweet and Article from @NewsfromIN
Why Muni Bondholders might take it in the teeth after all Our Take: Article makes a point which we hadn’t thought about which is that if a couple of the high profile municipal bond market defaults in progress currently end up working out well for the municipalities it may tempt others. This sums it up:
“If these issuers come out of their situations in better condition, it could encourage other stressed municipalities to follow suit. “If some of these entities are successful in restructuring collective bargaining agreements and paring their debt, it may become more acceptable for others to try — and we’ll see more bankruptcy filings,” Mr. Dubrow said.”
Article by The Financial Lexicon
Building a 7% Fixed Income Portfolio Our Take: The first in a great series of articles which points out that it is still possible to build a 7% fixed income portfolio even with today’s low rates, but you have to be careful of how you do it. Read the articles for more.
Other Interesting Links from the Day
Oppenheimer Quarterly Municipal Bond Market Report
Historical empirical evidence suggests that issuer-pay credit ratings are higher than investor-pay ratings
2,700 companies are collecting state income taxes from hundreds of thousands of workers – and are keeping the money with the states’ approval
STOP TRADING: Legendary Bond Manager Says Get Into Stocks
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