Always comes back to debts and banks, and whom works for them and profits by them.
Please see: Barney Frank Benefited From State Debts
The WORLDS SAFEST and MOST LUCRATIVE INVESTMENT?
Why, the 'murkn s***-eater, 'er, taxpayer!
"Not the same old municipal bond market" by Mark Jewell, Associated Press | July 19, 2009
When veteran money managers are finding one of their favorite segments of the market is potentially more lucrative, it’s time for average investors to take heed. But they need to keep their eyes open to new complexities - especially when the pros are plowing more money into a market that will likely never be the same after the beating it’s taken.
That’s what’s happening with the $2.7 trillion municipal bond market, where state and local governments raise cash to build everything from sewers to schools to roads. It’s also a magnet for investors seeking modest and reliable tax-exempt returns of around 3 to 4 percent that in normal times rival those of Treasury bonds.
Until recently, comparing muni bonds was pretty simple. You assessed the maturity date when you could expect your principal back, weighed a bond’s price against its default risk rating, and determined if the bond was backed by insurance. But the tax-favored status munis enjoy was foremost - a big selling point for wealthier investors looking to ease their tax hit.
As they RAISE THEM ON US!!!!!!!
“People used to be able to shut their eyes and buy a muni bond as long as it had insurance, and they felt safe and secure,’’ said Marilyn Cohen, a fixed-income manager whose Los Angeles-based firm, Envision Capital Management, invests most of the $195 million it manages in muni bond portfolios.
Need I say it?
Now, there’s much more to consider, which has left many investors leaving it to the pros to find the best deals in the muni market. Often, they’re favoring muni bond mutual funds over buying bonds directly. Muni funds - which hold about one-third of all outstanding debt in the muni market - offer diversification across a range of muni investments, so if one defaults, you don’t take a big hit.
“People are throwing in the towel and saying, ‘I just can’t do this on my own anymore,’ ’’ Cohen said. “It’s become more complicated for us portfolio managers, too. There’s much more research, much more drill-down.’’
A host of complexities has ushered in what Cohen calls the muni market’s “new normal’’:
Budget deficits that nearly all states and many local governments face, raising questions about their ability to make good on bond obligations. But after many investors fled munis late last year, things are looking up. Investors put more than $29 billion into muni bond mutual funds through the end of June.
That is why YOU are PAYING HIGHER TAXES, AmeriKa!
WAKE the FUCK UP, will you?
So how to explain muni funds’ recent popularity? For starters, with taxes already rising or about to rise to repair federal and state governments’ recession-battered budgets, muni yields - their expected rates of return - are looking attractive compared with less tax-friendly investing options. For example, interest earned from Treasury bonds is exempt from state and local taxes, but not federal taxes. With muni bonds, you’re generally exempt from federal tax, and in most cases from state and local taxes as well, if they’re bought in the state where you live.
“With taxes rising, what else besides munis is left to give you some kind of tax relief?’’ Cohen said. Because munis enjoy a federal tax advantage over Treasuries, Treasuries typically earn a higher before-tax yield than munis with comparable maturities. But these days, there’s little difference, with a slight edge for munis.
Still, with states’ budgets in disarray, muni bond funds face headwinds. Funds investing in the general muni debt category fell an average 8.83 percent in second half of last year, according to Lipper Inc. Through this year’s first half, the funds have reversed course, rising an almost identical amount, 8.84 percent. All told, over the past 12 months the category lost 0.5 percent.
But the rally stalled last month amid growing marketplace worries about states’ fiscal troubles, including California’s $26 billion deficit.
Yeah, right: The California "Crisis"
The muni market “is probably going to have some unpleasant volatility over the next few months,’’ Lipper analyst Jeff Tjornehoj said. Still, with muni yields high, there’s plenty of opportunity for those in the market for the long term.
You know WHO is PAYING OUT, right, taxpayers?
“I don’t think there’s anything wrong with the muni market,’’ says Cohen, of Envision Capital Management, “other than you must be very careful about what you buy.’’
I shouldn't have bought a Globe because REALIZING STATE GOVERNMENT and PLOITICIANS are nothing more than LOOTERS is HURTFUL and PAINFUL to me now!
The WHOLE OPERATION is ONE BIG HEIST of TAX LOOT!
--more--"
This is the system we want to impose on the rest of the world?
No wonder they are fighting it.
