AnCaps
ANARCHO-CAPITALISTS
Bitch-Slapping Statists For Fun & Profit Based On The Non-Aggression Principle
 
HomePortalGalleryRegisterLog in

 

 Mortgage crisis fallout spreads to 'muni market'

View previous topic View next topic Go down 
AuthorMessage
CovOps

CovOps

Female Location : Ether-Sphere
Job/hobbies : Irrationality Exterminator
Humor : Über Serious

Mortgage crisis fallout spreads to 'muni market' Vide
PostSubject: Mortgage crisis fallout spreads to 'muni market'   Mortgage crisis fallout spreads to 'muni market' Icon_minitimeSun Feb 10, 2008 7:20 am

Investors are wary of insurance guarantees for some bonds issued by cities to fund capital projects.

New York - The subprime mortgage crisis continues to ripple well beyond home foreclosures.

Municipal bonds, securities issued by local governments to fund anything from new sewers to airport improvements, are now caught in the backwash. Though defaults by communities are rare, buyers of their bonds are now wary of investing in any but the best-run and highest-rated communities.

"There has been a disruption the market is not used to," says Bill Stone, chief investment officer of PNC Wealth Management in Philadelphia. "The default rates are so low we can't say it's a crisis, but there is no question there are liquidity issues in the muni market.

The reason for the problem: Many US cities and towns have purchased insurance that boosted their bonds into the best-rated investment category. But some of the insurance companies are the same institutions that also guaranteed the payments on securities backed by subprime loans. Those insurance companies have seen a downgrading of their investment rating, which is used as a surrogate for lesser-rated municipalities that buy the insurance.

http://www.csmonitor.com/2008/0208/p03s01-usec.html
Back to top Go down
 

Mortgage crisis fallout spreads to 'muni market'

View previous topic View next topic Back to top 
Page 1 of 1

Permissions in this forum:You cannot reply to topics in this forum
 :: Anarcho-Capitalist Categorical Imperatives :: AnCaps' Laissez-faire Free Trade Zone-