Municipal Bond Market to Detroit: Yeah, That's What I Thought...
Kevin Orr, Detroit's liquidator bankruptcy administrator, received enormous pressure to try to screw Detroit's bond holders from unions and many others, which I am sure included the Obama administration. This would have had an catastrophic impact upon the municipal bond market.
The $3.7 TRILLION municipal bond market. The municipal bond market, without which nearly every city and state in America would cease to function.
Well, Orr gave it a shot. Predictably the muni bond market won.
The muni market has shown some muscle. So, when is the Treasury market going to throw its weight around?
The $3.7 TRILLION municipal bond market. The municipal bond market, without which nearly every city and state in America would cease to function.
Well, Orr gave it a shot. Predictably the muni bond market won.
Detroit’s proposed 74 cent recovery rate on general-obligation debt, almost five times more than its last offer, has sent yields to the lowest in 10 months and signals a broader rally in local government securities.Notice what I bolded...five times! When in life is a second offer ever five times the first offer? Yeah, hardly ever.
The muni market has shown some muscle. So, when is the Treasury market going to throw its weight around?
posted by Donny Baseball at 4:18 PM
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