The "reporters" on CNBC are almost completely useless. They say the bond portfolios are 1/2 billion, and traded higher than taxables. Well, what were the Moody/S&P credit ratings, or were they not rated at all? What were the denominations? Could you sell me $5000. or do I need to buy $100Million minimum? Can I have a week to think it over, maybe call the Comptroller of that municipality? And that is probably a stupid question as well, since those bonds are almost certainly not G.O.s of anything. Since the bonds were owned by a cratering hedgie, they are most certainly paid by a revenue stream of some extremely complicated public works project. When is the settlement, next Friday, or is it this Monday coming up? Those women on CNBC are all a bunch of airheads. I keep that stuff on mute.
canuckrookie: I read an article a couple months ago about this. Their investors wanted their money, and the funds could only sell their good assets(munis, etc.) quickly[no market for CDO's]. As the price for munis is depressed, all funds holding those muni bonds are seeing their NAV go down...therefore yields go up. The interest they receive is the same. Also, the carry-trade is unwinding, depressing prices too. Goto etfconnect.com and search munis, sort by yield...very interesting.
Imagine all the people out there who would love to buy munis right now but can't because of "liquid" holding in corporate paper. I mean.... ouch!
muni etfs are selling at dicounts to NAV. but you need to choose the ones that have conservative leverage. NIO is one of them