Detroit and Illinois Work Toward Resolving Their Issues

Recent negative news about Detroit’s bankruptcy and Illinois’s pension overhaul has raised fears about the poor financial health of many cities and states. And it’s shaken individual investors’ confidence in municipal bonds. Just how worried should investors be? Not very, in our opinion, as bond defaults remain very rare. In fact, we view recent events in Detroit and Illinois as positives for the market. (more…)


Read More


Illinois and California: Similar Challenges, Different Approaches

Joe Rosenblum (pictured), Neene Jenkins and John Ceffalio

Every state faces challenges when it comes to balancing the books, but not every state is equally effective at tackling them. The responses of California and Illinois to post-2008 difficulties show how different the approaches can be—and how much is at stake. (more…)


Read More


Municipals: A Glimpse of What’s to Come?

Federal Reserve Chairman Bernanke reiterated today that a healthier economy would prompt the Fed to end its unprecedented bond-buying program, which has kept yields artificially low. Speculation on this question over the last several weeks has caused a sharp bond sell-off and rising yields. But we don’t see this as the start of a rout for most municipal bonds. (more…)


Read More


Detroit Municipal Bonds:
Who’ll Share the Pain?

Joseph Rosenblum (pictured) and Neene Jenkins

It could be several weeks or a few months. But before long, the city of Detroit is likely to default on some of its outstanding bonds and possibly file for Chapter 9 bankruptcy protection. It would be a historic bankruptcy and is sure to create uncertainty in the municipal bond market. Some types of debt will fare better than others in the final restructuring. (more…)


Read More