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alstry (< 20)

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February 15, 2008 – Comments (6)

True story.


I have a friend who has $100K  invested in a nationally recognized muni bond fund mutual fund housed at a well known brokerage firm.  His broker called him unsolicited today and told him the fund was illiquid.

 Just curious whether anyone has heard of a similar story?

6 Comments – Post Your Own

#1) On February 15, 2008 at 6:06 PM, abitare (29.91) wrote:

Nope, but I do not doubt this is accurate. There are plenty of hedge funds imploding.

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#2) On February 15, 2008 at 6:26 PM, EScroogeJr (< 20) wrote:

But muni bonds are safe. What is the name of the fund?

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#3) On February 15, 2008 at 7:37 PM, motleyanimal (36.83) wrote:

Does the fund require advance notice if you want to cash out?

Municipal bond funds are often thinly traded, considering the type of "safe" investment that it is. All types of bond funds have been under some serious pressure lately. It's either inflation fears or the insurance issue. The closed end bond and income funds offer some very attractive discounts!

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#4) On February 15, 2008 at 7:48 PM, QualityPicks (59.15) wrote:

Wow, a muni mutual fund is illiquid? that is scary. I have a brother at one big brokerage house that has a customer with more than 2 millions in muni bonds (directly, not in a mutual fund) and they just went illiquid as the auction failed.

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#5) On February 15, 2008 at 8:35 PM, Imperial1964 (94.09) wrote:

Yeah.  Scary!

It's because of the bond insurer crisis I've been blogging about.  I just posted one about the solution, which I believe will be implemented within days. 

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#6) On February 15, 2008 at 8:50 PM, dwot (28.99) wrote:

Does this have anything to do with the auctions drying up?

I saw a story on this yesterday and did a post on it. 

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