The Alstry Bear is just coming out of hibernation
If you think I was negative before......just wait until you start reading what is going to be in newspapers in coming weeks and months.
From the WSJ:
Despite the federal government's continuing efforts to thaw frozen lending markets, states and municipalities are still feeling left out in the cold.
Municipal-debt issuance is down sharply in 2008, particularly during the past few months, as the credit crunch has elevated interest rates and scared away investors, making the floating of new bonds much harder.
Overall issuance of municipal bonds has dropped by 9.1% in 2008 to date. Since September, muni issuance has plunged by 41% compared with the same period last year, according to Municipal Market Advisors. Since investor demand has fallen sharply, the bonds' prices have sagged.
In an extraordinary development, yields for 10-year munis now hover around 4%, a full percentage point higher than comparable Treasury notes. Since munis have the advantage of being tax-exempt, which boosts investors' effective returns, they typically pay out less than Treasurys.
Every corner of the U.S. is suffering from the plummeting demand for munis. The state of Minnesota had originally planned to sell $450 million of general obligation bonds in October. It had to shelve the issue until sometime next year due to a lack of investor interest.
Our cities and states are running out of money. So are our pension funds. Money and assets are evaporating everywhere. Customers are staying home.
Think of our economy like a room full of people and the oxygen is being taken out......and the awareness is just being felt. Some of us saw this a while ago......others are just beginning to feel it.....soon we will all know how difficult the situation really is........
If you think its bad now....just wait a month or two........