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I'm shorting all the municipal bond ETFs I can find. Public sector unions (police, firefighter, teacher) are driving too many cities into default on their debts. It's a disaster waiting to happen.
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The top tax brackets rates are expected to rest on January 1 2010. Unless something changes individuals in the top tax brackets will pay 3 to 4.6% more tax. Long-term capital gains rates will expire January 1, 2011.
Expect a higher demand for tax-free income and lower demand for growth stocks through the end of next year.
Disclosure: I own municipal bonds and intend to purchase more through the end of 2009.
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Still think this is a bear market Rally!!
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U.S. stock bull 3/17/2008.
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Short munis... Should normally be safe against the S+P 500
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