Municipal Bond Forum
Munis amid turbulence
Q
Given the turmoil in the muni market since the eruption of the financial crisis, do you still think the same about munis or are you concerned, specifically, in states like New York, where such a significant portion of city and state revenues come from Wall Street? Are municipal default risks rising or am I just unnecessarily fearful that a state like New York will not be fine, in terms of munis?
A
James A. Klotz responds:
Although recent events in the financial markets are enough to fray anyone’s nerves, our belief in the creditworthiness of municipal bonds is not shaken.
We agree that New York and New Jersey will experience some fallout from the recent Wall Street turbulence, but this is not the first time these types of shakeouts have occurred, and we don’t anticipate a major impact on municipal finance in the Northeast.
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