Municipal Bond Defaults Are Coming

16 Responses

  1. Martin | February 10, 2011

    Great interview. Of course there will be defaults, and many. Question is, when? Maybe the Fed and Treasury can help with a few more months supprt, but since the elections, hostility to such moves is growing.

    Reply
  2. Leon Chattah | February 10, 2011

    Mr. Kudlow, your thinking seem to be radically flawed. You blame the messenger for the message. You accepted gallantly Mr. Lebenthal's view even when badly worded and short in common sense, apparently only because he is a senior person in the field. The people that got us in this mess all have been seniors in the field. You dismissed Mr Gilani's comment with flustering and bravado but little if any common sense. You gave Ms. Meredith 2 kudos, I'll give you none.
    Respectfully.

    Reply
  3. Dimi Chakalov | February 10, 2011

    Watch Shah Gilani, 3:47-04:10.

    Municiple bond defaults are inevitable. The tipping point will come when municipal bonds need to be rolled over in the spring:

    D. Chakalov

    Reply
  4. William Patalon III | February 10, 2011

    Gentlemen:

    Thanks for taking the time to look, listen and comment. Leon, I think that your comments were deeper and more eloquent that Mr. Kudlow's. Kudos to you. Martin, I know that you are a regular reader and commenter. And whether you agree or disagree, I appreciate your interest, your passion, and the fact that you always try to add to the discussion — and quite successfully, too.

    Clearly, we agree with you both. This is a major, major issue that Wall Street seems happy to dismiss — for now.

    Thank you both;

    William Patalon III
    Executive Editor
    Money Morning

    Reply
  5. Mauricio Mick | February 10, 2011

    Ja, ja, ja
    In some months all the financial system will be a mess. Big crash. No way

    Reply
  6. stocktraderbmp | February 10, 2011

    I trade the US markets from Ireland. Yep you can already see where I'm going with this !!
    Call Ireland a state of the European Union as is Greece Portugal Spain etc Everything was fine till we wanted to roll over our borrowing.
    You all had a good laugh at us and to be fair Mr Cowen did us no favours but the old adage is true ……

    "what goes round" ……. !!!

    You keep your heads in the sand, that way no one hears you scream when you get a kick up the butt.

    Reply
  7. tom | February 10, 2011

    Interesting…but what would happen to gold and silver if the default happens?

    Reply
  8. Owen Stickels | February 10, 2011

    Does Mr Kudlow have to SHOUT ALL THE TIME? I was interested in the topic but I could hardly wait for the segment to finish.

    A normally conversational voice is all that's required.

    I won't be watching his programme again.

    OJ

    Reply
  9. DA | February 10, 2011

    It's all ridiculous! The amount of debt in the US and the world is out of control. You can't just keep financing debt. And definitely not as much debt as the Fed has created. The system has got to crumble. Time for a New Monetary System back by precious metals. The Dollar has been totally off the Gold Standard for 40 years. That's just about how long a Fiat Monetary System last before it crumbles.

    Reply
  10. Jim L | February 10, 2011

    The sky is faling; the sky is falling–Ronald Regans Star Wars induced budget deficitss were going to bring down the world financial system had the punditry ablaze in the 80s and 90s. Gold was going to go to 5000$ having reached approximately 875$. Too many people were too sure of every thing and just the opposite happened. Hell the Elliot Wavers were calling for the Grand Super Cycle Top in 1987 and now again in 2010. Course we all know it has not come in because Ben Fed a Claus is delivering sacks of green energy to the banks who spice up the asset classes when they appear to be falling; or so we are told. Get real folks; pull yourheads out of your ex post factor; post hoc ergo propter hoc. In other less than economic terms situate yourself in the current moment where there is not past or future and take your best shot against your self.

    Reply
  11. Andrew du Boulay | February 10, 2011

    Shah Gilani is my hero.

    America should make him Secretary of the Treasury and the Chairman of the Fed.

    But I'll just be happy to keep hearing his precise and extrodinary views in Money Morning.

    Thank Team!

    Reply
  12. Richard Larkin | February 10, 2011

    I don't want to offend anyone here, but it's clear from comments that everyone has gotten their info from headlines and Ms. Whitney's inflammatory rhetoric. Let me ask those in this blog: did you know that since the Great Depression, less than 1% of all municipal bonds default in any given year? Do you know that for Whitney's prediction to come true, we would have to have a recession greater than the 1930's? That the deficits occurring now have occurred in every recession since 1975? (That's when I started as a muni bond analyst). Do you know that the percentage of unfunded pension liabilities today are almost exactly the same as they were in 1994?

    Reply
  13. CM | February 10, 2011

    No one in that interview mentioned the fact that over the next 10 years – more people will be retiring than ever before with the baby boomers all reaching retirement age. Where will their pensions and retirement funds be? – especially from the essential services sectors, police, fire, ambulance, nursing etc. all supposedly covered by the municipalities. (And who, by the way, are the first ones being laid off by the seperate states). Through information from Money Morning and other monetary newsletters, I (in Australia) have been aware of the Municipal Bonds Market threat for over a year, why not the average American? Why were Meredith's comments so surprising to everyone except Shah? I agree with stocktraderbmp – their heads must be in the sand…

    Reply
  14. Allen | February 10, 2011

    As much as I like the topics on the Kulow show and CNBC in general, I can't stand the arguements when you can't understand what people are saying! If Kudlow doesn't want people to talk, why have them on the show? If he doesn't agree with someone, he interupts and lets someone else talk.

    Reply
  15. Ronthecanuk | February 11, 2011

    Hi DA,

    Fiat Currency is a result of government that feels that the Gold Standard
    is too restricting and needs to be Fundamentally Transformed

    Is it only fitting that Chrysler has FIAT as a partner.

    Now, the Constitution appears to be too restricting to the narcissist in the White House..
    I guess he will be redecorating that to his tastes too.

    Reply
  16. Scott Lindsay | February 21, 2011

    Kudlow knows nothing and never did. I being a regular guy saw the crash of 08 coming but Kudlow was still pushing the garbage on to investors.He laughed at the fact that there would be a double dip in the housing sector and was saying it was picking up only because of a tax credit for first time home buyers then the housing sunk again. And he is one of these idiots that says the US has been out of the recession since June of 09. What a tool to even speak of things getting better when they are printing money 24/7 with inflation at the door,municipalities are bankrupt,states are bankrupt,the country is bankrupt, unemployment is still rising,housing has still not found bottom,and nothing has been solved with all money matters since the crash of 08.Yes your head is not just in the sand but your head is made of it.

    Reply


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