This month saw more of news about financial market volatility. The Month’s municipal bond news included:
- 11/04: Tax Win Inspires Copycats – WSJ.com – Affluent Lake Tahoe homeowners won a record $43 million in property tax refunds and are trying to get more. The problem was that Washoe County assessed home values using their own techniques instead of market values. Other counties around the US may be susceptible to this same tactic, significantly affecting the finances of a given county.
- 11/04: Fidelity California Short-Intermediate Tax-Free Bond Fund (FCSTX) Semiannual Report – Municipal bonds generated solid gains for the six-months period ending August 21, 2011 mainly because of investor demand and reduced muni bond supply. Fundamentals improved and expenses were slashed in many municipalities. Even out of state investors purchased California munis. One problem area was their Puerto Rico muni bond holdings.
- 11/10: Jefferson County, Alabama finally filed for bankruptcy. This is the largest municipal bankruptcy yet and was no surprise. Problems were due to bond issuance deals to upgrade its sewer system that soured amid widespread corruption, bribery and fraud charges that led to some 22 convictions.
- 11/11: Smart Money’s Jack Hough thinks munis are worth a look. He is bullish due to recent strength in lite of Jeffereson Country bankruptcy and Euro zone problems, and other factors.
- 11/11: Superdowngrades or multi-notch downgrades of muni bonds are occuring because ratings firms do not review each bond’s finances regularly.
- 11/14: Cities are using Muni Bond money to pay for other things. Audit Investigations are going on and lawsuits are flying.
- 11/23: Muni Bond ETFs have held there own and are slowly growing more popular. Mutual funds still dominate the category.
- 11/25: Harrisburg had their bankruptcy petition thrown out by the court as they violated state laws by doing so. Pennsylvania now will pursue a plan to put Harrisburg into state receivership.
- 11/30: Jefferson Counties’ bankruptcy will test whether ‘previously safe’ revenue muni bonds will continue to get paid while in bankruptcy.