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Fixed income markets

 

Are municipal bonds a good option at the current scenario of economic slowdown?

Created by : Vikrant Panwar, Portfolio Manager, IL&FS Venture Corporation  | 09 20 2008 03:31:11 +0000
Industry : Hedge Funds/VCs/Private EquityFunctional Area : Personal Finance(Personal Interests)
Keywords : Option Economic Slowdown Current Scenario Municipal Bonds Global Slowdown
Activity:  172 views;  last activity : 07 06 2010 20:18:09 +0000
Are municipal bonds a good option at the current scenario of economic slowdown?
  
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The bankruptcy filing by Lehman Brothers Holdings Inc  the No. 3 underwriter for competitive deals in the $2.6 trillion tax-free municipal debt market, and the $50 billion acquisition of Merrill Lynch & Co Inc  will also restrict liquidity in the municipal bond market, according to traders, portfolio managers and investment strategists.
By Vikrant Panwar, Portfolio Manager, IL&FS Venture Corporation  09 20 2008 03:31:11 +0000
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Within the last six months, two other major dealers stepped back from the municipal market. Bear Stearns & Co. was acquired by JPMorgan Chase & Co and UBS Securities  disbanded most of its municipal operations in June.

"One result of all of this has been a continued reduction in amount of balance sheet assets available to the muni market"
By Veena Gupta, Analyst, Blackstone Group  | 09 20 2008 03:32:40 +0000
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