Recent Commentary
MMA Muni Outlook > June 2010
Market Summary
"Government's greater ability to borrow enables it to defer hard choices but, as Greece discovered, not even governments can borrow forever. The days when state officials may shield their workers while subjecting all other constituents to hardship are fast at an end." –Roger Lowenstein, NYT, June 27, 2010
Municipal Market Rallied Despite "Deficit Vigilantes"
The municipal market posted positive gains in June as the first half's weakness was overcome by an exuberant rally in the final 10 days. Throughout June there were persistent negative headlines which projected the sovereign debt crisis of Greece and smaller EU members to US states challenged with pension liabilities and uncertain future federal support. However, amid the exuberant headlines that shook the uninformed and generated distribution issues in both the tax-exempt and taxable municipal space, there remained consistent demand for limited tax-exempt supply. Municipal issuance was $30.5B, however, tax-exempt bonds were less than $21B, the lowest total for the month of June since 1997. Non-BAB municipal issuance (predominantly tax-exempt) over the past 12-months has fallen to $306B, the lowest since April 2002 9/11 impacted total... (For continuation of Outlook, click Full Report below.)
