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February 25, 2008
Bad Day? Be Glad You're Not Selling Muni Bonds
Here's a fun market inefficiency for you: Despite missing payments at vanishingly low numbers, muni bond rate-auctions failed more in February than at any time in the last 23 years.
Of course, that means much higher rates on muni bonds, as high as 20%, which, in turn, means more municipalities will miss out on future rate payments, thus neatly making the whole thing, at least temporarily, deliriously circular.
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