Municipal Bonds

Municipal bonds are bonds issued by an American county, city, publicly owned airport, seaport, school district, or utility. The bonds are issued to improve the said cities or counties, or are tied specifically to a project within a county or city. Therefore, the bonds are backed by the county, city, or specific project. One general aspect of municipal bonds that makes them attractive is that they provide income with great tax benefits. Usually, municipal bonds are completely exempt from federal taxes. Municipal bonds trade in the bond markets, much like most of the other major bonds in the U.S.


Detroit, the “Motor City,” has been approved for bankruptcy. In making the ruling, Judge Steven W. Rhodes, who sits in the United States Bankruptcy Court for the Eastern District of Michigan, said, “This once proud and prosperous city can’t pay…

The mainstream and politicians tell us the “wounds” of the financial crisis are over and the U.S. economy is in recovery mode. This simply isn’t true. A few of the key indicators I follow to see where an economy stands…

We have seen cities like Detroit and others in California tell their municipal bonds investors, “Sorry, we can’t pay you.” The reason behind this? Their budget deficit was out of control, they reached the breaking point, and they filed for…

Detroit, once the emblem of the growing U.S. economy, had no other options than to file for bankruptcy. Other cities in California, and cities like Jefferson County, Alabama, have done the same for very similar reasons: registering a budget deficit…

By now, we all know Detroit, once a notorious manufacturing hub in the U.S. economy, filed for bankruptcy. The city defaulted on its municipal bonds simply because it didn’t have the money to give its creditors. The city had three…

In 1980, the total outstanding debt in the U.S. bond market was about $2.5 trillion—this included municipal bonds, Treasury bonds, money market instruments, corporate debt, and asset-backed securities. Fast-forward to 2012, and the U.S. bond market stands at $38.13 trillion—an…

We need to learn from this example… Similar to the U.S. economy, only years earlier, the Japanese economy also burst following a boom in real estate prices. To help revive its economy, the Bank of Japan brought interest rates to…

Municipal bonds investors might be headed towards a storm, which may cause significant damage to their portfolios. Cities within the U.S. economy are in distress—they are struggling to keep their spending in order to not increase their budget deficit. Detroit,…

How severe is the municipal budget deficit situation? In some cases, it is getting to the point of no return. And it’s not just Californian cities that are in trouble; other municipalities in the U.S. economy are struggling to keep…