Fabian, $6.4 billion / $2.8 trillion = .0023, not .002%. Check your arithmetic. Does anyone at the WSJ proofread anymore? I agree, the muni bond market is a disaster waiting to happen.
Friday, July 9, 2010
"Investors are ignoring warning signs in the $2.8 trillion municipal-bond market, raising the risk of a reckoning, according to some market specialists. Numerous municipalities are struggling financially. ... But municipal-bond prices aren't reflecting much concern. Yields of municpal bonds, maturing in 2020 stood at 3.15% Friday, up slightly for the week but down from 3.3% in April. ... [Defaults] represented about $6.4 billion, or just .002% of outstanding municipal debt', [Matt Fabian] says", Ianthe Jeanne Dugan at the WSJ, 14 June 2010, link: http://online.wsj.com/article/SB10001424052748704067504575304782084631368.html.