[quote=phaster][quote=FormerOwner]
What does everyone think of municipal bond funds? I’ve got a financial advisor that has recommended a number of municipal bond funds, such as PIMAX and VCLAX; a mix of high-yield/lower credit quality muni funds and lower-yield/higher credit quality muni funds. Overall, the performance looks a heck of a lot better than the 1% I’m getting on my CD’s. I can leave the money there for several years at least, so short-term volatility wouldn’t really be a problem. Any thoughts would be appreciated.
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just wondering if your financial advisor has pondered how “municipal bond funds” he recommended are going to be affected by an accounting rule which was just put in place (which explicitly states pension liabilities must be included on the balance sheets)
[quote=phaster]FlyerInHi,
I guess its up to me warn of the economic danger(s) since none of the old hands on this forum were able to connected the dots to paint the big picture of a parallel situtation as described in the big short prologue
…long story short
“public pensions and muni bonds” have mutated into a monstrosity that could chaotically collapse the economy and very, very, vary few of the experts, leaders or talking heads in the wider world seem to have a clue
I’m guessing most of you still don’t know what most likely will happen AND truth be told its impossible to predict the future w/ 100% accuracy
yeah you might have some soundbite you repeat so you don’t sound dumb about the state of public finance, but come on (is it actually possible for the “average” taxpayer to trust/verify the figures?)
[quote=CA renter]“Standard And Poor’s Gives San Diego County Its Highest Rating
San Diego County has earned the highest possible rating from all three of the top credit agencies—Fitch, Moody’s, and Standard and Poor’s.”
an honest outsider and math-centric weirdo might just see the giant lie at the center of the economy… by just PAYING ATTENTION!
[quote=NPR] After the stock market crash of 1929, the agencies began to also rate bond investments for banks — at the request of the U.S. government. But things began to change in the 1960s and 1970s. Instead of charging investors for their ratings information, the agencies began to charge the bond issuers themselves for the ratings.
“People were quite critical of this and said it could create a conflict of interest,” Partnoy says. “You can imagine what the difference between ratings of restaurants and movies might be if instead of the Michelin Guide or the Zagat guide, if the restaurants or movie companies themselves were paying the raters to be rated, it’s an obvious conflict of interest. And now it’s very commonplace that companies and GOVERNMENTS — anyone who wants to borrow money — THEY ARE THE ONES WHO ARE PAYING FOR THE RATING.”
[quote=TIMESOFSANDIEGO.COM] Financial Outlook Shows San Diego’s Revenue Will Grow
Revenues to the city of San Diego are projected to “modestly improve” over the next five fiscal years, while expenses will continue to rise, according to a financial outlook to be delivered Thursday to the City Council’s Budget Committee.
The five-year outlook, released annually in November by the mayor’s financial staff, projects steadily increasing general fund surpluses through Fiscal Year 2021.
The anticipated surpluses begin at $200,000 for the next fiscal year, and grow in subsequent years to $7.9 million, $25.1 million, $46.4 million, and $73.7 million.
THE PROJECTIONS DON’T INCLUDE FACTORS THAT OCCASIONALLY POP UP, like increases in contributions to the employee pension system.
[quote=LATIMES.COM]
PUBLIC “Pension liabilities must be included on the balance sheets of the agencies responsible for funding their employees’ pensions. Until now liabilities have been buried in arcane footnotes that few read and even fewer understood”
If you have to worry about everything that could happen, then the only thing you should do is leave your money in a 1%CD, never buy a house, and never buy any other sort of investment that isn’t guaranteed …..
Also, I think you’re glossing over all types of CA munibonds…..There’s many different ones, and unlikely all will be defaulting all at the same time….
Anyway I’m not suggesting to go all in in bonds.A little moderation everywhere, seemed to worked out ok. Definitely better than camping out in a 1%CD for the past few years…
