[stansd]

I’ll throw in my 2 cents: I’ve stayed away from munis because I think the housing contagion has a real likelihood of spreading to CA municipalities since so much of their revenue is property tax/sales tax dependent. I also think there will be a number of OC style casualties as losses from the excesses of the last few years are fully realized.

That’s the pessimistic side: On the optimistic side, municipalities often have the power to tax, cut spending, etc., and those powers can be used to offset a multitude of sins.

Remember, though, that it isn’t only the risk that they won’t pay. It’s the risk that their will be risk that they won’t pay that can put the bond prices at risk (as default risk increases, bond yields will rise and prices will fall).

Long story short, I’m staying away from them right now, but certainly they are safer than many other asset classes

Stan

[stansd]

I’ll throw in my 2 cents: I’ve stayed away from munis because I think the housing contagion has a real likelihood of spreading to CA municipalities since so much of their revenue is property tax/sales tax dependent. I also think there will be a number of OC style casualties as losses from the excesses of the last few years are fully realized.

That’s the pessimistic side: On the optimistic side, municipalities often have the power to tax, cut spending, etc., and those powers can be used to offset a multitude of sins.

Remember, though, that it isn’t only the risk that they won’t pay. It’s the risk that their will be risk that they won’t pay that can put the bond prices at risk (as default risk increases, bond yields will rise and prices will fall).

Long story short, I’m staying away from them right now, but certainly they are safer than many other asset classes

Stan

[stansd]

I’ll throw in my 2 cents: I’ve stayed away from munis because I think the housing contagion has a real likelihood of spreading to CA municipalities since so much of their revenue is property tax/sales tax dependent. I also think there will be a number of OC style casualties as losses from the excesses of the last few years are fully realized.

That’s the pessimistic side: On the optimistic side, municipalities often have the power to tax, cut spending, etc., and those powers can be used to offset a multitude of sins.

Remember, though, that it isn’t only the risk that they won’t pay. It’s the risk that their will be risk that they won’t pay that can put the bond prices at risk (as default risk increases, bond yields will rise and prices will fall).

Long story short, I’m staying away from them right now, but certainly they are safer than many other asset classes

Stan

[stansd]

I’ll throw in my 2 cents: I’ve stayed away from munis because I think the housing contagion has a real likelihood of spreading to CA municipalities since so much of their revenue is property tax/sales tax dependent. I also think there will be a number of OC style casualties as losses from the excesses of the last few years are fully realized.

That’s the pessimistic side: On the optimistic side, municipalities often have the power to tax, cut spending, etc., and those powers can be used to offset a multitude of sins.

Remember, though, that it isn’t only the risk that they won’t pay. It’s the risk that their will be risk that they won’t pay that can put the bond prices at risk (as default risk increases, bond yields will rise and prices will fall).

Long story short, I’m staying away from them right now, but certainly they are safer than many other asset classes

Stan

[stansd]

I’ll throw in my 2 cents: I’ve stayed away from munis because I think the housing contagion has a real likelihood of spreading to CA municipalities since so much of their revenue is property tax/sales tax dependent. I also think there will be a number of OC style casualties as losses from the excesses of the last few years are fully realized.

That’s the pessimistic side: On the optimistic side, municipalities often have the power to tax, cut spending, etc., and those powers can be used to offset a multitude of sins.

Remember, though, that it isn’t only the risk that they won’t pay. It’s the risk that their will be risk that they won’t pay that can put the bond prices at risk (as default risk increases, bond yields will rise and prices will fall).

Long story short, I’m staying away from them right now, but certainly they are safer than many other asset classes

Stan

[stansd]

Hi Kewp,

Lets continue your train of thought, but since the U.S. is one of the most free countries on the planet, rather than cherry picking the top 10, lets look a the bottom.

167 (2) Burundi 0.413
168 (1) Democratic Republic of the Congo[4] 0.411
169 (1) Ethiopia 0.406
170 (1) Chad 0.388
171 (1) Central African Republic 0.384
172 (4) Mozambique 0.384
173 (2) Mali 0.380
174 (3) Niger 0.374
175 (2) Guinea-Bissau 0.374
176 (2) Burkina Faso 0.370

Now lets look at the top 20 and bottom 20 on the Heritage Foundations index of economic freedom:

Ranking Country 2008 Score
1 Hong Kong 90.3
2 Singapore 87.4
3 Ireland 82.4
4 Australia 82.0
5 United States 80.6
6 New Zealand 80.2
7 Canada 80.2
8 Chile 79.8
9 Switzerland 79.7
10 United Kingdom 79.5
11 Denmark 79.2
12 Estonia 77.8
13 Netherlands, The 76.8
14 Iceland 76.5
15 Luxembourg 75.2
16 Finland 74.8
17 Japan 72.5
18 Mauritius 72.3
19 Bahrain 72.2
20 Belgium 71.5

137 Laos 49.2
138 Haiti 48.9
139 Sierra Leone 48.9
140 Togo 48.8
141 Central African Republic 48.2
142 Chad 47.7
143 Angola 47.1
144 Syria 46.6
145 Burundi 46.3
146 Congo, Republic of 45.2
147 Guinea Bissau 45.1
148 Venezuela 45.0
149 Bangladesh 44.9
150 Belarus 44.7
151 Iran 44.0
152 Turkmenistan 43.4
153 Burma (Myanmar) 39.5
154 Libya 38.7
155 Zimbabwe 29.8
156 Cuba 27.5
157 Korea, North 3.0

Notice anything (it’s even more compelling if you look at the entire list)?

This is not to suggest the U.S. would wind up like one of the lowest if government intervention increased. However,studies have shown time and time again that there is a strong correlation between economic well being and economic freedom.

We ignore this fact at our own peril.

Stan

[stansd]

Hi Kewp,

Lets continue your train of thought, but since the U.S. is one of the most free countries on the planet, rather than cherry picking the top 10, lets look a the bottom.

167 (2) Burundi 0.413
168 (1) Democratic Republic of the Congo[4] 0.411
169 (1) Ethiopia 0.406
170 (1) Chad 0.388
171 (1) Central African Republic 0.384
172 (4) Mozambique 0.384
173 (2) Mali 0.380
174 (3) Niger 0.374
175 (2) Guinea-Bissau 0.374
176 (2) Burkina Faso 0.370

Now lets look at the top 20 and bottom 20 on the Heritage Foundations index of economic freedom:

Ranking Country 2008 Score
1 Hong Kong 90.3
2 Singapore 87.4
3 Ireland 82.4
4 Australia 82.0
5 United States 80.6
6 New Zealand 80.2
7 Canada 80.2
8 Chile 79.8
9 Switzerland 79.7
10 United Kingdom 79.5
11 Denmark 79.2
12 Estonia 77.8
13 Netherlands, The 76.8
14 Iceland 76.5
15 Luxembourg 75.2
16 Finland 74.8
17 Japan 72.5
18 Mauritius 72.3
19 Bahrain 72.2
20 Belgium 71.5

137 Laos 49.2
138 Haiti 48.9
139 Sierra Leone 48.9
140 Togo 48.8
141 Central African Republic 48.2
142 Chad 47.7
143 Angola 47.1
144 Syria 46.6
145 Burundi 46.3
146 Congo, Republic of 45.2
147 Guinea Bissau 45.1
148 Venezuela 45.0
149 Bangladesh 44.9
150 Belarus 44.7
151 Iran 44.0
152 Turkmenistan 43.4
153 Burma (Myanmar) 39.5
154 Libya 38.7
155 Zimbabwe 29.8
156 Cuba 27.5
157 Korea, North 3.0

Notice anything (it’s even more compelling if you look at the entire list)?

This is not to suggest the U.S. would wind up like one of the lowest if government intervention increased. However,studies have shown time and time again that there is a strong correlation between economic well being and economic freedom.

We ignore this fact at our own peril.

Stan

[stansd]

Hi Kewp,

Lets continue your train of thought, but since the U.S. is one of the most free countries on the planet, rather than cherry picking the top 10, lets look a the bottom.

167 (2) Burundi 0.413
168 (1) Democratic Republic of the Congo[4] 0.411
169 (1) Ethiopia 0.406
170 (1) Chad 0.388
171 (1) Central African Republic 0.384
172 (4) Mozambique 0.384
173 (2) Mali 0.380
174 (3) Niger 0.374
175 (2) Guinea-Bissau 0.374
176 (2) Burkina Faso 0.370

Now lets look at the top 20 and bottom 20 on the Heritage Foundations index of economic freedom:

Ranking Country 2008 Score
1 Hong Kong 90.3
2 Singapore 87.4
3 Ireland 82.4
4 Australia 82.0
5 United States 80.6
6 New Zealand 80.2
7 Canada 80.2
8 Chile 79.8
9 Switzerland 79.7
10 United Kingdom 79.5
11 Denmark 79.2
12 Estonia 77.8
13 Netherlands, The 76.8
14 Iceland 76.5
15 Luxembourg 75.2
16 Finland 74.8
17 Japan 72.5
18 Mauritius 72.3
19 Bahrain 72.2
20 Belgium 71.5

137 Laos 49.2
138 Haiti 48.9
139 Sierra Leone 48.9
140 Togo 48.8
141 Central African Republic 48.2
142 Chad 47.7
143 Angola 47.1
144 Syria 46.6
145 Burundi 46.3
146 Congo, Republic of 45.2
147 Guinea Bissau 45.1
148 Venezuela 45.0
149 Bangladesh 44.9
150 Belarus 44.7
151 Iran 44.0
152 Turkmenistan 43.4
153 Burma (Myanmar) 39.5
154 Libya 38.7
155 Zimbabwe 29.8
156 Cuba 27.5
157 Korea, North 3.0

Notice anything (it’s even more compelling if you look at the entire list)?

This is not to suggest the U.S. would wind up like one of the lowest if government intervention increased. However,studies have shown time and time again that there is a strong correlation between economic well being and economic freedom.

We ignore this fact at our own peril.

Stan

[stansd]

Hi Kewp,

Lets continue your train of thought, but since the U.S. is one of the most free countries on the planet, rather than cherry picking the top 10, lets look a the bottom.

167 (2) Burundi 0.413
168 (1) Democratic Republic of the Congo[4] 0.411
169 (1) Ethiopia 0.406
170 (1) Chad 0.388
171 (1) Central African Republic 0.384
172 (4) Mozambique 0.384
173 (2) Mali 0.380
174 (3) Niger 0.374
175 (2) Guinea-Bissau 0.374
176 (2) Burkina Faso 0.370

Now lets look at the top 20 and bottom 20 on the Heritage Foundations index of economic freedom:

Ranking Country 2008 Score
1 Hong Kong 90.3
2 Singapore 87.4
3 Ireland 82.4
4 Australia 82.0
5 United States 80.6
6 New Zealand 80.2
7 Canada 80.2
8 Chile 79.8
9 Switzerland 79.7
10 United Kingdom 79.5
11 Denmark 79.2
12 Estonia 77.8
13 Netherlands, The 76.8
14 Iceland 76.5
15 Luxembourg 75.2
16 Finland 74.8
17 Japan 72.5
18 Mauritius 72.3
19 Bahrain 72.2
20 Belgium 71.5

137 Laos 49.2
138 Haiti 48.9
139 Sierra Leone 48.9
140 Togo 48.8
141 Central African Republic 48.2
142 Chad 47.7
143 Angola 47.1
144 Syria 46.6
145 Burundi 46.3
146 Congo, Republic of 45.2
147 Guinea Bissau 45.1
148 Venezuela 45.0
149 Bangladesh 44.9
150 Belarus 44.7
151 Iran 44.0
152 Turkmenistan 43.4
153 Burma (Myanmar) 39.5
154 Libya 38.7
155 Zimbabwe 29.8
156 Cuba 27.5
157 Korea, North 3.0

Notice anything (it’s even more compelling if you look at the entire list)?

This is not to suggest the U.S. would wind up like one of the lowest if government intervention increased. However,studies have shown time and time again that there is a strong correlation between economic well being and economic freedom.

We ignore this fact at our own peril.

Stan

[stansd]

Hi Kewp,

Lets continue your train of thought, but since the U.S. is one of the most free countries on the planet, rather than cherry picking the top 10, lets look a the bottom.

167 (2) Burundi 0.413
168 (1) Democratic Republic of the Congo[4] 0.411
169 (1) Ethiopia 0.406
170 (1) Chad 0.388
171 (1) Central African Republic 0.384
172 (4) Mozambique 0.384
173 (2) Mali 0.380
174 (3) Niger 0.374
175 (2) Guinea-Bissau 0.374
176 (2) Burkina Faso 0.370

Now lets look at the top 20 and bottom 20 on the Heritage Foundations index of economic freedom:

Ranking Country 2008 Score
1 Hong Kong 90.3
2 Singapore 87.4
3 Ireland 82.4
4 Australia 82.0
5 United States 80.6
6 New Zealand 80.2
7 Canada 80.2
8 Chile 79.8
9 Switzerland 79.7
10 United Kingdom 79.5
11 Denmark 79.2
12 Estonia 77.8
13 Netherlands, The 76.8
14 Iceland 76.5
15 Luxembourg 75.2
16 Finland 74.8
17 Japan 72.5
18 Mauritius 72.3
19 Bahrain 72.2
20 Belgium 71.5

137 Laos 49.2
138 Haiti 48.9
139 Sierra Leone 48.9
140 Togo 48.8
141 Central African Republic 48.2
142 Chad 47.7
143 Angola 47.1
144 Syria 46.6
145 Burundi 46.3
146 Congo, Republic of 45.2
147 Guinea Bissau 45.1
148 Venezuela 45.0
149 Bangladesh 44.9
150 Belarus 44.7
151 Iran 44.0
152 Turkmenistan 43.4
153 Burma (Myanmar) 39.5
154 Libya 38.7
155 Zimbabwe 29.8
156 Cuba 27.5
157 Korea, North 3.0

Notice anything (it’s even more compelling if you look at the entire list)?

This is not to suggest the U.S. would wind up like one of the lowest if government intervention increased. However,studies have shown time and time again that there is a strong correlation between economic well being and economic freedom.

We ignore this fact at our own peril.

Stan

[stansd]

One thing I thought of today: When we call it stimulus, everyone jumps on board.

What about if we re-frame it this way:

We are having economic problems. My proposal is that the government borrow money from the Chinese in order to buy everyone in America their choice of an LCD TV, 1 month’s free mortgage, a Coach handbag + a pair of Choos, or a carribean vacation.

Effectively, it’s the same thing, but people are blinded by the fact that the benefit is direct while the cost seemingly is borne by no one.

One day, the tab comes due.

Stan

[stansd]

One thing I thought of today: When we call it stimulus, everyone jumps on board.

What about if we re-frame it this way:

We are having economic problems. My proposal is that the government borrow money from the Chinese in order to buy everyone in America their choice of an LCD TV, 1 month’s free mortgage, a Coach handbag + a pair of Choos, or a carribean vacation.

Effectively, it’s the same thing, but people are blinded by the fact that the benefit is direct while the cost seemingly is borne by no one.

One day, the tab comes due.

Stan

[stansd]

One thing I thought of today: When we call it stimulus, everyone jumps on board.

What about if we re-frame it this way:

We are having economic problems. My proposal is that the government borrow money from the Chinese in order to buy everyone in America their choice of an LCD TV, 1 month’s free mortgage, a Coach handbag + a pair of Choos, or a carribean vacation.

Effectively, it’s the same thing, but people are blinded by the fact that the benefit is direct while the cost seemingly is borne by no one.

One day, the tab comes due.

Stan

[stansd]

One thing I thought of today: When we call it stimulus, everyone jumps on board.

What about if we re-frame it this way:

We are having economic problems. My proposal is that the government borrow money from the Chinese in order to buy everyone in America their choice of an LCD TV, 1 month’s free mortgage, a Coach handbag + a pair of Choos, or a carribean vacation.

Effectively, it’s the same thing, but people are blinded by the fact that the benefit is direct while the cost seemingly is borne by no one.

One day, the tab comes due.

Stan

[stansd]

One thing I thought of today: When we call it stimulus, everyone jumps on board.

What about if we re-frame it this way:

We are having economic problems. My proposal is that the government borrow money from the Chinese in order to buy everyone in America their choice of an LCD TV, 1 month’s free mortgage, a Coach handbag + a pair of Choos, or a carribean vacation.

Effectively, it’s the same thing, but people are blinded by the fact that the benefit is direct while the cost seemingly is borne by no one.

One day, the tab comes due.

Stan

[Author]

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