Recently by Robert Wenzel: Seven Things That Will Cost More in2011
There is an attitude by some market observers with regard to the developing muni bond crisis that "this to shall pass."
It is exemplified by the recent retweet by Joe Weisenthal:
Agree RT @PragCapitalist: Bigger concern from muni fallout is higher taxes. Not defaults
This really comes down to guys who aren’t crunching the numbers. Meredith Whitney is crunching the numbers. She is very bearish. Others, who are in a position to know details the most of us are not privy to, tell me the situation is worse than most imagine. They tell me we may have a year or two before the problems develop, but that taxes won’t do it. Indeed, they tell me there is no easy solution.
The only "solutions" I see are massive money printing by the Fed, which devalues the dollar domestically by more than 50% or a default on the pension obligations owed by the states. Neither option is the type that will sit easy with those concerned.
January 14, 2011
