The IRA
January 31, 2012
John Mousseau: Munis Cruise Through a Scorching January

In this issue of The Institutional Risk Analyst, John Mousseau of Cumberland Advisors opines on the results in the muni market during 2011 and talks about the year ahead. John is a portfolio manager and heads the tax-free Muni section of Cumberland. He is a member of the Management Committee of Cumberland. John's bio is found at www.cumber.com.

While investors generally are being punished by low rates and the prospect of continued ZIRP by the FOMC through 2014, the fact is that there are low risk returns available for people who are willing to do the work and underwrite the credit. As in many markets we watch around the world, US municipal issuance is down as markets continue to deflate. Contracting credit may be good for investors, but it spells trouble ahead in terms of job creation and the long-term stability of local finances. But for now the massive levels of municipal debt default threatened on 60 Minutes in December 2010 by our friend Meredith "Malibu" Whitney so far have been avoided.

Munis Cruise Through a Scorching January
Cumberland A
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