Comments | rmitz: Followup Article(s)

rmitz

Followup Article(s)

Sep 27, 2008 08:17

I'll be editing this message with additional articles in the future, but this first one is extremely important to read now.

http://www.frontlinethoughts.com/printarticle.asp?id=mwo092608

Today, there are many municipal bonds that were originally sold to ( Read more... )

Comments 8

dariaphoebe September 27 2008, 12:40:49 UTC

So how do I buy now?

That's another part of the problem... rmitz September 27 2008, 15:45:00 UTC

It's very difficult for smaller investors to buy these kinds of investments. I frankly don't know how I'd do it, or if it's even possible at our level. They are not sold in these kinds of small chunks.

(The comment has been removed)

Re: That's another part of the problem... rmitz September 27 2008, 20:01:26 UTC

My understanding is chunks of 100K.

Thread 5

r_transpose_p September 27 2008, 19:15:00 UTC

That one paragraph you quoted is difficult to understand.

What does it mean to "put a US treasury into a municipal bond"
When a municipal bond "pays 291% of a normal US treasury" does that mean it has "2.91 US treasuries" put in it? Or does that mean it may or may not have US treasuries in it. What does the 291% have to do with the discount mentioned in the next sentence? 291% doesn't sound like a discount to me!

And why are the municipal bonds tax free, and what does that have to do with whether or not US treasuries have been "put into them"?

r_transpose_p September 27 2008, 19:37:48 UTC

p.s. If I can't understand the article that is supposed to "explain what is going on" perhaps that explains why millions of people are calling their congresspeople with advice running counter to what the experts are saying.

All I manage to understand is "Something bad is happening financially. Historically, when this has happened, the government has done something to reduce its own revenue, and the problem has gone away, ostensibly as a result of government action"

rmitz September 27 2008, 20:02:23 UTC

Well, this article isn't really aimed at the populace, it's aimed at the Congress. More work should be done for educating the populace, but this is pretty complicated.

rmitz September 27 2008, 20:16:24 UTC

Basically, my understanding is that they purchase enough treasuries so that at maturity (treasury bonds have a fixed target value at maturity) they have the same value as the municipal bonds do at maturity. They then associate this in some kind of locked way with the bond--I hadn't heard of that before so I'm not sure of the exact mechanism ( ... )