The Muni Bond Market Outlook

"The municipal bond market has generated tremendous debate in the past months, with Cassandras predicting another “subprime” disaster, while apologists (often with vested interests) claim there is little justification for these warnings. We take an unbiased, detailed look at history beyond the halcyon largely default-free post-war era, and an honest assessment of state and local finances, present and future. Our base case sees close to US$100 billion of defaults over five years, but typical 80% recoveries are far higher than on corporate bonds." - in RGE