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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: 10K a day who wrote (104435)	2/12/2008 9:02:27 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 306849

He obviously sees value in (insuring) Muni Bonds. The dollar amount is staggering. I guess a sign of desperation if the companies agree to buffett offer. Well, of course he does.. Munis are backed by the implicit taxing authority of the municipality that issued them. But unfortunately, this means that these municipalities, which primarily finance their munis via (now declining) property taxes, are facing some serious cash shortfalls over the next couple of years. Rescuing the muni-markets is a defense of the "full faith and credit" of the entire national financial system. The Federal government will be forced to act to prop up the states and cities before they are the private mortgage markets. What this is going to mean, in the end, is that municipalities are either going to be forced to hike property taxes to meet their obligations, or they will be forced to cut services to finance the debt they accumulated during the real estate "gold rush" days. Hawk