Municipal Bankruptcies the New Norm141 views 2012-10-16 22:49
In the article “Beware
Municipal Bond Buyers; This Situation Isn’t Getting Any Better,” Lombardi
reports that cities in California, like Vallejo, Mammoth Lakes, Stockton, and
San Bernardino, have already defaulted on their municipal bonds, and he
believes that Compton is most likely to be the next to default.
“What do all these towns have in common? They are
suffocating under big budget deficits,” says Lombardi.
Lombardi notes that the cities that have already defaulted
on their municipal bonds are still scrambling. Stockton, California,
he notes, wants its municipal bond insurers to take a bigger hit because it has
pensions to pay—$26.0 million each year.
“The insurer of the municipal bonds stands to lose more than
$100 million,” says Lombardi.
In sum, the number of municipal bankruptcies is going to increase and the municipal bond investor will certainly be affected by it, concludes Lombardi.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
was among the first (back in late 2006) to predict that the U.S. economy would be in a
recession by late 2007. The daily e-letter correctly predicted the crash in the
stock market of 2008 and early 2009. And Profit
Confidential turned bullish on stocks in March of 2009 and rode the bear
market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to
12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit