Heyer Capital, LLC

Mish Shedlock deserves your daily attention (or at least let your RSS feed bring it to you.) Here is his blog web site: http://globaleconomicanalysis.blogspot.comThe most stunning news he’s delivered lately is an analysis of a recent mortgage pool with an incredible  15% already in foreclosure. Yet 92% of that pool is still rated AAA.  Toss in the muni market stress, and month-end statements will look darn ugly. 

There is extraordinary stress in the municipal bond market right now.    Bonds that aren’t traded frequently are priced according to a matrix (yields, credit risks, liquidity, recent similar deals, etc.)  In other words, a best, reasonable guess.    Want to make your broker squirm?  Send him/her an written request for bids from his/her broker-dealer to buy all of your municipals bonds.  I won’t suggest selling them at those prices, but this is a great time for folks to learn the difference between prices paid on “your money” and “their money.”    Anecdotally I’ve heard of mispricing of upwards of 10%.