Loren Martell’s column written before yesterday’s stunning Brexit vote noted that our Bond Advisers warned us that the economy was fickle. Today the stock markets are about to take a steep plunge. What will this mean for the municipal bond market? It couldn’t get much lower than it currently is which makes a reduction in interest rates possible. If it begins to rise I think ISD 709 will find refinancing our bonds untenable. If stocks become less attractive investors may want to hedge their bets by moving to municipal bonds or avoid them all together. The switch could be almost immediate and I can’t predict the consequences.
In addition to soiling our own community the World is busy turning upside down while Donald Trump cheers it on from his Scottish Castle. (Vultures always live it up when an elephant dies) My Buddy sent me this cheering email:
For those of you who are looking for a tall building from which to jump.
While the majority of forecasters see less impact in the U.S. than in Europe, the consequences for American investors could be severe, as Brexit’s passage joins a host of other threats that have weighed on equities. Profits are falling, valuations are the highest in a decade and the U.S. just reported the worst hiring since September 2010.