Roughly two and a half years ago, a well-known analyst called for a massive wave of defaults in the municipal bond market. Never mind that when she made the call she had little or no experience in evaluating municipal bonds. Never mind that when she made the call she had just left her former employer, formed her own company, and was now selling research on municipal bonds. The market listened and, in late 2010, the muni market sold off. Since bottoming in late 2010/early 2011, the muni market has done nothing but rally. In spite of this, worries about massive defaults persist.
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