Oil Spill and the Municipal Bond Market
May 6, 2010 John Mousseau is a portfolio manager and heads the tax-free Muni section of Cumberland. He is a member of the Management Committee of Cumberland Advisors. His bio is found at www.cumber.com. His email is John.Mousseau@cumber.com. ~~~ The Associated Press reported (Wednesday, May 4) satellite images which indicate that the oil slick in the Gulf of Mexico has reached the Mississippi delta and some islands off the coast of Louisiana. Our recent piece (“Oil Slickonomics”) laid out various economic/ecological scenarios – all of which are bad. We have analyzed some of the impacts on municipal bonds. While the long-term impacts are uncertain and unknown, there are certainly concerns for total-return municipal portfolio managers. The problem here is much more complex and troublesome than…(read more)
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