“On March 24, a judge may push Jefferson County, Ala., into the largest U.S. municipal bankruptcy in history……….
……..Yet the threat is easily overstated. A Moody’s study found muni credit loss rates across 1970 to 2000 were lower than for triple-A-rated corporate bonds. Among general-obligation and essential-service muni bonds — 60% of issuers surveyed — the default rate was exactly zero.
Today’s climate is more often compared to that of the Great Depression. In surveying the muni market, however, it’s worth remembering that today’s landscape is very different. For example, states enjoy far greater explicit and implicit backing from the federal government.”
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