Wednesday, March 02, 2011

Economist: $100 Bil in Muni defaults

SP/Investortools Municipal Bond Index, which includes $1.27 trillion of municipal debt outstanding, reported $2.65 billion in defaults last year down from $2.9 billion of new defaults in 2009.

Combined defaults of rated and unrated bonds were as high as $8.5 billion in 2008, according to some estimates.

The Roubini report says that relying on the history of low default rates in the municipal debt market is "Pollyannaish."

"Avoiding a crisis will involve real austerity that has only partially been implemented thus far," the report states.