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January 18, 2011

Discussing the Threat of a Municipal Debt Crisis

For the past couple of months, Meredith Whitney has led the increasing discussion over the threat of a municipal bond crisis. The catalyst of this crisis would be increasing interest rates coupled with state and local governments inability to fund existing interest payments, let alone increasing payments. While I have not studied municipal debt as much as our national debt, it is certainly something to watch, especially considering the rising debt obligations of state and local governments tied to Baby Boomer pensions.

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