IBJOpinion

Armageddon does not lie ahead

February 19, 2011
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IBJ Letters To The Editor

Much has been written in the financial press recently [including a story in the Feb. 7 IBJ], most of which has been negative, regarding the state of the municipal bond market. The “Great Recession,” some say, will lead to abnormally high rates of default by issuers and could potentially lead to anarchy.

Some pundits have even attempted to draw parallels to the sovereign debt crisis in Europe. These irresponsible comments by a select few have caused considerable fear in investors’ minds and, consequently, disrupted an otherwise fluid and stable market.

We at City Securities Corp. disagree with those predicting Armageddon. It is our belief that the vast majority of municipal issuers nationally are in sound financial condition. Certainly there are some municipalities that have acted imprudently and contributed to their own financial distress. Others issued debt to be repaid from economic activity that failed to materialize due to the recession.

However, together these scenarios represent only a small number and dollar amount of securities relative to the overall municipal market. In Indiana, one of only a handful of states rated AAA by Moody’s and Standard & Poor’s, investors should feel very comfortable with their municipal bond holdings.

All investments, including municipal bonds, have some level of risk. Investors must realize there are many different types of municipal bonds backed by different streams of revenue. As a result, proper due diligence must be performed before investing. City Securities has been providing that due diligence and counseling investors since 1924. We believe that recent market dislocation has created great investment opportunity. As we have for 86 years, we’re advising our clients which tax-free bonds are appropriate to take advantage of this opportunity.

Armageddon is not around the corner, particularly in Indiana.

____________

Mike Bosway, CEO
John Peterson, Chairman
City Securities Corp.

 

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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