Negative read on the Muni market, from one of the brightest in the business...

"basically, 50% of muni market is wrapped by bonds insurers such as MBIA"....

"All of the monolines have higher probability of going belly-up due to subprime exposure. If the monolies go down, you have a muni market that is rated AAA and gets decent, low funding levels due to the credit rating, which suddenly becomes rated much lower..."...

"In other words, those bond spreads widen, a lot, and municipalities can barely fund themselves...."

"The important part is that this is not just a small part of the munimarket...it's >50% of it..."

-The Bond Guy