Book Review: Encyclopedia of Municipal BondsMarch 20th, 2012 by David Waring
By David Merkel from The Aleph Blog
Joe Mysak is one of the true experts in the municipal bond markets, journalist or not. He has covered municipal bonds at Bloomberg since 1999, and has covered municipals since 1981. I have read his work for over 12 years, and I have been impressed.
So when he writes an encyclopedia of Municipal Bonds, it’s gonna be dull, right? There are entries that are short to define simple but important concepts, but the glory of the book are the long articles, because they describe how the municipal market evolved its structure.
It’s not a dull book, if you want to understand how the Muni market came into existence, and how it acts today.
The long articles are the best, and they include:
- The Arkansas Default in 1933
- Auction-rate securities
- Bell California pay scandal
- Chapter 9
- Convention Centers (stop the madness)
- Default (and why it is different for munis)
- Escrowed to Maturity
- Garbage bonds
- The Implosion at Heartland
- House Museums
- How Initiatives and Referendums Could and Could not affect muni financing.
- Muni bond insurance — a topic I have often criticized.
- Jefferson County, Alabama
- Pension bonds, particularly those of New Jersey
- Orange County’s default
- Pension obligations, and their effect on munis
- Moody’s changing their ratings for munis in 2010.
- The effects of derivatives on naive municipal executives, who thought the got it.
- Tobacco bonds.
- Tourist attractions (bad bets for muni bond financing)
- Yield-burning. (using the tax-exemption to earn arbitrage profits of some kind.)
It is the controversies and legal cases of the bond market that have had the most impact on how the market behaves today, and that is how the book covers its topics.
I learned a lot from reading this, and most muni investors would learn still more. This book is well written, and explains the issues in detail, without resorting to unnecessary verbiage.
Who would benefit from this book
Most investors in muni bonds would benefit from this book. If you want to, you can buy it here: Encyclopedia of Municipal Bonds: A Reference Guide to Market Events, Structures, Dynamics, and Investment Knowledge (Bloomberg Financial).
Full disclosure: The publisher asked if I wanted the book. I said “yes” and he sent it to me.
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