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Head of BlackRock's municipal group Peter Hayes gives tips for investing in the muni market.
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Symbol bonds the parachute that you need in case we go off that fiscal cliff has -- the year.
-- Hayes is the -- of black rocks Muni bond group with more than a 105 billion dollars.
In assets under management -- Peter great to see you wish you are here but thanks for being here nevertheless those severe.
And taxes if they go up at the end of the year tax free debt would seem like the place to be is that already factored -- to the -- market right now.
It's actually not oddly enough from the big sell off we had probably a year and a half ago late 2010.
Really 2011.
-- with a market -- it almost priced out the tax benefit which is why you're seeing so many crossover buyers.
The buyers who -- buying -- for the tax exemptions so.
If you do get a change in taxes that's favorable to the market.
One would be the Medicare tax it takes effect early January and -- would be the expiration of the bush tax cuts higher tax rates.
Would mean more demand would actually hopefully be better for for the market so I think in that case you would see -- Munis perform pretty well.
What about wind do you think that that could get faster again and what timeframe are you looking at later in the year.
I think election election seems to be so important not -- only for the -- market for for the the broader economy for other markets as well I think -- and the market begins the sniff out who the winner might be.
Who what the balance of power looks like in Washington I think that's when the market will begin to factor in.
Any kind of change in in policy and there's a lot that can happen even after post election.
Are they going to be able to get anything normal appeal lame duck it seems that both sides want a change in tax policy.
But it seems so far part -- the timing of that really remains uncertain.
Despite all the headlines particularly about California cities going bankrupting concerns about.
The state of municipalities.
And the localities and -- ounce.
Munis is still done quite well this year a national long fund is up the average is up 7%.
So far this year repair in terms of demand for municipal bonds are you seeing that -- heart just because of the headlines.
Oddly enough we so if you think back -- a year and a half ago.
Demand was heard from negative headlines in this time around we haven't seen at all in fact we've seen about thirty billion dollars -- to open and mutual fund municipal mutual fund flows so far in 2012.
So the demand really continues.
And just we're in this search for yield -- in this income driven environment.
As long as that continues we we don't really see that demand letting up anytime soon now I think if we get.
A lot of headlines over the next several months -- they do continue to be negative you might see some investor pull back.
We're not -- We're index outside of California we're not expecting any any major events in the market to be disruptive -- great talking thank you so much as always Peter -- apply.
