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Bahrain well doesn't defaulting to -- foreshadow the bigger implosion in the municipal bond market that we've been waiting for it -- bored waiting for Fox Business senior correspondent Charlie -- joins -- now.
With his take a -- -- fine -- But Meg Whitman Meg Whitman the -- -- that but that with Whitney.
Yet we'll have to whether she's right not -- not still not right well I'm not just it off on this has really come as a surprise when he thought about you know Detroit Charlie.
-- yet I -- good point I mean -- there's two ways a look at Madigan number one it's Detroit.
It's a basket case it's been -- -- case that once the auto industry imploded yet you know that was a bailout you know it's gonna have an impact on revenues of the city very high tax city.
I mean this is a city that's been going into the fiscal -- now for like thirty years OK that being said.
Think of it this way.
This is a big default it's one of the biggest -- might be the biggest default ever.
In -- municipal bond market do defaulting on GO box general obligation bonds.
Somewhat of a precedent if you're Muni bond holder you think the general obligation is the highest.
Raided got a hot at the safest 'cause it's it's the first lien on taxes and there's there's -- and bondholders in a major way.
So here's where when I mean when I've been talking to analysts have to do and capital as -- they try to figures out I mean we should point out that.
Municipal bonds are our our investments that that are essentially held by our viewers.
People would a few bucks to invest one -- state taxes we'll battle and by minister Abbas and his anything about an -- right and that's why this story's important to them I would say this.
Following -- financial crisis and that you have to know that Detroit was good was it was a big time trouble did clarkin good -- -- analysts actually predicted back in 2011.
We're gonna try to get that -- sometime today I think he's lost some traffic some -- happens I'll.
Plus we're Miami I think he's on coyotes are right now I'm gonna tell Ashley you have -- -- avenue cafe.
Versailles -- -- -- where -- -- anthrax and it anyway it.
But anyway stick.
Hey guys I'm sorry just -- noise and people don't show up for this post.
Anyway -- -- the way to look at it if you're the average investor.
Yes states in the states and cities are coming under tremendous pressure -- upon the financial crisis.
Municipal bond market is not one market it's many markets down -- -- a diversified portfolio if you did know Detroit was in trouble.
You shouldn't -- you know I'm looking in the right market -- Diversified product that is opportunity and very excited and very rich look what's going right now I don't get people are stupid gotten you slept in -- -- California now here's the thing here's -- Meredith Whitney's prediction.
He's he's never going to be right to the extent to which he said but say that this big deal -- premise about.
You know fiscal problems on states and cities are are is not accurate but translate that and that's what she supposed to as a financial analyst into an investment.
To say that you you know the market is -- implode now we're beginning to close not right because California is actually seen.
Increased revenues from what I understand and job growth.
The State's fiscal that they change your way you book the pension obligations that's right now even a larger cities like Los Angeles and San Francisco have higher son is that they -- and so it's changing and it's it's increasing the credit receiving and I'm OK so -- -- -- you but I'm just telling you that you know I worry about these are new investments that are gonna -- overnight.
Is ridiculous and you know you play the game until you can't -- and -- -- no domino effect of Detroit happy I think I think he had I I think zero.
Broadly -- the -- -- analysts I talked to I think.
We -- it could be an issue if you're in Michigan.
You know when a general obligation of a city a big city.
-- is defaulting.
Those bonds in that state will pay a price -- investors will be leery about other bonds and the demand higher yields IE lower prices.
And that will close those cities more money that's what this level we should point out though.
That -- ever gonna point pick a city that would implode in this recession it would have to be default a Detroit.
We sure to point out one other thing Detroit.
For example was its main industry was build out yep and it didn't survive.
New York its main industry to banks was bailed out and -- -- -- -- fairly well even -- we do have been.
You know there's a lot of reasons for that number the big reasons banks.
Make a lot of money no matter -- -- so -- you get set up often.
But -- it's -- I guess.
It's -- -- primarily it's happened to me in the past in my life in high school few times.
And I don't you don't have -- -- -- and I still economic I've done I know where he is he's on coyotes you know.
He sits in a cafe college crab restaurant column that Joe's Joseph cat that's in Miami Beach -- which is right Miami it's a little of that get it right.
I think Charlie -- -- stand up -- but Gasparino.
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