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Outside The Stocks: Munis

Monday, 22 Nov 2010 | 5:55 PM ET

In Monday’s power rankings, the Fast Money traders take a look at the top five states with the biggest budget gaps.

They follow:

States With Biggest Budget Gaps

California - $17.9 Bln.
Illinois -$13.5 Bln.
New Jersey - $10.7 Bln.
New York -$8.5 Bln.
Connecticut -$5.1 Bln.
Source: WSJ

Municipal bonds have been hard hit because of concerns about states' spending into year's end. But could this be a buying opportunity instead?

For insights we turned to top muni bond expert Alan Zafran of Luminous Capital. He tells us munis may be oversold due to all the negative headlines and recommends putting a few names on the radar in anticipation of a bounce:

iShares S&P National AMT-Free Bond Fund
BlackRock Muni Intermediate Duration Fund
Trade Thesis: Year-End Muni Bond Bounce

But these are trades, he adds. Trends hitting the market on the long end of the curve may persist. I would not recommend buying long-term muni bonds as a long-term investment at this point.

Outside the Stocks
How to play the muni bond crisis, with Alan Zafran, Luminous Capital Partner.

Hear more from Zafran. Watch the video now!




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Trader disclosure: On November 22, 2010, the day this video was recorded, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU), (C), (NUE), (MSFT), (INTC), (BTU), (GS); Weiss Owns (MEE), (TSN), (QCOM), (JWN), (UAL), (CYT), (DIS); Weiss Is Short (UNH) Calls; Weiss Is Short (LCRX); Finerman's Firm Is Short (IJR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (IWM); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman Owns (AAPL); Finerman Owns (BAC); Finerman's Firm Owns (GENZ); Finerman's Firm And Finemran Own (HPQ); Finerman's Firm And Finerman Own (JCG); Finerman's Firm Owns (JPM) Leaps, Finerman Owns (JPM); Finerman's Firm Owns (SKS); Finerman's Firm Owns (TGT); Finerman's Firm Owns (WMT); Seymour Owns (AAPL), (BAC), (INTC), (IPI), (POT), (HPQ); Jon Najarian Owns (SNDK); Jon Najarian Owns (AKAM); Najarian Owns (CRUS), Is Short (CRUS) Calls

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