Uh-Oh! Muni Salesman Are Fighting 'Gloom'

Photo by: John Carney

Is there anything scarier than salesmen who start claiming that attention to the flaws in their products is nothing but "spin?"

The Wall Street Journal is reporting that the muni business is "fighting back" after 21 weeks of consecutive investor outflows. The problem, as they see it, is not with their products. It's with the people who they are trying to sell their products to. Those investor types are just too damned gullible, believing the likes of that Meredith Whitney woman and others who say that many munis are at risk of defaulting.

The Journal quotes marketing materials for an industry conference last week that insisted: "The Spin Stops Here."

"In a recent brochure, the Bond Dealers of America, the conference co-host, said 'undisciplined statements' about state and local finances were hurting the market," Michael Corkery writes for the Journal.

You see? It's all just a triumph of "statements" over reality.

It's almost as if the muni salesmen are reading from the script written by the mortgage bond guys in 2005. Remember them? They were the people who insisted that all the "talk" of a housing bubble was irresponsible.

If you've forgotten how the mortgage finance people tried to claim that concerns over the housing bubble were spin, just take a look at a 2005 pamphlet from the Mortgage Bankers Association, entitled, "Housing and Mortgage Markets: An Analysis."

It's full of gems like this:

"The appropriate stance is one of caution, not of panic. It is important that policymakers and others recognize the fundamentals that are driving the housing market. We need to understand the benefits that can be derived from innovations in the mortgage market. And, we need to identify the mitigating factors that are present in today’s mortgage and financial markets that would prevent a regional downturn or other localized decline from creating a more widespread problem."

How'd that work out?


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