Did Warren Buffett take the recent Federal Reserve warning on municipal bonds seriously?
Zero Hedge is reporting
that Buffett has covered an $8.25 billion muni cds long risk (short
CDS) position, which becomes profitable if muni bonds go up in value.
He has terminated the position 5 years early and has apparently lost a few hundred million by getting out of the position early.
As any Buffett follower knows, he is a long-term investor and rides out
short-term bumps, if he is bailing with a few hundred million in losses,
he is expecting trouble in the muni market.
As I have said before, there is absolutely no reason to own municipal bonds at this time.
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