U.S. Muni Market: Political & Governance Risk (Part 1)


Senior Market Analyst at Interactive Brokers

IBKR senior market analyst Steven Levine discusses political and governance risk issues with Ed Grebeck, global debt strategist and CEO of Tempus Advisors. In this first of a three part series, Grebeck defines the difference between what constitutes a political versus a governance risk and highlights why he believes individual investors may be more adept than ratings agencies to evaluate them.

He also provides some examples of governance risks in the muni market that may ultimately lead to losses for muni bond investors, including unfunded pension liabilities and sanctuary cities.

Visit IBKR Traders’ Academy for a full course on municipal bonds!

Sign up for our daily newsletter today!

Produced on February 12, 2020

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Interactive Brokers LLC, its affiliates, or its employees.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Disclosure: Author Security Holding: No Positions

The author does not hold any positions in the financial instruments referenced in the materials provided.