As earnings season opens it is helpful to check to see if companies you own or have an interest in will be reporting. I was reminded of this site US Earnings: Company EarningsCalendarby The Kirk Report this morning.
State tax receipts are being pounded by lower incomes and by increasing entitlement programs. Almost all states are in deficit. California, for example, will face a $44 billion deficit in the next sixteen months. Some draconian measures are being proposed. Among them, by the Govenator, is to cut five days from California’s school calander, thereby saving $1 billion.
One would think that municipal bonds would be severely crimped by these events. How, one might ask, will town, cities and states pay interest on their bonds? Is default around the corner?
In a different economic environment I would agree. But, as I am reminded hourly, these are special times. Obama has already mentioned his intentions to not allow default. Today, Chuck Schumer has said States can expect $80 billion for schools: Schumer for education, medicaid and other programs. Of course, this is just a proposal, it would have to weather a congressional vote.
I am thinking that muni’s positive run, which began about December 15th, may not be over. There are two ETFs that I have looked at: MUB and TFI. Both pay monthly. MUB’s dividend has ranged from 25 cents to 39 cents. Current yield is about 3.50%, it charges 1/4 of 1 percent management fee. TFI charges 0.20 management fee and pays out five to seven cents monthly over the last year. Current yield is 4.16%.
