Gekko’s Guide to Prosperity: Municipal Mysteries

THE MUNICIPAL bond market was already having a bad year when Orange County declared bankruptcy. Interest rates were up, and bond issuance was down—and as with any of the securities markets, volume drives business.

Then came Orange County, and with it I remembered a line in a letter from a friend: One wave washes all away. Whatever else happened in the $1.2-trillion municipal market during 1994—and there was a lot, believe it or not—was gone. All those steps toward introducing better disclosure, making prices apparent and available to buyers, and improving the ethics of the business—gone. One wave washes all away. In the public mind, 1994 became the year of Orange County.

JM

About the Author

Joe Mysak

Featured Tags

THE MUNICIPAL bond market was already having a bad year when Orange County declared bankruptcy. Interest rates were up, and bond issuance was down—and as with any of the securities markets, volume drives business.

Then came Orange County, and with it I remembered a line in a letter from a friend: One wave washes all away. Whatever else happened in the $1.2-trillion municipal market during 1994—and there was a lot, believe it or not—was gone. All those steps toward introducing better disclosure, making prices apparent and available to buyers, and improving the ethics of the business—gone. One wave washes all away. In the public mind, 1994 became the year of Orange County.