American high net worth individuals are up to their ears in tax free municipal bonds. Many loaded the boat expecting a Clinton win which would lead to higher tax rates and boost the value of tax free investments.
Instead, we got a Trump win. This dramatically chops the value of any tax free instrument, especially muni bonds. If you don't believe me, look at the chart below showing the sharpest selloff since the Great Crash.
The last time muni bonds fell this fast, analyst Meredith Whitney predicted that the number of local government defaults would explode to 2,000. In the end, I think, we only got two defaults, both in California.
I have spent the last half century watching professional money managers overweight market tops and underweight the bottoms. And you wonder why I manage my own money.
This is why global bond market losses since the November 8th presidential…
