Why Investors Are Gravitating to Municipal Junk Bonds

The video discusses the attractiveness and risks of investing in municipal bonds, especially in a low interest rate environment. It highlights the potential returns from distressed state and local governments, such as Puerto Rico, and the assumption of federal bailouts. The discussion also covers the impact of economic expansion on investment decisions, drawing parallels to the 2006 subprime crisis. The focus is on actively managed funds investing in municipal junk bonds, including tobacco settlement bonds and struggling shopping malls.

What lessons can be learned from the economic conditions leading up to the 2008 financial crisis in relation to current municipal bond investments?

Discuss the risks associated with tobacco settlement bonds and their appeal to investors.