Jim Grant’s contention is that you don’t need to be a stargazer to be worried about Munis. You just have to look at the low interest rates. In his view, bond yields do not compensate buyers for the interest rate risk, let alone other risks like problems with municipal finances. He likes higher yielding Mortgage REITs like Annaly Capital Management (NLY). Bill Gross also likes Annaly. (Disclosure: We publish Annaly’s blog posts).
Jim Grant’s video with Bloomberg’s Pimm Fox is below.