ANALYSIS : MUNIS BOND - OTHER TIME BOMBS ( other than Detroit)

This week , the city of Detroit filed for chapter 9 bankruptcy protection. The city has debt obligation of $18.5 billions dollars. If you held Munis ETFs, such as MUB, this news didn't really affect the price, since most of these ETF have very little exposure to Michigan. However , they have exposure to other "time bombs" : Illinois, and California

California pensioner are well paid, most of them receive 100k + each year from their pension. However , new accounting practice will force California to show that their pension is underfunded by $329 Billions. Other city in similar situation are :

New York City
Baltimore
Miami
Oakland
Scranton

Let 's hope these cities don't have the same faith as Detroit. Can you imagine Los Angeles declaring bankruptcy ?

Cheers

Algo