Press Release: 01/16/03 11:00 AM Eastern
MunicipalBonds.com
Secret Deal Cut Ten Years Ago Continues to Harm Investors
Worst Municipal Bond Spreads of 2003
In 1994 there was a secretive back room deal
cut between the SEC and the Municipal Bond industry. The problem back then
was Muni pricing. There were these huge spreads. The SEC wanted
dealers to disclose their mark-ups to customers for each Muni transaction.
The Muni industry, including the Municipal Securities Rulemaking Board
(MSRB), did not want this. So a deal was made. The promise was the
MSRB and Muni industry would develop Muni "price transparency" and,
in return, mark-ups and mark-downs would stay
undisclosed and off confirmation slips.
The MSRB and Muni industry did initiate "trade reporting"—which included
price information. But they didn't release the information. They have
delayed and stalled and delayed some more. The official MSRB excuse is they wanted
to release price information in "measured steps." On June 23, 2003 the
Muni industry took a measured step and finally began releasing full
next-day trade and price reports.
As I fought for and got more price data over the years, the thing that has
always been apparent is that Muni pricing is still a problem. The deal
the SEC cut has not worked. The SEC should reconsider.
Furthermore, the MSRB has not worked. They don't represent the investor.
They have an annual multi-million dollar budget yet they need more than
ten years to develop Muni trade and price
reporting. My comment may sound harsh, but it's true; the MSRB is taking
longer to get to Muni price transparency than it took for this great
Country to go to the Moon! We're not even at "real time"
reporting yet!! Perhaps the MSRB has been measuring steps based on a Mars
landing.
Municipal Bond trade reporting was to lead to price transparency which
would in turn lead to a thing called Muni "fair pricing." We're not even
close.
Worst Spreads and Negative Yields of 2003
The following Municipal Bond price reports
continue are basic analytical series. Please take time to review the
"Two-Trade" and "Negative Yield" reports. We continue to demand from the
MSRB and Muni industry they release thier dedicated error reports to us.
Until then, we will continue to report data as it is released to us in the
"next-day" reports. Also, the negative yields shown are not are
calculations. The negative yields are as reported by the Muni
broker/dealer.
If you have complaints please forward them to the Securities
Exchange Commission.
2003 One Hundred Worst Bid/Offer Spreads:
http://www.municipalbonds.com/redflag/report2003.html
2003 One Hundred Worst Bid-side Spreads:
http://www.municipalbonds.com/redflag/report2003bid.html
2003 One Hundred Worst Offer-side Spreads:
http://www.municipalbonds.com/redflag/report2003offer.html
2003 One Hundred Worst "Two-Trade" Spreads:
http://www.municipalbonds.com/redflag/report2003two.html
2003 Negative Yields list: (total 2003 Negative Yields: 6,200)
http://www.municipalbonds.com/yields/report2003.html
Worst Spreads and Negative Yields of 2003/Q4
For those who are tracking the numbers quarterly, here are reports for the
4th Quarter 2003:
2003/Q4 One Hundred Worst Bid/Offer Spreads:
http://www.municipalbonds.com/redflag/report2003Q4.html
2003/Q4 One Hundred Worst Bid-side Spreads:
http://www.municipalbonds.com/redflag/report2003Q4bid.html
2003/Q4 One Hundred Worst Offer-side Spreads:
http://www.municipalbonds.com/redflag/report2003Q4offer.html
2003/Q4 One Hundred Worst "Two-Trade" Spreads:
http://www.municipalbonds.com/redflag/report2003Q4two.html
2003/Q4 Negative Yields list: (total 2003/Q4 Negative Yields: 1,982)
http://www.municipalbonds.com/yields/report2003Q4.html
Contact: Kevin Olson
Company: MunicipalBonds.com
Phone: 415-922-7870
Email: Kevin@MunicipalBonds.com
URL: http://www.MunicipalBonds.com
 
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