Are Muni Bonds Perfectly Priced? - UCLA Anderson Review

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In a perfectly priced world, municipal bonds (interest paid tax-free to investors) would pay interest precisely equivalent to a (taxable) Treasury bond minus the investor’s tax burden on the Treasury (and also adjusted for liquidity and credit quality of the issuing state or municipality). In reality:

Municipalities pay a premium to attract investors, making muni bonds a relative bargain for investors.

The pricing on average is as described above, a Treasury minus the other factors, an example of an efficient market.

Cities and counties somehow get away with paying less than in a perfect market, penalizing the tax-avoidant investor.

Read on: The irony here is that investors who’re seeking to avoid paying taxes are, by overpaying for muni bonds, subsidizing government.

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Theories abound on why some human settlements turned into large and complex civilizations, and others didn’t. A recent historical and global databank allows testing of such theories, and it turns out that:

Irrigation and trade drove development of major civilizations.

Military technology like cavalry, along with agriculture, had the most predictive power.

A dominant religion based on moralizing gods that, through human sacrifice, intimidated people.

Read on: The spread of warfare using horses and metal weapons and armor was the single biggest influence on development of major civilizations.

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Nvidia stock is up roughly 160% since ChatGPT was released Nov. 30, 2022, and little surprise: The company makes chips that power such artificial intelligence. Other companies’ stocks rose because their workforces seem likely to become more productive using AI. Choose the jobs most impacted (likely to be eliminated) by AI:

Shampooers and meatpackers.

Stonemasons and steelworkers.

Telemarketers and computer programmers.

Tailors and surgical assistants.

Read on: Companies that employ workers vulnerable to AI saw their stocks gain immediately after ChatGPT was introduced.

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Trade tensions between the U.S. and China hurt both economies. Other nations gained or lost depending on the goods they manufacture and export. Among the winners:

Vietnam and Korea

Ukraine and Colombia.

Read on: The Asian countries made goods that replaced Chinese goods that were restricted, while Ukraine and Colombia’s goods tended to be complements to goods hit by tariffs.

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When Boise, Idaho, home prices soared — in 2021, 28.7% against a national average gain of 17% -— it shouldn’t have been so surprising because:

The Kardashians had begun tweeting from Boise the year before.

Boise State’s football team had appeared in 18 straight bowl games.

People from Los Angeles had been migrating to Boise for decades, and soaring home prices in LA translate into even bigger gains for a city less than one-tenth LA’s size.

Read on: Established migration routes from so-called super cities are predictive of price changes in a group of smaller cities.