Friday, June 21, 2013

SERIOUS Bond Market Sell-Off Causes State Street to Halt Cash Redemptions in Muni Bond ETFs

This is not the time to be anywhere near long-term bonds or related investment vehicles, especially municipal bond vehicles.

State Street said it would stop accepting cash redemption orders for municipal bond products from dealers, FT reports.

Tim Coyne, global head of ETF capital markets at State Street, said his company had contacted participants "to say we were not going to do any cash redemptions today". But he added that redemptions "in kind" were still taking place.

The bond market is a train wreck waiting to happen. Muni bond ETFs are the train cars that will be at the point of collision.  .

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