As BAB Deluge Picks Up Correlations Are Slipping

Seymour, Dan
November 2010
Investment Dealers' Digest;11/5/2010, Vol. 76 Issue 41, p1
Trade Publication
The article focuses on the correlations between Build America Bonds (BABs), which is the taxable municipal bonds created under the American Recovery and Reinvestment Act in February 2009 and other assets. It says that the correlations are expected to collapse due to the closure of taxable state and debt sales of local government in 2010. It adds that the supply and the expiration of BABs program will unbind the spread between taxable municipal bonds and Treasuries from other types of spreads.


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