Financial Times FT.com

On Wall St: Deleveraging jolts munis toward normality

By Aline van Duyn

Published: April 4 2008 16:39 | Last updated: April 4 2008 16:39

There are plenty of investors who are cheering the departure of the hedge funds that have in the last year or two invaded their turf.

Take the US municipal bond market. For decades, it was rather sleepy and predictable. Then, it became “hot” – prices soared and yields fell sharply as highly leveraged investors, mostly hedge funds, placed huge bets on “munis”.

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