Texas Munis Unscathed by Harvey–So Far

Author: , Post Date: September 1, 2017
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The Cost of Harvey

Cumberland Advisors Market Commentary
by Cumberland Advisors

Aug. 30: Damage estimates from Hurricane Harvey continue to rise as the storm moves and stalls, dropping record rainfall. And there are predictions of more rain this week. Estimates of damage have grown to $100 billion or more. Katrina estimates ranged from $105 billion to $118 billion. Another perspective is that Harvey’s total cost is less than estimates of the cost of a standoff on the debt ceiling in Congress.

Investors’ expectation of a bump in economic activity as the region recovers may be reflected in the lack of noticeable price changes for Texas municipal bonds—at least not yet. The price stability may also reflect a flight to quality and lower Treasury bond yields. This protracted disaster may have different market outcomes than previous disasters, as investors grow increasingly numb to such events. Geopolitical events aren’t causing as much investment-price volatility as one would think.
— Patricia Healy

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