“Did Warren Buffett take the recent Federal Reserve warning on municipal bonds seriously? Zero Hedge is reporting that Buffett has covered an $8.25 billion muni cds long risk (short CDS) position, which becomes profitable if muni bonds go up in value. He has terminated the position 5 years early and has apparently lost a few hundred million by getting out of the position early. As any Buffett follower knows, he is a long-term investor and rides out short-term bumps’ if he is bailing with a few hundred million in losses, he is expecting trouble in the muni market.”
http://www.economicpolicyjournal.com/2012/08/warren-buffet-bails-out-of-muni-bonds.html
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