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Principles of Finance Videos 166 videos
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Principles of Finance: Unit 5, Why Do Muni Bonds Exist Anyway? 2 Views
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Description:
Why do muni bonds exist? Why do any of us exist? Sorry. We got real Camus on you there. (Real answer: to build and maintain the infrastructure of cities.)
Transcript
- 00:00
Principles of finance a la shmoop why do muni bonds exist anyway well
- 00:07
their purpose in life is to build and maintain the infrastructure of cities [Construction workers building]
- 00:13
parking lots, sewage systems, dams they all have to be maintained or people die
- 00:18
yeah dam is right so by giving cheap money in the form of the federal
- 00:22
government "waiving taxes" that would otherwise be do the national [Uncle Sam holding football outside government building]
Full Transcript
- 00:27
government is giving over management control to the local government remember
- 00:31
the bureaucrats in Washington have no idea whether the parking structure
- 00:35
should be four storeys or three but the local merchants do in making muni bonds
- 00:40
an attractive investment the government gets investors who are local who have a [Investors discussing matters]
- 00:45
stake in the game and who have a vested interest in the investment working over
- 00:50
long periods of time so if there are exogenous crazy events like an [House with part of the wall missing]
- 00:55
earthquake or a stampede or an outbreak of plague or free-love then the local
- 01:01
power players quickly figure out how to fix it if everything had to be routed [People in a meeting discuss how to fix issues]
- 01:05
through Washington... Well, scant few things would ever get done quickly so treat
- 01:10
your bonds like your USDA organic 100% biodynamic avocado toast and free-range
- 01:16
eggs and you know keep them local
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