Patricia Healy
In the depths of the muni market plunge back in March, many feared that the sky had fallen and that municipalities would not be able to manage their services and debt repayment.
The initial fall in prices was due to a collapse of liquidity, when muni money market funds had no one to sell to – until the Fed stepped in. Concern lingered because no one knew what the pandemic would bring. The Cumberland Despair Index combines the COVID-19 infection rate of a municipality with its unemployment rate – and in some cases this is a big number. The index highlights possible stress and helps to direct our analysis.