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Credit troubles atypical: Collingswood in peril
By Jane Roh
Sept. 18, 2011
Collingswood’s downgrade to junk status by the ratings agency Moody’s may have raised questions about whether other New Jersey towns are in danger of seeing access to credit dry up.
Most are not.
Nine months after Wall Street analyst Meredith Whitney sparked a sell-off by predicting — in a “60 Minutes” segment — a massive crash in municipal bonds, the market is relatively stable.
“Although the economy has affected local government finances, it generally hasn’t affected them strongly enough to cause defaults,” said Mitchell Savader, CEO of Manhattan-based Savader Asset Advisors.
“We have had a negative outlook on both the local government and state sectors now for three years,” said Jack Dorer of Moody’s Investors Service. “No question there are pressures in the marketplace. But the vast majority of municipalities is holding up very well.”