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Over half of the municipal bond defaults recorded last year and nearly 80% of the $3.02 billion total defaulted debt occurred between July and September.
Bond defaults are low.
How widespread have muni bond defaults been?
But muni bond defaults are rare.
In 2001, the rate of corporate bond defaults was 12.9percentt, a record, according to Fitch.
This would not mean widespread bond defaults, he said, just greatly narrowed local budgets.
Morgan Stanley bought protection against bond defaults from MBIA, an insurer that guarantees bonds.
The company blamed falling stockmarkets, bond defaults and a falling dollar.
So why are so many people afraid of a looming wave of bond defaults?
If a bond defaults, the losses are passed directly to individual bondholders.
"There's not a doubt on my mind that you will see a spate of municipal bond defaults.
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