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Article: Portfolio manager sees old-fashioned liquidity squeeze starting to appear. (Patricia M. Dolan of Prudential Investment Advisors)(Municipal Market) (Column)
- Article from:
- The Bond Buyer
- Article date:
- October 26, 1994
- Author:
CopyrightCOPYRIGHT 1994 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Municipal bonds surrendered 3/4 point yesterday, and at least one portfolio manager sees more trouble ahead. "I think we're involved right now in a yearend iiquidity squeeze, and it's going to get a lot worse before it gets better," said Patricia M. Dolan, a managing director at Prudential Investment Advisors. As a result. municipals likely will "severely underperform" the taxable market going forward, she said.
Dolan said the flow of cash into tax-exempt mutual funds has been either flat or negative at a time when the Street will be getting ready to close its books for the year.
"We've been seeing cash-flow erosion all year. but it accelerated in ...