It's Getting Cozier Under This Muni Security Blanket

With the economy reeling, federal aid reduced, and costs still rising, state and local governments have rarely faced quite so much malaise. An odd time to buy into a municipal bond insurer? Not in the view of New York money manager A.R. Schmeidler. Despite the distress being suffered by localities everywhere, Schmeidler has been buying the shares of the top muni insurer, MBIA, the parent of Municipal Bond Investors Assurance. "It's an earnings story and an interest rate story," says Schmeidler analyst Stuart Crane.

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