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MMA Muni Outlook November 2010

Market Summary

Worst November Performance in Recent History

The municipal market performed atypically in November - post-ing a negative month of performance. Historically, the seasonal bias is positive. MMA’s municipal price index posted a loss of -2.98%, eclipsing the prior worst November’s of 1993, -1.9% and 1994, -2.3%. Historical severe price declines have often been associated with restrictive monetary policies. The catalyst in 2010 was an apprehensive response by the fixed-income mar-kets to the potential inflationary risks associated with the FOMC’s $600B in additional quantitative easing (QE). The losses were exacerbated by the first meaningful municipal bond re-demptions in 2 years.

MMA Muni Outlook November 2010