During the last financial crisis and recession, many municipal and corporate bonds were subject to precipitous drops. Even as the crisis unfolded, most investors found it inconceivable that stalwart industrial and financial companies would go bankrupt or require government rescues, but they did. This time the window for selling corporate and municipal bonds is still open, but once the herd realizes that financial turmoil and economic contraction will impair the ability to pay across broad swaths of the bond market, it will snap shut.

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