One consequence of the credit crunch is that even with a Fed Funds rate of 2%, interest rates for everyone are going up.

Nowhere is this more obvious than in municipal bonds, where you also have the collapse of the monoliner insurers making getting a good rating more difficult.

The article gives an example, where the Bay Area Toll Authority refinanced $700 million in bonds at 5.33%, when last year it was 4%.

That’s an additional $9.31 million that they have to carry, and we are seeing this across the country, so new roads and bridges, and needed maintenance on existing infrastructure, are all being deferred.

I don’t see it getting any better for a while.