Bill Gross Says QE3 Getting Closer…and 16 Other Top Bond Market Stories

Best of the Bond Market for May 8th, 2012

David Fry: Top 10 Global Government Bond ETFs – This is an awesome piece with everything you want to know about holdings, weightings, maturities, credit quality, and even some chart analysis thrown in.

MuniBondAdvisor: Power Point on Municipal Bond Market Regulatory Issues  (h/t @Cate_Long) – Lots of great info for the muni bond market professional.

Fox Business: IBM Leads Jumbo Deal Foray into the Corporate Bond Market within a half-hour of International Business Machines Corp. (IBM), Berkshire Hathaway (BRKB) and beverage company Diageo (DEO) each disclosed their own three-part debt issues.  Each is “benchmark”-sized, which typically means at least $500 million per tranche. Coupled with four smaller deals, at least $6.05 billion should price today.

Bond Buyer: Muni’s Up on Strong New Issue DemandYields inside three years were steady while the four- to six-year yields fell as much as two basis points. Outside seven years, yields dropped between two and four basis points.

Reuters MuniLand: MuniLand’s Huge Dodd Frank WinThe new rules detail a number of ways that underwriters must disclose their conflicts of interest to states, cities and other entities that issue municipal bonds. But the heart of the new rules addresses the sale of interest-rate derivatives tied to municipal bond offerings.

MarketWatch: US Sells 3 Year Debt at Lowest Yield in 3 Months The Treasury Department sold $32 billion in 3-year notes on Tuesday at a yield of 0.362%, the lowest level since February. Bidders offered to buy 3.65 times the amount of debt sold, above the average of 3.46 times at the last four monthly auctions.

Bloomberg: California Lawmaker Pushes New Municipal Bankruptcy Limit Public employee unions are backing the new bill by state Assemblyman Bob Wieckowski, the Fremont Democrat who wrote the law approved in September. It requires municipalities to undergo an evaluation or declare a fiscal emergency before filing for bankruptcy.

Bloomberg: 6 Months into Alabama County Bankruptcy Services Fray (h/t @munilass) – These are symptoms of the financial collapse of Jefferson County, population 660,000, which six months months ago filed a record $4.2 billion municipal bankruptcy. The county’s inability to provide services once taken for granted is becoming increasingly noticeable as hundreds of workers leave.

Market Folly: Doug Kass Presentation on the End of the Bond Bull Market – In case anyone did not know already Doug Kass doesn’t like bonds at the moment.  Here’s why (full presentation included at the above link)

– Flight to safety premium erodes
– Muddle through economy gains steam
– Fed policy on hold – leads to natural price discovery
– Inflation on ascent
– Housing recovering (thinks housing could add 1% to US GDP next year)
– Stocks vs bonds approaching reallocation trade
– US fiscal imbalances are not being addressed

FT: Fixed Income Traders Face Risk Model Change (h/t @JLNIR) – Credit Suisse, Deutsche Bank, UBS and other European banks with big fixed income desks are likely to be hit hardest by the global proposal to change the way banks measure risk in their trading books, bankers and analysts said.

Other Bond Market Thoughts from Twitter Today



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