Best of the Bond Market for March 21st, 2012
Top Story of the Day
Tweet and Article by
Albert Edwards: Goldman is Wrong This is as Good as it Gets - Our Take: Albert Edwards is a strategist for Investment Bank Societe Generale who is known for being a stock market “perma bear”. In response to a piece today from Goldman Sachs pushing stocks over bonds Edwards came out with his own piece taking the other side. The full article from Business Insider is worth a full read however here is the meat:
“Have investors already forgotten that, in the mini-recovery at the end of 2010, bond yields surged from 21⁄4% to 31⁄2%. Then too there was a touching level of investor confidence that we had moved into a self-sustaining recovery and that the multi-year bull market in bonds had ended. Only a few funds thought otherwise and remained committed to The Ice Age. These funds saw 30%+ returns in 2011″.
Other Top Stories
Tweet from @BondBuyerJen
Moody’s Warns It May Downgrade Assured Guaranty Our Take: Here is the article from the bond buyer which came out after Jen’s tweet with more info. This is sure to be a story that we here more and more about in coming days as Assured Guaranty insures municipal bond offerings helping municipalities obtain higher ratings than would otherwise be the case. This means that if they are downgraded again that many of the muni bonds that they insure will also be downgraded. We will have more on this here at LearnBonds shortly as well.
Article from @blackrock‘s James Keegan
A Time for High Yield? - Our Take: Great institutional quality research from Blackrock on the High Yield Market. Its definitely worth a full read and here are the highlights from the report:
- Although the economy is slow, we find that most companies remain in excellent health, which makes high yield bonds attractive given expectations for continued low defaults.
- High yield bonds historically generate above-average income, evidenced today by a more than 600-basis-point spread over Treasuries.
- High yield bonds have produced equity-like returns, but with roughly half the historical volatility of the equity market.