The Financial Lexicon: Prepare For The Possibility Of Much Higher Bond Spreads - Given the number of new investors flocking to high-yield debt in recent months/years, there are likely many people who have never experienced what it feels like to go through a spread widening period in corporate bonds.
Bloomberg: DoubleLine reaches $50 Billion in assetts in under 3 years – DoubleLine Capital LP has reached $50 billion in assets under management (AUM), less than three years after the investment management company was founded on December 14, 2009.
CNN Money: Fiscal cliff will roil state budgets - States would see massive cuts in federal spending should the nation fall over the fiscal cliff, according to a new report. But they could also see their tax revenue jump as federal tax rates rise.
Business Insider: – Here’s why the cracks in the junk bond market could be ominous for stocks. – Fridson found that private equity bought companies because it was the cost borrowing money was cheap, not because the buyout targets themselves were cheap.
WSJ: – Do junk-bond investors have garbage for brains? – Are investors – largely individuals and their financial advisers – who have so far this year pumped some $37 billion into high-yield (“junk”) bond funds irrational?
iShares: – High yield: Be sure to understand the risk. – Most investors are aware that high yield bonds have greater credit risk than many other fixed income sectors. But what might be less appreciated – especially by investors who are new to high yield — is how challenging high yield liquidity can be at times, and how rapidly high yield bond prices can fall in a deteriorating market.
Cate Long: – Credit ratings agencies not up to the task. – The SEC is out with its second annual examination of credit rating agencies. A little known 2006 law, the Credit Rating Agency Reform Act, gave broad authority to the SEC to inspect raters as if they were broker dealers, and is what empowers the SEC to annually inspect raters.
Artemis: – Size of the catastrophe bond market hit record high at end of Q3. – 2012 has been a landmark year for the catastrophe bond market, with the second highest level of issuance on record for a single year which, has now taken the cat bond market to an all time high in terms of size. But could hurricane Sandy blow the wind out of their sales?
ETF Trends: – High-yield bond ETFs getting junkier. – Junk bonds have been attractive to investors for their high yields, the reward that comes with investing in companies with speculative grade debt. However, the near future is beginning to get muddled for junk bond exchange traded fund investors as the Presidential election is over and bigger problems loom.
Field of Schemes: – “Fiscal cliff” talks target tax-exempt bond subsidies. – As part of talks taking place in Washington to reduce the deficit and avoid the “fiscal cliff”, consideration is being given to reducing or eliminating the tax-exemptness of tax-exempt municipal bonds, which are only one of the key government subsidies driving the last 25 years of stadium building.
Learn Bonds: – Why you should dump your savings account for savings bonds. – A number of factors have to come together to make replacing your online savings account with a TreasuryDirect account, not only a good financial decision, but a practical one.
rrstar.com: – Illinois pension mess unfixable? Let’s hope not. – We knew Illinois’ pension mess was bad, but is it “unfixable,” as the Civic Committee of The Commercial Club of Chicago contends?
Barron’s: – UBS says, plan for higher tax rates, consider capital gains. – UBS is the latest to weigh in on the fiscal cliff’s impact on the muni market, taking a look at the tax and capital gains issues confronting investors.
Reuters: – Yield-starved investors grab emerging market corporate bonds. – Emerging market corporate bonds are attracting non-traditional buyers who are starved for higher yields and drawn to their competitive economic backdrops.
Gross: Stocks are down because taxes on Capital are going up.HY Bond liquidity is declining.
— PIMCO (@PIMCO) November 16, 2012
Yay!!! $0.08 of real GDP per dollar of new debt!bit.ly/TIot60
— David Schawel (@DavidSchawel) November 16, 2012
Bond yields are NOT rising in a wayy to confirm stock market intraday euphoria.Patience.
— Michael A. Gayed,CFA (@pensionpartners) November 16, 2012
— Cate Long (@cate_long) November 16, 2012
Munis feel like they can’t be stopped. market had another up day yesterday.Demand extremely solid, new issues again scooped up -ziegler
— Taylor Riggs (@TaylorRiggs_BB) November 16, 2012