Best of the Bond Market for July 3rd, 2012
The Guardian: Barclays has dragged the Bank of England, and the last Labour government, deeper into the Libor scandal. – The email goes on to show that Diamond implied that other banks have been submitting rates that did not reflect their true cost of borrowing, and concludes by suggesting that Tucker had suggested that Barclays Libor submissions did not need to be so high.
The Huffington Post: Bob Diamond’s Full Memo on LIBOR conversations with the Bank of England. - Mr Tucker stated the levels of calls he was receiving from Whitehall were ‘senior’ and that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently.
Barclays: had 13 “principal documented contacts” with FSA on Libor, 12 with Fed , 2 with BoE – CNBC citing RTRS
— Chris Adams (@chrisadamsmkts) July 3, 2012
ETF Replay: – Generic 60/40 Stocks to Bonds Allocation Crushes Hedge Funds so far in 2012 – see chart.
Research Puzzle Pix: A look at the performance of the Top Bond ETFs in the First Half of 2012 – TLT (Long Term US Treasuries), LQD (Investment Grade Corporates), and HYG (High Yield Corporates) were the top performers, TLT by far the most volatile though. See chart in the article.
Trade With Pete: Who is Right? Equities vs. Fixed Income – On a year to date basis it seems both stocks (SPY) and bonds (TLT) are positive on the year. So both offensive and defensive investors are happy for now.
Learn Bonds: Should You Invest in World Bond Funds? – Two leaders in money management cannot agree on the type of world bond fund one should hold. As there is a chance that implementing this could backfire and increase volatility if not done correctly, I would not recommend World Bond Funds for for most investors.
BusinessWeek: The Roaring Revenge of ‘Investment Grade’ Bonds – Thanks to brisk demand from investors—who are willing to accept smallish yields— highly rated corporate bonds are quietly enjoying their best stretch in years. In the second quarter, investment-grade U.S. companies sold $158 billion of bonds, according to Dealogic.
Barrons: PIMCO’s BOND ETF is now the Largest Actively Managed ETF – As of this week, the PIMCO Total Return ETF (BOND) is now at an all-time high $1.722 billion in AUM , making it the largest active ETF in the U.S., according to Financial Products Research. After adding $200 million in the past week, BOND has now added new assets every single week, since its inception only four months ago.
IFR: High Yield Bond Market Expected to Slow – With an uncertain macro environment heading into the second half of 2012, and less need for companies to refinance, the US high-yield market is not expected to keep up the heavy new-issue pace seen in the first half of the year.
WSJ: Lining Up LIBOR Alternatives - Finding a successor could take years. Libor has been growing in influence as a benchmark interest rate since the 1980s and currently is used to set rates for an estimated $800 trillion of derivatives and borrowings, including loans to consumers, companies and governments. Much like credit ratings, it is deeply embedded in the way financial markets function.
Kraken: Get In On Arch Coal’s Bond Yielding 9% – Investors may be shaky about the coal industry right now, but the bonds are a great investment. The Arch Coal bonds allow investors to grab some great yield while being senior to common shareholders.
Reuters: The Influence of Ratings Agencies is Hard to Dismiss – The lack of objective information sources, as well as falling investment in research, is expected to ensure the agencies play a vital role in global financial markets.
Stockton has no General Obligation debt outstanding, they do have General Fund debt, projects, special leases, etc….($700+ MIL in total)
— Fixedology (@Fixedology) July 3, 2012
Gross:Credit creation lifts financil risk mkts but only so far. Ultimatly wealth creation comes from the real econmy & it’s slowing markedly
— PIMCO (@PIMCO) July 3, 2012
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