Peter Hayes, Head of Municipals for Blackrock Talks Turkey

Best of the Bond Market for March 14th, 2012

Tweet and Video by @blackrock

What Will Drive Muni Market Performance Going Forward?  - Our Take: Great video interview of the Head of Municipals for Blackrock (the largest asset manager in the world) Peter Hayes. Here are the highlights:

  • There are still lots of good opportunities in the Municipal Market to earn income, which is the focus of most investors in the municipal bond market.
  • Municipal Bonds as an asset class remain attractive relative to Treasuries and Other Fixed Income asset classes.
  • Significant tax policy change affecting the muni market won’t occur until 2013 and the outcome of the election is going to be a big factor so need to take a wait and see approach there.
  • Stress to the weaker local municipalities remains problematic and we are going to see lots of negative headlines continue to come from cities like Stockton CA, Detroit MI, and Providence RI
  • While the news is going to focus on the above, bankruptcies in relation to the overall market will remain minimal.
  • They are finding the most value in revenue sectors like transportation in healthcare.  Especially in the A rating range given their wide spreads.
  • Security selection remains the most important element.
Tweet and Post by @ritholtz
Who Hates Treasuries? Everybody! - Our Take:  You have to read down to the bottom to get to it but Barry’s point here is that while everyone is chiming in now about not wanting to be in Treasuries: “The problem is that we have heard it over and over and for nearly a decade.  And, for nearly a decade, this call has been dead wrong.”  There is also a nifty chart in the article which compares Treasury Yields to Consumer Confidence.
Tweet by @jayrosen_nyu  article by @nytimes
Why I am Leaving Goldman Sachs by Greg Smith - Our Take: If you followed the financial news at all today you saw this story.  I don’t understand why this comes as such as shock to everyone.  Michael Lewis wrote Liar’s Poker, which is basically a longer version of Greg’s story on investment banking in 1989.  The The firms are different but the story is the same.
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