Bloomberg: – Bond investors have made a killing off of Hugo Chavez’s repressive regime. – Since taking office in 1999, Hugo Chavez has spread his socialist revolution in Venezuela by seizing more than 1,000 companies. For bondholders that stuck by him, he’s also delivered returns that are double the emerging- market average.
Barron’s: – Emerging market corporate debt shows strong link to sovereigns, new study says. – Think all emerging-market corporate bonds are the same? Think again, a new study says.
Opposing Views: – Taxation of corporate bond interest. – The interest on corporate bonds is taxed at your marginal tax rate, but the tax code is never that simple. So here’s the complete guide to corporate bond taxation.
Learn Bonds: – Where are the opportunities in high yield investing? An interview with Paul Matlack, CFA. – Paul Matlack is a portfolio manager for Delaware High-Yield Opportunities Fund, one the strongest-performing high yield mutual funds over the last 10 years. We wanted to get his thoughts on where he saw opportunities in the high yield market.
Forbes: – Interest rates, equities and bonds: Getting ahead of the curve. – George Soros developed a concept he calls reflexivity. The idea is that financial markets do not operate fully independent of the actions and biases of the participants. Taken to an extreme it can create a sequence of boom and bust. One can see this sequence having played out in the markets of both 1999 and 2007. I wonder today if we are not seeing that sequence beginning to now unwind in the bond market.
MarketWatch: – When mREITs yield more than CCC bonds. – Anyone considering investing in a mortgage REIT needs to examine carefully their leverage ratios, as well as what type of MBS they buy. And if a lower dividend yield is the price to pay for safety, maybe that is the way to go. Or, at least consider the only pure mortgage REIT ETF that diversifies many managerial issues that may arise with single mortgage REITs.
FT: – Flee ‘safe’ sovereign debt, says Hasenstab. – The man who made some of the boldest contrarian bets in the bond market last year has a new message for investors: get out of supposedly safe government debt now, before it is too late.
LPL Research: – The Fed’s bond diet. – Adding more bonds in the coming months will add interest rate risk and increase the potential for loss in a rising rate environment.
ETF Trends: – Three bond ETF strategies for 2013. – Over the past couple of months, Russ Koesterich has been outlining his outlook for markets and economies in the coming year. In short, he believes the most likely scenario is that the world – in particular the US – will continue to see slow but stable growth in 2013, with developed markets increasingly being influenced by policy decisions.
FT Adviser: – Investec managers add voices to fixed income fears. – Investec Asset Management’s John Stopford and Philip Saunders have raised concerns about fixed income including the spectre of a bear market in the asset class.
Quartz: – Expect to hear a lot of scary bond bubble talk, starting … now. – Given how wrong bond-bubble Cassandras have been for the last half decade, you may be tempted to write them off once the chatter about the imminent destruction of the bond market starts to pick up. (We’re predicting you’ll be hearing quite a bit of it as rates keep rising.) But we also think that might be a mistake.
WSJ: – Illinois delays municipal-bond sale. – Illinois has postponed a $500 million municipal-bond sale that was scheduled for Wednesday, attributing the delay to Standard & Poor’s recent downgrade and a decision by Fitch Ratings to put the state on negative watch.
Bloomberg: – Illinois delays $500 million bond offer after S&P rating cut. – Illinois postponed a $500 million offer of general-obligation bonds planned for today, citing unfavorable market conditions after Standard & Poor’s cut its credit rating last week and threatened to drop the grade again.
CNN Money: – Goldman Sachs braces for bond market blow up. – Goldman Sachs is growing more nervous about the bond bubble. In the past year, the investment bank has dramatically cut the amount of money it could lose on any given day if interest rates were to rise, which would cause bond prices to fall. The bank has also upped its own borrowing in order to lock in low interest rates.
ETF Trends: – High-yield bond ETF pullback a warning signal for equity bulls? – The largest ETF tracking high-yield corporate bonds was down Wednesday for the fourth straight session from a multiyear high, unnerving bullish stock investors and those who have piled into junk debt funds recently.
Barron’s: – Fed-watching focuses on longevity of QE, exit plans. – How much longer the Fed keeps up its current rate of purchases of Treasury and MBS securities now has important implications for its remittances to the Treasury. To the extent that this becomes an important consideration, it could begin to impinge on the Fed’s flexibility to raise rates and run down its balance sheet when time to exit comes.
WSJ: – The Fed continued buying bonds even as policy makers offered a mixed review of the economy. – In a Fed statement following their January meeting the committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month, despite the economy giving off mixed signals.
Gross: Cookie cutter Fed statement. Investors should avoid long term bonds, be wary of inflation & neg. consequences of current policies.
— PIMCO (@PIMCO) January 30, 2013
Gross: Negative GDP a fluke but last 12 months growth number only 1.5%. New Normal continues, profit growth standing still.
— PIMCO (@PIMCO) January 30, 2013
the School of Maximum Market pain suggests we are not going down much further in Treas, WAY too many have bought puts and are set up for it
— Colin Cody(@ColinACody) January 30, 2013
PImco’s Bill Gross says quantitative easing will slow down in early to mid 2014 – CNBC
— Chris Adams (@chrisadamsmkts) January 30, 2013