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Bloomberg: – Pimco’s Gross says Fed will tighten policy in 2016 at earliest. – Pacific Investment Management Co.’s Bill Gross said he expects the Federal Reserve won’t tighten monetary policy until 2016 at the earliest.
Anthony Valeri: – Municipal bond defaults continue to decline. – The number of muni bond defaults continues to decline with defaults through until June 2013 running at half the pace of 2012.
WSJ: – Bond investors turn to cash. – Investors are cashing out of bonds but remain hesitant to plunge into stocks, preferring instead to buy money-market mutual funds despite their low returns. The surprise move highlights persistent investor anxiety with equities even as stock indexes reach new highs.
Learn Bonds: – How to find opportunities in the municipal bond market. – Municipal bonds are interesting right now after the ‘taper tantrum’ that started at the beginning of May when the Federal Reserve telegraphed its intent to taper off their bond buying program known as quantitative easing. So how do you go about finding the right opportunities in the muni market.
Fortune: – You don’t know as much about bonds as you think you do. – Don’t feel bad if you weren’t aware of the recent plummet in long-term bond prices. Most everyone else missed it too.
Forbes: – What to do with your bond portfolio now. – Many investors were burned so badly in 2008 that they became willing to do just about anything to escape the risk of equities. As a result they threw more than a trillion dollars at bonds and bond funds since that time. If you’re one of those investors, you’ve done well with your bond portfolio. Congratulations, but it sure looks like that party is over.
Reuters: – History offers few happy endings for Detroit to follow. – Detroit officials hope the bruising bankruptcy battle ahead of them will be rewarded with the birth of a leaner, more efficient and ultimately prosperous Motown.
Indexuniverse: – Kotok to Whitney: What planet are you on? – As far Cumberland’s Chief Investment Officer David Kotok is concerned, all the histrionics about more muni meltdowns in the wake of Detroit’s bankruptcy from the likes of Meredith Whitney are working in his favor.
FT: – Details of Detroit’s troubles come to light. – Detroit’s dire financial problems – which culminated in last week’s bankruptcy filing – were made worse when the ailing Motor City tried to fix shortfalls in its pension funds with more and more complex financing deals.
ETF Trends: – Short-duration high-yield bond ETFs in ‘sweet spot’. – Junk debt ETFs tracking bonds with shorter durations are finding a home in more portfolios as investors continue to scratch for yield but fret over the damaging impact of higher interest rates.
CityAM: – Goldman Sachs says that 10 year bonds are now less appealing than cash. – In a new note, Goldman Sachs investment research team suggests that trackers are weighting 10 year government bonds too highly, and should now prefer cash.
Wall St Daily: – Three more reasons to be wary of muni bonds. – Detroit’s bankruptcy is only the beginning. There are three more stiff headwinds facing the municipal bond market.
Investors Chronicle: – How ETFs navigate choppy bond markets. – Advisers and market experts have grown increasingly concerned about the ability of large bond funds to meet redemptions in recent months, and now concerns have been growing about exchange traded funds (ETFs) which invest in bonds.
Sun Sentinel: – Taxing municipal bonds won’t work. – The debate surrounding taxes and their value is never ending. This year we will celebrate the 240th anniversary of the Boston Tea Party, a revolt by citizens over unfair taxes. Some things never change.
Barron’s: – Fears of muni spillover from Detroit ‘greatly exaggerated’ – Citi. – Citi municipal strategists George Friedlander, Mikhail Foux and Vikram Rai say fears about broader muni-market spillover effects from Detroit’s bankruptcy filing “are greatly exaggerated” and say munis look like they might finally be poised to rally soon.
Bloomberg: – North Las Vegas yields surge on budget utility grab. – North Las Vegas, once among the nation’s fastest-growing cities, papered over collapsing property taxes by subsidizing its general fund with revenue from higher utility rates — a practice Nevada is working to stop.
FT: – Bonds to benefit from ageing population. – There is a storm looming on the horizon for fixed income investors, as the Federal Reserve plans this year and next to reduce its $85bn a month bond buying scheme. Some fear it spells the end of a 30-year bull run in bonds. But many with a longer-term view argue that there is one key supporting factor.
Fort Mills Times: – Secured bonds dominate high yield default mix. – Secured bonds were the most prevalent in the batch of first-half 2013 defaults, according to Fitch Ratings. A majority (14) of the 19 defaulted issuers carried secured bonds with six of those issuers selling the bonds as recently as 2011 and 2012.
low turnout for 7yr Treasury auction but those who participated bid aggressively. Auction results providing only minor support today.
— AnthonyValeri (@Anthony_Valeri) July 25, 2013