Investors Dump Munis…Junk Starting to Look Attractive…Back to the Old Normal For Bonds…and more!

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WSJ: – Investors yank money from municipal-bond funds. – Investors yanked $13.5 billion from mutual funds that invest in municipal bonds in June, according to Lipper FMI, a retreat that is making it harder for several cities, states and towns to raise money.

ETF Trends: – Bank loan or junk bond ETFs for yield? – Investors dumped speculative grade debt-related exchange traded funds and turned to senior loan and floating rate notes as interest rates inched higher in the last few months. However, the sell-off may be overdone and now junk bonds show attractive valuations, according to BlackRock.

Reuters: – Old normal for bonds rather than fragile new world. – The global bond market shock of recent weeks may be closer to an ‘old normal’ than some new world of fragile, over-regulated markets posited by many banks and brokers to explain the rout.

Learn Bonds: – An opportunity to capture high yields from this copper company. – Financial Lexicon takes a closer look at Southern Copper Corporation bonds.

Minyanville: – Junk bonds, preferred stocks, REITs: Why investors should consider high-yield ETFs. – The last three months of soaring interest rates have thrown many high yield investors for a loop and left them wondering whether to buy, sell, or hold their favorite dividend powerhouses.  By analyzing each of these asset classes we can determine which are healthy and which may need more time to stabilize.

StreetAuthority: – The safest way to earn high yields from emerging markets. – For a while there, global investors were dumping emerging-market bonds just as fast as they were selling emerging-market stocks. Then a light bulb went off: Investors realized that bonds are a lot safer in a slowing economy — for a pair of reasons.

Advisor.ca: – Don’t sell corporate bonds. – Bond investors shouldn’t be making major portfolio adjustments right now.

ETF Trends: – Rising rates and low inflation a toxic mix for TIPS ETFs. – Investors who bought TIPS ETFs for inflation protection have received a harsh lesson on how they can lose money when Treasury yields rise.

WSJ: – There are deals in the battered bond market. – Bonds are starting to look better after the sharp market decline of the past two months.

Bloomberg:  – Oracle sells $3 billion of fixed, floating bonds in three parts. – Oracle Corp. (ORCL) issued $3 billion of fixed- and floating-rate securities in its first dollar-denominated offering this year.

Fox Business: – Uncle Sam trying to tax your muni bonds? – Kaltbaum Capital Management Gary Kaltbaum on the potential tax impacts on the municipal bond market.

BusinessWeek: – REITs slump 19% fueling worst bond losses since ’94. – Annaly Capital Management Inc. (NLY)’s Wellington Denahan, head of the largest mortgage real-estate investment trust, told investors less than three months ago that reports REITs could threaten U.S. financial stability were as misleading as the media frenzy over shark attacks in 2001.

Trading Floor: – Should you get out of bonds? – More money came out of bond mutual funds than went in in the second quarter. That hasn’t happened since 2008. So if everyone else appears to be heading for the fixed income exit, shouldn’t you be fighting to get out too?

Bloomberg: – Kentucky’s La Grange cut to junk on risk of default. – La Grange, a small Kentucky city that backed debt used to buy land for commercial development that mostly never occurred, had its credit rating cut five steps to junk by Moody’s Investors Service, citing a risk of default.

ETF Trends: – iShares rolls out more defined-maturity bond ETFs for rate risks. – BlackRock’s ETF unit iShares on Wednesday launched more bond funds with defined maturities designed to address investor fears over rising interest rates.

FT: – Sci-fi world of central bank action. – Risk/return expectations turned on head by artificially low interest rates.

Market Oracle: – Meredith Whitney on muni bonds and red state-blue state migration. – In 2010 Meredith Whitney made an earth shattering statement during a CBS’s “60 Minutes” interview that rocked the municipal bond investment world. The muni bond market fell far short of Whitney’s prediction. But many today feel she was merely ahead of her time?


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