NPR.org: – Stockton bankruptcy Judge defers decision on pensions. – US Bankruptcy Judge Christopher Klein agreed yesterday that the city is, in fact, broke. But he didn’t decide the question of whether the city must renegotiate its pension obligations, as some of its creditors had hoped.
Reuters: – DoubleLine’s Gundlach says “lost decade” in stocks unlikely. – Jeffrey Gundlach, chief investment officer and chief executive of DoubleLine Capital LP, said Monday that another “lost decade” in stocks is unlikely and that lower yields on 10-year Treasury notes have made them less attractive.
Indexuniverse: – Bill Bernstein Make peace with T-bills. – But Bernstein, whose recent book “The Ages of the Investor” addresses the challenges of getting the final phase of an investment life right, is adamant that looking to longer-dated debt or taking on bigger risks in places like the junk market is really an accident waiting to happen for people who want nothing more than to quietly clip coupons.
Learn Bonds: – Q1 bond market review – The “Great Rotation” that never was. – During the first quarter of 2013, talk of a “Great Rotation” out of bonds and into stocks reached fever pitch. Reading that nonsense on nearly a daily basis left me feeling as if it was simply the latest attempt by an equity-enamored financial media to scare everyday investors out of bonds and into the stock market. Did it work? Let’s take a look.
Cate Long: – Time for Stockton to wrestle with CalPERS. – Stockton will not return to fiscal solvency unless it reduces its current and future pension liability. The bankruptcy law clearly allows them to reduce it and its financial statements cry out for it. If Stockton is to recover and be made secure again it must wrestle CalPERS now.
About.com: – The best bond ETFs of the first quarter. – Here are the top ten bond ETFs for the first quarter of 2013, leaving out those whose performance was affected by pricing anomalies brought about by low trading volumes. Five of the funds are inverse bond funds, or those that bet against the bond market; or in this case, U.S. Treasuries specifically. High yield bond funds are also heavily represented on the list, reflecting the strong outperformance of the asset class in the first three months of the year.
About.com: – The worst bond ETFs of the first quarter. – Here are the ten worst-performing bond ETFs during the first three months of 2013. The composition of the list reveals some key trends of the first quarter: emerging market bonds underperformed, as did international bond funds that were exposed to the downturn in foreign currencies. Also lagging were funds with the highest interest rate sensitivity, including several leveraged ETFs tied to US Treasuries.
Investment News: – Gundlach sticks to his guns despite big drop in rival’s Japan fund. – Jeffrey Gundlach is standing by his call to go long Japanese stocks and short the yen. But he concedes that, over the short-term, the strategy could be painful.
Reuters: – Fed may be able to pull back on stimulus this year-Lockhart. – The Federal Reserve may be able to reduce its bond-buying stimulus plan before the end of this year if economic growth continues to pick up and employment improves further, a top central bank official said.
Reuters: Fed’s Lockhart not worried about asset bubbles. – Atlanta Federal Reserve Bank President Dennis Lockhart on Tuesday downplayed the risk that the U.S. central bank’s stimulus policies are contributing to financial instability.
ETF Trends: – Heavy selling in muni bonds as ETF trades at discount. – Investors pulled more than $500 million from municipal bond funds in March and the largest ETF tracking the fixed-income sector is selling at a discount to net asset value, suggesting the asset class is out of favor with investors.
Bond Buyer: – Obama’s infrastructure plan not seen gaining traction. – Municipal market participants do not think President Obama’s $21 billion multi-pronged infrastructure proposals will gain traction from the issuer community or lawmakers on Capitol Hill.
Indexuniverse: – Inverse Treasury ETF huls in assets. – The ProShares UltraShort 20+ Year Treasury ETF (NYSEArca: TBT), a double-exposure inverse play on long-dated U.S. Treasuries, was one of the most popular funds last Thursday, seeing assets jump nearly 6 percent on the same day both the S&P 500 and the Dow Jones industrial average rallied to record highs.
New Found Research: – Bond bubbles and credit quality. – If bond prices were debatably inflated in 2010 because of abnormally low yields, there should be little disagreement that the situation has only gotten worse. Unfortunately, for the many articles that cite our current debt debacle, very few give guidance regarding how to face this impending devaluation of an asset class whose usual mandate is to reduce a portfolio’s risk.
Ploutos: – Managing your fixed income portfolio. – A new series of articles from Ploutos which demonstrates the long-term success of a number of different trading strategies, and gives investors with differing risk tolerances tips on how to employ these strategies themselves to improve the performance of their respective fixed income portfolios.
Bloomberg: – Illinois finishes first bond sale as worst-rated state. – Illinois sold $800 million in general-obligation bonds, its first offering since becoming Standard & Poor’s lowest-rated U.S. state amid a growing pension-funding gap.
Reuters: Fitch upgrades Michigan’s rating as economy improves. – An improving economy won Michigan a credit rating upgrade to AA from AA-minus from Fitch Ratings on Tuesday.
— Cate Long (@cate_long) April 2, 2013
— Brian Chappatta (@BChappatta) April 2, 2013