An Unmitigated Disaster in Closed End Funds…SEC Still Not Happy with Raters…and more!November 15th, 2012 by Simon G
TF Market Advisors: An Unmitigated Disaster in Closed End Funds - Here is the craziest closed end fund I know of. The PHK fund was down 26% since its peak but still trades at a premium of 27%.
WSJ: SEC says rating agencies still plagued with problems - U.S. securities regulators said in a report Thursday that the credit-ratings industry remains plagued by failures in meeting its own standards, weak oversight and poor documentation of its rating decisions, despite years of heightened scrutiny after the financial crisis.
FT: – PIMCO’s El-Erian says expect more from the Fed – and soon. – The minutes of the Fed’s October interest rate meeting reveal considerable confusion as to what exactly the Fed should do next. With interest rates at zero and forward interest rate guidance already extended to mid-2015, policy is faced with a shrinking set of options.
Bond Squawk: – Stocks further to fall if bond yields have their say. – After the last week of stocks taking a beating, it is safe to say that risk is back off. The S&P 500 has declined by 67 points or 4.7% once the market moved past the Presidential election and was able to place all of its focus on the impending Fiscal Cliff.
Jeffrey Rosen: – Corporate bonds: A bubble in the making or business as usual? – Over the past several months, corporate bond yields across the investment spectrum have fallen precipitously. The concern is that the drop in yields, especially when they fall below comparable Treasuries, is a sign of a bubble ballooning in corporate bonds. But is it really a bubble?
ETFDB: The ultimate guide to the LQD corporate bond ETF - If for nothing else, LQD is unique in its size – forget being the largest corporate bond ETF on the market, it’s the largest bond ETF period.
Market News: – BlackRock says munis much more appealing after election. – The outcome of the U.S. election has made the case of municipal bonds “much stronger,” Peter Hayes, the head of BlackRock Municipal Bonds Group, said on Wednesday.
MarketWatch: – 10 ways to protect your retirement savings from the fiscal cliff. – With the possibility of the fiscal cliff and the resulting tax increases on dividends and possibly muni bonds that will follow, retirees and potential retirees need to look at ways to protect their income if the worst happens.
Bespoke Investment Group: – Municipal bonds see sharp reversal. – Investors yanked a record volume of cash from BlackRock Inc. (BLK)’s exchange-traded fund that buys junk bonds as the notes lose value for the first month since May.
Learn Bonds: – How the size and composition of the bond market has changed since 1980. – Learn Bonds own Marc Prosser looks at how the composition of the bond market has changed since the decade of Ferris Bueller and Bud Fox.
ETF Trends: – Yield chasers starting to flee junk bond ETFs. – Investors stretching for yield have flocked to junk bond ETFs this year but now the flows are starting to reverse as the funds drop below their 50-day moving average for the first time since June on worries over the economy and US fiscal cliff.
Fox Business: – Companies flood bond market with $15 billion worth of debt. – Despite a weak backdrop in which major US equity indexes lost more than 1%, the corporate-bond market remained healthy and absorbed $14.975 billion of new deals from 10 issuers.
Barron’s: – Junk bonds caught in a sell off as issuers start to cancel offerings. – The high yield market has declined 2.7% since the election, according to Bank of America Merrill Lynch, and that downturn is likely to continue.
MarketWatch: – Investment grade company bonds gaining from junk exodus. – As Treasury bonds waffle in a slightly lower yield range since the election, investors continue to make the shift out of riskier asset classes but aren’t quite ready to sacrifice yield and head for investment grade corporate bonds instead of Treasuries.
ETF Trends: – Muni bond ETFs hit on tax worries. – The largest exchange traded fund that invests in municipal bonds fell sharply Wednesday as President Obama held the first press conference of his second term and stood by pledges to raise taxes for wealthy Americans.
Oppenheimer Funds: – The effects of hurricane Sandy on the muni market. – Hurricane Sandy has not prompted a deluge of questions about its effect on the municipal bond market, possibly because the answer is “so far, not much.” The storm certainly caused grievous human suffering and an unprecedented amount of damage to power systems, subways and telecommunications systems. Nonetheless, investor demand for municipal bonds has remained strong since our market re‐opened after the storm.
— PIMCO (@PIMCO) November 15, 2012
Luv Fed Fisher’s comments on lawmakers. He calls them “parasitic wastrels”Says Congress has behaved disgracefully on fiscal matters. Agree
— Mike Jackson (@bondscoop) November 15, 2012
Fixed Income CEF’s.If I sold you a $10 bill for $12 dollars don’t expect me to bid better than $10. Value hasn’t changed, you paid too much
— TF Market Advisors (@TFMkts) November 15, 2012
Ten-year #muni yields continue their plunge to record lows, declining every day since the election, Bloomberg data show.
— Brian Chappatta (@BChappatta) November 15, 2012