Muni Yields Fall to Record Lows as PIMCO Piles inNovember 9th, 2012 by Simon G
Reuters: – Muni yields fall to record lows for 10-, 30-yr bonds. – Yields on top-rated municipal bonds due in 10 and 30 years fell on Thursday to record lows on Municipal Market Data’s benchmark scale.
BusinessWeek: Bill Gross is doubling down on munis - Bill Gross, whose $281 billion Total Return Fund already holds the most municipal debt in six years, says now is the time to buy more with higher taxes looming following President Barack Obama’s re-election.
CNBC: Why the yield curve is unlikely to invert ahead of next recession – The mechanism has probably broken down now. The reason the yield curve worked was because of a complex set of interactions between traders and the Federal Reserve.
Reuters: – Puerto Rico’s new governor a big question mark for bonds. – Puerto Rico is worrying America’s $3.7 trillion municipal bond market by voting in a new, unfamiliar governor and ousting a pro-business reformer whose painful economic initiatives seemed to be starting to bear fruit.
Barron’s: Investor protections for the lowest rated corporate bonds getting continue to worsen - New corporate bonds are increasingly junk-rated, junk bonds are continuing to get junkier, and the junkiest among them continue to offer increasingly bad protections known as covenants for the investors who buy them.
aiCIO: 2012 junk bond issuance has already broken all time record - Some $341.6 billion has been issued in global high yield debt so far this year, according to data monitor Thomson Reuters. This has already broken the previous annual record set in 2010, when high yield issuers raised $322.9 billion.
FT: – Corporate bond trading to see deep change. – Regulation is forcing deep structural change for trading corporate bonds and new independent “exchange-like” platforms will emerge.
Barron’s: – Why bond fund managers can beat ETFs. – You’ve read that exchange-traded funds are a small but rapidly growing force in the bond markets. Should you invest in an index-tracking ETF or a mutual fund run by a human manager?
Reuters: – Puerto Rico’s slow pension reforms risk downgrades. – Standard & Poor’s Ratings Service on Friday said “prolonged inaction” on reforms of Puerto Rico’s ailing government workers pension system by the islands governor-elect could lead to a one-notch downgrade of Puerto Rico credit ratings.
Bond Buyer: – Election gives munis a record-smashing lift. – Results from the U.S. elections on Wednesday provided a record-breaking boost to a municipal market still recovering from last week’s hurricane.
Learn Bonds: – Are municipalities gambling with taxpayer money or being smart? – Should municipalities be entering into interest rate swap agreements? This is the key question. Just because the municipalities lost money on the interest rate swap does not mean it’s a bad idea. There are two valid reasons that I can see for a municipality entering a interest rate swap.
InvestmetNews: – Muni bonds could be in big trouble. – Limit on tax deduction might send investors rushing to the exits; ‘lot of vectors’ would spoil appeal.
Cate Long: – Time to ride the muniland tax exemption pony. – At the Bloomberg Link conference on Thursday, Matt Posner, of Municipal Market Advisors, said that discussion of the municipal bond tax exemption would likely be rolled over to the next session of congress, which begins January 3. Yes, the long awaited muniland battle is upon us. Strap on your armor.
FMS Bonds: – Professionals flock to munis. – As of June 30, banks across the country increased their municipal bond holdings to $330 billion. That’s a $20 billion increase over the previous 12 months and the biggest jump in 27 years..
FOX business: – Best places for your money in fixed-income. – Janney chief fixed income strategist Guy Lebas weighs in on the state of the fixed-income market.
— MayraRodriguezVallad (@MRVAssociates) November 9, 2012
— Cate Long (@cate_long) November 9, 2012
Gross: OBAMA/BOEHNER tug of war reveals nothing new but O holds better cards. Tax rates on high income and capital going up. Risk asset neg.
— PIMCO (@PIMCO) November 9, 2012
muni bond funds reporting weekly saw $866mn inflows. long-term saw $544mn inflows, Intermediate saw $217mn inflows, HY saw $180mn of inflows
— Taylor Riggs (@TaylorRiggs_BB) November 9, 2012