Best of the Bond Market for April 30th, 2012
Bloomberg: Investors Can’t Get Enough of the Long Bond Muni Credit - “Investors are pouring the most money in almost two months into the longest-maturity U.S. municipal bonds…adding $329 million to long-term muni mutual funds in the week ended April 25, the most since the start of March, Lipper US Fund Flows data show. The $3.7 trillion municipal market’s 3.2 percent gain since Dec. 31 is its best start in three years.”
Bond Buyer: Muni’s Remain Flat on Quiet Day – “The two-year yield closed flat at 0.31% for the eighth consecutive trading session while the 30-year ended flat at 3.25% for the fifth consecutive trading session. The 10-year yield finished at 1.87% for the third consecutive session”.
Barrons: How Europe is Unfixing its Problems (h/t @BobBrinker) - “The strategy of lending even more money to countries that have exhausted market sources of credit — and saddling them with severe fiscal austerity programs to boot — is not working by all accounts.”
—-> @PIMCO Tweets: Gross: Spain beats! -.3% GDP vs. -.4% forecast. The wonders of fiscal austerity! (NOT).
Seeking Alpha: Top 10 Municipal Bond ETFs – Great list with lots of charts and data included.
Nouriel Roubini @Nouriel Tweets: We at RGE expect the Fed to announce sterilized QE in June when Operation Twist ends.
PhillyBurbs.com: Avoiding Bad Bond Investment Advice (h/t @keeley_webster)- If you don’t know anything about the bond market best to avoid advice from well meaning but uniformed friends. Come learn about the market here at LearnBonds or get advice from a professional that understands your unique situation.
Boston Globe: Blackstone feeds ETF frenzy expanding to loans - “Blackstone Group LP is partnering with State Street Corp. to create an ETF for speculative-grade loans a type of floating-rate debt that ranks senior to bonds and which funded the leveraged buyouts of companies from power producer Energy Future Holdings Corp. to newspaper publisher Tribune Co.”
Investment News: A talent shortage looms as the Investment Advisory Business Booms – Advisors retiring in droves at the same time demand from baby boomers is increasing. “The total number of advisers fell to 320,378 in 2010, from 334,919 in 2004 — a 4.3% decline, according to Cerulli.”
WSJ: Appetite is Back for AIG Bonds - “Some of the biggest banks are teaming up to jockey for the securities, which may be sold in coming days by the Federal Reserve Bank of New York. At stake are some $7.5 billion in face value of bundles of bonds known as collateralized-debt obligations, or CDOs”.
BondSquawk: Enhance Bond Returns by Rolling Down the Yield Curve - “this is a preferred strategy when the yield curve is upward sloping or steep as in the case of today’s market environment. In particular, an investor will purchase a bond at the top of the steepest part of the yield curve and hold that bond long enough until it reaches a lower yielding part of the curve. In this process and assuming that there is enough duration, the bond that you purchased, coupled with collecting the coupon, will see its price appreciate as it ages with the maturity shortening. After this gain, the bond is sold and the proceeds can be redeployed.”
Bloomberg: Father of Treasury Floaters Says Now Worst Time for Sales – Priya Misra from Bank of America is quoted in the article giving the argument for Floating rate Treasuries:
“The Treasury can, with floaters, lock in debt at a short- term rate without having to come back in the market as often as they have to do for bills,” Rising rates “are a risk to the Treasury relative to them issuing long-term coupon bonds, but not relative to them issuing Treasury bills,” she said.
James Bianco from Bianco Research Sums up the argument against floaters:
“I don’t get why the Treasury thinks floaters are a good idea with short-term rates at zero percent, as they only have one way to go, and that’s up,”
Reuters MuniLand: The non-profit tax shell game – “Ryan Delaney of WRVO, a public-radio station in upstate New York, reports that Syracuse has an astonishing 56 percent of city properties exempted from property taxes. Delaney drills down into a current fight over tax exemption for a proposed development project. The fight shows how property-tax exemptions are growing and can be just a mask for private development and profit.”
MSRB: MSRB Holds Quarterly Meeting - “…the Board continued its review of the expanded use by retail investors of online trading platforms and whether enhanced protections and disclosures are needed for investors who use these platforms….the Board decided to reexamine the 15-minute time period in which most trades must be reported to the MSRB…..the Board discussed eliminating the practice of delaying dissemination to the marketplace of the size of trades that exceed $1 million, which currently are displayed as “1MM+” for the first five days after the trade.”
—->@Cate_Long Tweets: Part of overall transparency plan
NY Post: NY ranked last in economic outlook study due to ‘excessive’ tax, spending policies (h/t @alebenthal) – “We hate to keep picking on California, New Jersey and New York, but they continue to be models of how not to govern a state,” the report warned. “These three states,” the report continued, “impose tax rates at or near the highest in the nation and about twice the national average.”