Ray Dalio on Bonds…Stagflation on the Horizon?….El Erian’s take on the Fed…and more!December 13th, 2012 by Simon G
Forbes: – Ray Dalio thinks the bond bull market could finally turn in 2013. – Billionaire hedge fund manager and Ray Dalio said Wednesday “The biggest opportunity will be – and it isn’t imminent – shorting bond markets around the world as [the] term structure of interest rates backs up,”.
Aleph Blog: Stagflation on the horizon? - The market is responding differently to loose monetary policy than it used to respond. Time to adjust; the illusions of the Fed are finally failing, I think, and markets may be about to discipline them with stagflation.
Bloomberg: – PIMCO’s Gross says Fed policy means ‘Free’ debt for Treasury. – Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said the Federal Reserve’s latest round of monetary stimulus will enable the Treasury department to issue debt for no cost.
Investor Place: – Fed lights the fuse on the bond market. – The U.S. Federal Reserve switched gears yet again Wednesday, announcing that it will continue to provide stimulus as long as the unemployment rate stays above 6.5%.
CNN Money: – Mohamed A. El-Erian – How risky is the Feds move? – A bold and necessary move? Yes, but the Fed’s growing activism has limits and is ultimately inconsistent with the proper efficient functioning of a market economy.
Learn Bonds: – Gundlach: The Japanese are out of options, buy Japanese stocks and short JPY. – In Gundlach’s view the Japanese government is out of options, and is therefore going to start debasing the Yen in order to stimulate growth. As this happens we should see the Yen weaken and the Japanese stock market rally.
CFA Institute: – Which fixed-income markets are in bubble territory? – In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers whether global fixed-income markets are in bubble territory, and if so, which ones are overvalued.
Scott Grannis: – Corporate bonds are moderately attractive. – Over the past four years, corporate bonds have delivered total returns that rival those of equities. The drivers of this spectacular performance were falling yields and lower-than-expected default rates. So is this the end of the greatest corporate bond rally in history?
Barron’s: – Bonds will become wealth destroyers – Just not yet. – Count Barclays among the many market observers who think bonds are due for a fall in the long run, but that investors can still make some more money on bonds in 2013.
Herald Online: – The Corporate Bond Market is Undergoing Radical Transformation, Says TABB Research. – The corporate bond market is changing and in far more wholesale a fashion than a mere e-trading trend, says TABB Group in new research. At the very core, banks are re-evaluating their role in a market they’ve dominated, dictated and designed for over 50 years. But today, returns are lower, costs and risks are higher. They are looking at how to realize efficiencies, adopt new business models or exit the industry entirely.
CNBC: – How the Fed is pushing investors to buy junk bonds. – With no end in sight for the Federal Reserve’s fixation on low interest rates, a likely scramble for yield has intensified worries about dangers ahead for junk-bond investors.
Artemis: – 2012 see’s catastrophe bond market return to growth. – The catastrophe bond market returned to growth on 2012 growing by $2.5 billion, helped by strong issuance resulting in 25 new transactions coming to market. Many of these new deals upsized thanks to the attractive market conditions which were excellent for execution and the increasing interest from capital markets investors.
Money & Markets: – Some smart managers are eschewing bonds altogether. – Investors have relentlessly bid up the price of bonds for 30 years so they’ve reached the point where they’re priced to return less than nothing for the next decade. And still the money rushes in, $28 billion more last month. Clearly, most folks are betting that this tree will reach the sky. But the smart money knows that its not.
CorvetteKid: – 5 conservative bond CEFs for the long run. – Here’s a look at five CEFs that are very appropriate for retirees or conservative investors and are providing nice yields in today’s ultra-low rate environment.
Bondsquawk: – Peabody energy high yield bonds poised to rebound. – details of a High Yield bond issued by coal industry leader, Peabody Energy Corp. This bond offers an investor the opportunity to capture yields along with the potential for price appreciation.
Kiplinger: – The 5 best bond funds for 2013. – Thanks to a 30-year bull market, the environment for investing in bonds today is singularly unattractive. The easy money has been made. To make money in bonds now, you have to choose among several risky options. So here’s a look at 5 bond funds that should provide a decent return in 2013 without being too exposed to rising interest rates.
Barron’s: – Citi on corporate bonds: Bullish for now, until we’re not. – Citi strategists today echo the beleaguered refrain being heard across fixed income markets that bonds are without a doubt a losing bet in the long term, but they could still post another year of gains, so why sell now?
Gross: Beat the wealth tax Tip #2: 5-10 year TIPS in US and UK. Central Bank inflation targets moving up.
— PIMCO (@PIMCO) December 13, 2012
@matt_fabian Definitely worth noting! Muni resilience to default has been impressive and not a surprise.
— AnthonyValeri (@Anthony_Valeri) December 13, 2012
@jonathanprober hearing a few concerns now. QE squeezing out toothpaste and tightening policies trying to put it back in tube. Very messy
— Taylor Riggs (@TaylorRiggs_BB) December 13, 2012