Who Owns the US Treasury Market?…PIMCO’s Tiny Equity Business…Looking Back on Jan…and More!February 1st, 2013 by Simon G
Barry Ritholtz: – Who owns the US Treasury market? – The 10-year Treasury bond yield traded at 2.03 percent today a level not seen since April 2012. We thought it’s a good time to revisit who are the major holders of US Treasury securities.
BusinessWeek: – Can PIMCO break free of its bonds? – PIMCO’s fortunes are decidedly and lopsidedly tethered to fixed income, which represents more than 99 percent of its gross domestic product-like $2 trillion in assets. Its $10 billion equity business, by comparison, is still looking to make a name for itself.
Capital Spectator: – Asset class January performance review. – Risky assets generally started the New Year on a strong note, led by handsome gains for equities in the US and the developed world. It wasn’t all good news though: government bonds in developed markets suffered badly.
Learn Bonds: – Investing in municipal bonds book review and investing checklist. – The primary reason why we started Learn Bonds was because there was so little information out there for the individual bond investor. Nowhere was this more true than the municipal bond market. Don’t get me wrong, there are some good books out there on the municipal bond market, but they are written with the municipal bond market professional in mind, and not the individual investor. But Phillip Fischer’s book changes all that.
Reuters: – Investors prone to herding in corporate bonds -Fed paper. – Institutional investors are more prone to “herd-like” behavior in the U.S. corporate bond market than in stocks, according to researchers at the Federal Reserve.
Governing: – The Muni Bond Market in 2013. – Issuers may be enjoying low-interest rates when they come to market, but that doesn’t mean these are the best of times.
MarketWatch: – Municipal bond safety questioned. – The recent downgrade of Chicago by Moody’s highlights the pressure that local municipalities are under right now. While the default risk is still much lower (for even Illinois), the current environment contains significant downside pricing risks. My message is simple, diversify, diversify, diversify.
TulsaWorld: – Municipal bonds remain a solid investment. – Municipal bonds have been receiving a lot of press lately. What with tax exemption and a number of municipal defaults. This has led some to question the sanity of investing in them. So do municipal bonds remain a solid investment in 2013?
FT: – Low rates spark corporate bond bonanza. – It’s been a dramatic start to the year for global corporate bond markets. Companies borrowed more money than in any other January on record. Bullish sentiment has encouraged investors to lend despite slender returns. But the strength on the issuer side is driven not only by the low cost of debt, but by fear that it may never be this good again.
MarketWatch: – 5 steps to cushion a bond-market selloff. – Headlines of expected slowing corporate earnings, increased market volatility and a general distrust of Wall Street are keeping many investors out of stocks. In spite of low interest rates, and a general awareness that bonds are in “bubble” territory, many investors continue to buy bonds for their perceived safety.
On Wall Street: – Finding a middle ground in the fixed-income markets. – Very few investors know just how much more risk they must take today to generate increased fixed income. Can you handle the truth about bonds?
Financial Ramblings: – Current series I savings bond rates. When deciding whether to buy now or wait to see if rates improve, there are a couple of things to consider. For starters, there is an annual purchase limit of $10k, so be sure not to miss out on your annual allotment by being too greedy. You also need to weigh the likelihood of a better fixed rate vs. what you can get for buying now.
Moody’s: – A record $311 billion of public finance debt downgraded in 2012. – Moody’s Investors Service downgraded a record $311 billion in public finance debt in 2012, upgrading only $24 billion during the year. Moody’s downgraded the ratings on 5.9% of the approximately 14,000 public finance debt issuers it rates during the year, and upgraded the ratings on 1.3% of them.
Benzinga: – A new twist on corporate bond ETFs. – When it comes to investment-grade corporate bond ETFs, one fund dominated the arena for years. However, as investors have sought higher yields beyond the confines of US borders, some ETF issuers have obliged with new funds offering access to international investment-grade corporates. The latest entrant to that competition is the WisdomTree Global Corporate Bond Fund (NASDAQ: GLCB), which debuted Thursday.
John M. Mason: – Corporate bond markets move in advance of further interest rate increases. – In the United States, for example, deal volume in January 2013 was 71 per cent higher than it was in 2012. For the eurozone, deal volume was up 17 percent. This seems, to some, to be the culmination of the massive issuance activity in global bond markets during the last four months of 2012. So what’s behind the increase in volume?
Fox Business: – UBS set to classify bond-buying clients as ‘aggressive’ investors. – UBS is planning a mass mailing to many of its brokerage clients alerting them that they have been reclassified as “aggressive” investors following a recent change in its market outlook that some people inside the firm say reflects growing bearishness in the bond market, particularly over the long term, the FOX Business Network has learned.
Financial Advisor: – Are municipal bond premiums too rich? – Everyone is watching the Treasury market for the slightest inch upward in interest rates. Financial advisors with clients in tax-free muni bonds are likely to be particularly interested. Their lips probably are posing the same question: Are munis still worth the premium?
Bloomberg: – California turns corner with upgrade as pensions choke Illinois. – California’s first credit upgrade in six years shows how curbs on pension costs, a voter-backed tax boost and an improving economy have allowed it to exit Wall Street’s basement, leaving Illinois as the lowest-rated state.
Gross: Steady to higher participation rate suggests unemployment a long time away from 6.5%. Sell long-term bonds, own 5-7 yr maturities.
— PIMCO (@PIMCO) February 1, 2013
RT @stephenfoley Sharp drop in Treasuries yields in wake of poor jobs numbers; 10-yr now 1.98% from 2.00%
— Chris Adams (@chrisadamsmkts) February 1, 2013
Funny how Moody’s can downgrade ~13 times more #muniland debt than upgrade in 2012 but somehow the economy is fine?
— Cate Long (@cate_long) February 1, 2013