Salient to Investors: Brian Edmonds at Cantor Fitzgerald said there is not a whole lot of willing buyers in Treasury land. Hedge-fund managers et al increased net-short position in 10-yr note futures last week to the most since July 2012. Jason Rogan said the numbers are on the weak side, but not enough to change
READ MORE... →Salient to Investors: William Pesek writes: A week after Japan’s debt reached the 1 quadrillion yen ($10.28 trillion) mark, yields have actually declined. BOJ Governor Kuroda is winning bondland’s full obedience with two forms of trickery: essentially transferring money via monetary policy from citizens to the government, and outright monetization of public debt. The
READ MORE... →Salient to Investors: The decline at Bridgewater Associates’ All Weather fund and similar funds shows allocating assets between stocks and bonds can leave investors overexposed to rising interest rates. Ramin Nakisa at UBS Investment Bank said June’s sell-off in Treasuries and inflation-linked bonds was just a dress rehearsal for the volatility awaiting
READ MORE... →Salient to Investors: S&P’s Capital IQ Leveraged Commentary and Data said the market for covenant-light loans has already soared to $155 billion this year, beating the record $96.6 billion in 2007. The lowest rated junk bonds were the greatest percentage of speculative-grade offerings last month since 2011. Bank of America said
READ MORE... →Salient to Investors: Kenneth Rogoff at Harvard said: Janet Yellen and Lawrence Summers qualify to replace Bernanke because of their dovishness about placing too much weight on stable inflation when unemployment is far above its longer-run level. Aggressive monetary stimulus is needed, even at the cost of moderate price increases, because with weak
READ MORE... →Salient to Investors: Caroline Baum writes: Health-care spending has collapsed in most developed nations, not just the US. But as more people get health insurance, the demand for medical care will go up, and with it the price. If Fed talk of tapering was enough to send 10-yr Treasury yields
READ MORE... →Salient to Investors: Morningstar said investors pulled $14.5 billion from Pimco’s US mutual funds in June, $18.7 billion from Pimco’s Total Return fund since May. Bill Gross at Pimco said bond managers need to adapt to an era of lower fixed-income returns by being flexible and embracing unconstrained strategies, alternative
READ MORE... →Salient to Investors: Kim Shepherd at the Wilshire Trust Universe Comparison Service said institutional investors’ allocations to dollar-denominated bonds in Q2 were 26.2 percent of assets, the lowest level since 2007, and versus 32 percent of assets in Q4 2011. David Darst at Morgan Stanley is advising clients to cut bond allocations to
READ MORE... →Salient to Investors: McKinsey & Co. and Greenwich Associates said: The corporate bond market is unsuitable for full electronic trading because it has more securities compared with listed stocks and its issues trade at a lower frequency. 80 percent of US investors and 55 percent of European investors surveyed said regulations related
READ MORE... →Salient to Investors: US Treasury notes and bonds due in a decade or more fell 13 percent in the period, the biggest loss of 174 debt indexes tracked by Bloomberg and the EFFAS. The Citigroup Economic Surprise Index climbed to the highest level since December 31 2012. Kei Katayama at
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