Salient to Investors: Second-lien loan issuance has climbed to $17.1 billion in 2013, versus $18.6 billion in all of 2012 and on pace to beat the record $28.7 billion issued in 2007. Second-lien loans have fallen 0.3 percent since Bernanke said the Fed could pare QE, while junk bonds have
READ MORE... →Salient to Investors: Jim Rogers said: When investing, don’t follow the crowd Most government numbers are made up. China has problems with housing and inflation as the US did in the 19th century when it was growing rapidly. Every country that grows rapidly has problems. The US had recessions and
READ MORE... →Salient to Investors: Tomoya Masanao at Pimco said: Investors should be wary of high-yield borrowers as slowing growth in Asia threatens profitability. China will average 6 percent to 7.5 percent annual growth during the next 5 years versus 9 percent annual for the past 5. Companies in Asia outside Japan almost tripled junk bond sales
READ MORE... →Salient to Investors: Paul Farrell writes: We are at a market top and an economic turning point. Bernanke’s non-stop cheap-and-easy-money printing presses are loved by Wall Street banks but are bad for the rest of America. His reappointment – certain to become Obama’s greatest domestic blunder – so shocked Nassim Taleb
READ MORE... →Salient to Investors: Wall Street firms are once again selling debt that may be poised to lose value. Wall Street is selling junk bonds at a record pace after they returned 19 percent in 2012, but says it’s obvious that prices will drop when interest rates rise. The amount of
READ MORE... →Salient to Investors: As high-yield ETFs suffer unprecedented withdrawals, the combined value of the 5 biggest fell 7 percent in January. Peter Tchir at TF Market Advisors said a pullback 3 times bigger than for mutual funds suggests hedge funds et al are cherry picking rather than investing in the broader market. Tchir said
READ MORE... →Salient to Investors: FRB Governor Jeremy Stein sees a significant pattern of reaching-for-yield behavior emerging in corporate credit, which bodes ill for expected returns to junk bond and leveraged-loan investors. David Tawil at Maglan Capital said the bulls will continue to run despite the loud chorus that this is crazy because there’s nowhere else to put
READ MORE... →Salient to Investors: A. Gary Shilling at A. Gary Shilling & Co writes: Investor zeal for yield and disregard for risk favors the junkiest of the junk. When the grand disconnect between investor focus on the immense liquidity created by central banks and weak and weakening global economies becomes unsustainable, probably
READ MORE... →Salient to Investors: Goldman Sachs said homebuilders have already priced in the housing recovery, so investors need to look beyond these stocks for the ripple effects of housing stabilization – like certain versions of the ABX and US domestic banks. Kyle Bass at Hayman Capital Mgmt said senior-ranked subprime debt offer
READ MORE... →Salient to Investors: Investors are placing a record volume of bearish bets on junk bonds by shorting State Street’s junk bond ETF that owns the notes as the debt loses value for the first month since May. Markit Group reports the volume of borrowed shares of the SPDR Barclays High Yield Bond
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