Salient to Investors: Morgan Stanley and Municipal Market Advisors says investors should prepare for the first year of muni-bond losses since 2008 Bank of America Merrill Lynch says munis have earned 20 percent since the start of 2011, the best two-year run since 2001. The median analyst expects 10-yr T-bond yields to rise
READ MORE... →Salient to Investors: Bill Gross at Pimco recommended TIPS and said to avoid longer-term maturity Treasuries because central bank policies will spur growth that will lead to higher costs in the economy. Yoshiyuki Suzuki at Fukoku Mutual Life said that while in the short term, bonds are a safe haven, longer-term yields are not enough because inflation is an
READ MORE... →Salient to Investors: Abdul Kadir Hussain at Mashreq Capital DIFC said fixed-income returns in the Gulf region may drop by half to between 4 percent and 6 percent in 2013 because 3 years is a long time to have a rally and valuations are priced to perfection – the last time they were this high was in 2006 or
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: Jeffrey Gundlach at DoubleLine Capital says: The first phase of the coming debacle was the 27-year buildup of corporate, personal and sovereign debt to 2008. The third phase will be deeply indebted countries and companies defaulting sometime after 2013. Buy gemstones, art and commercial real estate and other hard assets. Chinese
READ MORE... →Salient to Investors: Andrea Guzzi at IST Investmentstiftung fuer Personalvorsorge said the global economy is recovering and healing, thanks to the US and the emerging markets – more people are becoming wealthy, less and less are poor. Guzzi said many countries have oversized banking sectors. Gala Prada at Fiatc Mutua de Seguros y Reaseguros expects
READ MORE... →Salient to Investors: In a Bloomberg global poll of investors: 75% expect a short-term agreement to avert the fiscal cliff, 6% expect to go over the cliff and into a recession. 40% expect financial markets to rise after a short-term tax-and-spending deal, 28% see no significant market reaction, 26% say markets would fall. 7% see no sweeping accord, 50%
READ MORE... →Salient to Investors: Ding Zhijie at the University of International Business and Economics said: China has noticeably reduced purchases of dollars from local banks to allow commercial banks to trade among themselves, which may cap China’s foreign-exchange reserves and consequently its demand for US government debt. China’s official foreign-exchange reserves will be stable
READ MORE... →Salient to Investors: Anthony Valeri at LPL Financial said the market is definitely not concerned about the US becoming Greece. Long term, projected increases in health-care costs will make the US budget path unsustainable. The CBO says debt as a percent of the economy exceeds 70 percent for the first time since
READ MORE... →Salient to Investors; Bond bears are buying Treasuries despite less-than-inflation yields that are the least in three years. Even bears who aren’t buying don’t expect 10-yr note yields rising much above 2 percent. Donald Ellenberger at Federated Investors said Treasuries offer little real value, but for the short-term, it is just hard to
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