Weekly Fixed Income Summary, Outlook, & Strategies
Crowded, Like 20 People in a VW Bug Crowded Last week we focused on how crowded high yield was becoming. That people were treating it almost like AAA and that is not a good thing. Well, the week started strong, but ended poorly, and ultimately finished basically unchanged with the FOMC as the inflection point. […]
The T-Report: Applesauce
The Market is Always Right – Wrong You learn very early on in this business that the market is always right. That whatever your view or your opinion or your valuation, the market is always right. Something about Apple seems to be breaking that for me. I disliked apple at 650 and felt like I […]
The T-Report: Bears in Bull’s Clothing
Bears in Bull’s Clothing There are just a lot of people who are relatively bearish on the economy and the outlook, yet positioned bullishly. It is based on the central bank liquidity and another round of can kicking in Washington. The Fed played re-iterated its commitment to flood the world with liquidity. Washington is likely […]
The Evolution of Super Senior CDS
Synthetic CDO’s Starting at the beginning is a good place to start. A synthetic CDO is a “CDO” made up of credit derivatives. A typical one would contain 100 “Reference Entities” or companies. They could be bigger, rarely were they smaller because that wasn’t optimal for the “tranching”. The “first loss tranche” or “equity” tranche […]
The T-Report: Will Ben Keep an Ace up his Sleeve?
Ben Wants to Ease and Eventually Will David Copperfield doesn’t do the disappearing elephant as his first trick. Houdini probably did some sleight of hand before getting chained up and immersed in water. While Ben wants to ease, he may want to wait a little to bit. Ben is ready, willing, and able, heck, chomping […]
The T-Report: Lend Onto Others as You Would Have Them Lend Onto You
Lend Onto Others as You Would Have Them Lend On To You We have moved fully into a world where lending decisions are based on who needs it and not who deserves it. I remember the days of deal roadshows where equity investors would come out excited, and the bond investors, more senior in the […]
Fixed Income Target Portfolio Revised Allocations
Fixed Income Allocation Changes Leveraged loans down to 20% in CORE and 10% in each of Traded and Aggressive HY Short increased to 20% from 10% in Aggressive. Other “postion” reduced to 2% from 4% in other Getting bearish here and taking advantage of the markets decision to ignore overnight concerns in Europe and […]
Weekly FI Overview & Strategy: Is CCC the new AAA?
Is CCC the new AAA? No, CCC isn’t the new AAA, but the market is starting to trade it that way. It was a decent week for fixed income, but what stood out for me was the strength in the high yield market. I thought the demand for high yield debt would subside and that […]
Greek Bond Trading Strategy from Last Week
One of the Best Performing Bonds With all that is going on, it is hard to remember, that Greek PSI bonds have actually had a good year. This is the 2023 maturity PSI bond. Is started out around 26.5 then dropped to below 15 after the elections that took the world into a summer of […]
A note on Greece from Last Friday
Greece Update So I attended this Greek conference yesterday. It was interesting in many ways. Trying to sift through the hype and figure out the reality is a bit tricky, but here is what I take away. Samaras had a taped message that was very pro business. His line about switching from Red Tape to […]
