tag:blogger.com,1999:blog-30643134.post750917390911263877..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: 2009 Forecast: Corporates -- Carrie!!Accrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-30643134.post-57808982256216667392009-02-01T17:03:00.000-05:002009-02-01T17:03:00.000-05:00In Debt...I tend to agree with you. In fact I wil...In Debt...<BR/>I tend to agree with you. In fact I will take it a step further and say that I would take a very deep breath before buying any government debt (other than short term) right now, including Federal. I think there are a lot of factors out there that are pointing to a spike in yields over the next 12- 24 months.<BR/><BR/>Anyone looking at munis should keep their powder dry for now.John (Ad Orientem)https://www.blogger.com/profile/14329907942477160166noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-12046851360562525592009-01-30T23:20:00.000-05:002009-01-30T23:20:00.000-05:00I have lost all enthusiasm for munis.http://www.cb...I have lost all enthusiasm for munis.<BR/><BR/>http://www.cbpp.org/9-8-08sfp.htmIn Debt We Trusthttps://www.blogger.com/profile/05283475872936333396noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-73161855695619606452009-01-29T13:11:00.000-05:002009-01-29T13:11:00.000-05:00Great post, AI.I also have been looking at corpora...Great post, AI.<BR/><BR/>I also have been looking at corporate bonds and also select preferred shares as places for yield.<BR/><BR/>I think one other market factor that you are alluding to but not explicitly stating is the discrimmination by industry. Big Pharma yields deserve to be very low in this environment because their main trading counterparty is government insurance (Medicaid, Medicare, etc). <BR/><BR/>One well seasoned preferred issue I have been big on is XFR. BMY balance sheet is solid, and their income is generally sustainable. Just an idea.Lockstephttps://www.blogger.com/profile/18341236022895829445noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-33880678343382781452009-01-29T12:11:00.000-05:002009-01-29T12:11:00.000-05:00Jake:I did mention inflation.Avant:If you hold to ...Jake:<BR/><BR/>I did mention inflation.<BR/><BR/>Avant:<BR/><BR/>If you hold to maturity, then its a carry play, not a capital appreciation play.<BR/><BR/>Volkan:<BR/><BR/>Agreed. I've talked about this several times in the past. Lack of leverage changes the basic equation of bond arbitrage.<BR/><BR/>Credit:<BR/><BR/>I think a big part of the problem is that the talking heads are mostly versus index managers. Which is fine, but for many investors index returns don't matter. If the Barc Agg returns -4% next year and I do -2%, I'm lauded. But for many investors, its not really accomplishing anything.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-75421262422970254052009-01-29T12:02:00.000-05:002009-01-29T12:02:00.000-05:00I cant believe that JNJ 2013 YTM is 2.5%.... What ...I cant believe that JNJ 2013 YTM is 2.5%.... What a weird world we live in.... <BR/><BR/>..............<BR/><BR/>AI thanks for putting this write up together. Very helpful...<BR/><BR/>.......nadeshttps://www.blogger.com/profile/08342800035327545420noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-46361206031097406022009-01-28T21:06:00.000-05:002009-01-28T21:06:00.000-05:00AI - thank you! - Finally someone else gets the jo...AI - thank you! - Finally someone else gets the joke! All the talking heads (of which I am one unfortunately) are saying corporate bonds are the buy of the century. Your spread over yield argument is one I trot out every day to clients with the response (oh yeah!) mostly. The other one that worries me is when they talk about LQD or JNK Bond ETFs as a great way to play this!!!! Again these are yield based and if you think that Treasuries stay here for more than 10 mins then think again...We are pushing long LQD, Short TLH if u really want to get long corporate risk but otherwise, know your trade! Thanks again for ringiong the bells on this one.CreditTraderhttps://www.blogger.com/profile/03459739275420385448noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-22274586197877654602009-01-28T19:15:00.000-05:002009-01-28T19:15:00.000-05:00Besides low yields, inflation concerns, potential ...Besides low yields, inflation concerns, potential defaults or dilutions, bond buyers should also be concerned that there is a missing part in the demand equation.<BR/><BR/>De-risking in the financial system will not be good for these corporate bonds. There was a time when some institutions bought these securities yielding less than 100 bps spread and levered 1 to 30 to get annual returns up to 30%. No more! Even modest 10% return targets would not be achieved with such spreads under new leverage restrictions.Volkanhttps://www.blogger.com/profile/05055077330310970064noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-56639126310256130632009-01-28T18:42:00.000-05:002009-01-28T18:42:00.000-05:00The example you use is a Johnson & Johnson bon...The example you use is a Johnson & Johnson bond maturing in 2013. You write " global economics improves global economics improves ". This argument assumes that the global economy will start growing before the bonds matures, which is a probable but not certain scenario. I have written elsewhere that we may need to reset our inflation and nominal return expectations as a result of the magnitude of the crisis. Certainly the citizens of Iceland will not forget 2008 for a very long time.Advant Guardhttps://www.blogger.com/profile/13724697741711826082noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-87966508463778007722009-01-28T17:21:00.000-05:002009-01-28T17:21:00.000-05:00You forgot one HUGE element... inflation (or the l...You forgot one HUGE element... inflation (or the lack thereof). At current breakeven inflation levels, real yields have increased dramatically and these breakeven levels can be taken advantage of rather easily through swaps, or even Treasuries if scared of counter-party exposure (long TIPS / short Treasuries).Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.com