Economic observers and money managers have faced a confusing environment since last summer, when then-Chairman Ben Bernanke shook the complacency of the market and signaled a tightening. Markets are made at the margin, and in this case the tightening, in … Read more
Leave a Comment Retail investors are currently pouring money into “bank loan” funds at a record rate, and the longer term implications are cringe worthy. The popularity and rationale for investor interest has some merits, but only on the surface. The reasoning goes … Read more
5 Comments This is a bull case for the equity in a subprime lender formerly owned by AIG. David contends the company may be in for a bright future due a confluence of factors that would have seemed unlikely just a few months ago, including the return of the asset-backed securities (ABS) market and the credit quality of subprime borrowers. As you read, imagine how you would have reacted to these same words written just a few years ago. Read more
1 Comment Value in the fixed-income markets, as in other asset classes, is driven in large part by fear and greed. The easy monetary policy communicated to the market through “QE infinity” in fall 2012 fueled a chase for yield that was already strong. … Read more
9 Comments The rapid selloff in the US Treasury market has come as a surprise to many, including such famous bond investors as Bill Gross, CFA, and Jeffrey Gundlach. As the chart below shows, 10-year yields on US Treasuries (10yr UST) are about 130 … Read more
4 CommentsAs the market debates whether the Fed should “taper” the pace of QE asset purchases, an uncomfortable truth is beginning to face market participants. With the majority of QE benefits already having been felt, the tapering of QE is inevitable at this point … Read more
5 Comments One of the primary objectives of the Fed’s policy was to enable as many homeowners as possible to refinance into a lower mortgage rate. The Fed affected rates not only through its language and guidance but also through the outright … Read more
4 Comments