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发表于 2011-9-17 13:16
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Current situation
& W4 Z9 X2 y4 i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: c. O. I% S4 ~8 O3 ^4 }
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, B" M x5 J: \. j: T
impose liquidation values.; Q# i. J! G8 {5 j5 _( y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! ?+ ]6 `8 E7 l( l' iAugust, we said a credit shutdown was unlikely – we continue to hold that view.
1 [! C5 E3 I& n# P2 m The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* q. M: c. Q5 y& x/ Vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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7 N5 o1 F1 a" R9 G% B; c4 cA look at credit markets3 n8 i; R, W/ Z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 N) R* T G* j. Q* x3 XSeptember. Non-financial investment grade is the new safe haven.
/ f0 ]* a% g" g% k4 y- F4 r High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% L- k1 }2 S; k6 v* Ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: i8 P- C$ Y9 x0 [: q+ c
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. G1 a/ @' h- e! [ T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; U& o `' ?5 Z" I: x
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% P3 r# B2 N- h& N/ h# z D, b
positive for the year-do-date, including high yield.& X, u6 v2 Y/ j# q( n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& l; C$ j J0 @7 {1 d* O3 n
finding financing.
9 R9 Z* X7 O$ c( y# |) ` Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 g S2 T# d A6 z
were subsequently repriced and placed. In the fall, there will be more deals.
1 \& f. M9 q, e$ i- v7 A8 k9 s Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 ]( k( h/ K( ?/ o% B/ Z0 A2 l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 u+ ^7 J% u w- g! X
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 X0 `* h' U4 ibankruptcy, they already have debt financing in place.2 X% k# e3 _" y, k
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 _& j3 g/ |1 i. p
today.! r/ E3 ?4 h/ E8 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! H/ m1 ~- {; o( s7 w- s; U$ F6 Z- _$ D# N
emerging markets have no problem with funding. |
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