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发表于 2011-9-17 13:16
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Current situation. u4 ?1 ^' U9 g! Z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. s2 t% |3 ~- ]* j, k' Y$ {- P; S- @
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. Y: E2 n$ K$ p. w
impose liquidation values.
, P7 c& ^, b. H" L; F! t In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In" w* ~. i* M. q1 T7 b) N3 R
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 E0 V9 D- \& ~3 ^ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; d% A9 w: H) p4 W. x2 d$ M
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ Y1 A* t' \) x8 o$ ?
3 y, H: t$ G5 P) o( D6 EA look at credit markets) G6 P6 B( m# x" ^& V, m
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 K( ~9 A' u! N, U/ }5 T
September. Non-financial investment grade is the new safe haven.
3 m1 p9 B$ @: L# Q" J High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) F! \& }. h4 [then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 C2 R' a1 j& Tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) o* ~6 V6 u+ z5 Z, N3 gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 ~4 R W9 r$ Z, cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% Z5 A: N$ y; l2 }( U2 r3 @- `6 {
positive for the year-do-date, including high yield.
8 M. V) Z. y) Q% |; p, U) n Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
7 T& g z; c$ h: J2 rfinding financing.0 [& X0 h: R l, \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 @5 u( r0 [$ u$ H- @
were subsequently repriced and placed. In the fall, there will be more deals.
( \5 }# n7 b0 J' i# P- V Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, O; o! b8 |) D3 k- ]' c
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! v9 b, ?* q4 W+ S; M! G
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ i) b4 C) X6 P& t9 T, T- q9 l
bankruptcy, they already have debt financing in place.
9 z, l* x% g5 ]; O' q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* _3 _3 e9 O2 N/ k `, D
today.+ n# x9 | M" E* v w; s% J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' i# Q4 N; S$ W& cemerging markets have no problem with funding. |
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