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发表于 2011-9-17 13:16
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Current situation8 T; Q! p' |; u) d4 p+ ?/ l2 `1 b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' ]3 y' b& z# n5 y$ ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 K8 t6 c! c% X, J; ^4 `/ h. k
impose liquidation values.5 d( Y1 B R1 p0 a$ r, Q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 r' `* l) c; q7 a" |
August, we said a credit shutdown was unlikely – we continue to hold that view.
7 S' c* }0 {3 D1 r* v: ]9 P. ^# t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& N! z' u. D- _ j+ Y4 |: k+ Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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0 A% d7 T. @9 J3 k. U4 k4 I9 A* R; vA look at credit markets' O) N3 S2 |/ p8 |( W
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% v# N L& p @! ~) P
September. Non-financial investment grade is the new safe haven.
: D0 t2 K! Z9 d: I/ j7 N, W5 ? High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ n( P, v0 J) g2 f3 m# B& e
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) J7 C8 x9 h5 ^9 Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 a2 m3 M2 R3 Z7 haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 Y+ L% v" T* @+ D" ~
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 H! d+ s" s, Z% A# n! ~positive for the year-do-date, including high yield.0 {# n# q& P7 ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ m( {( L5 ]& l- Lfinding financing.9 L$ B, z% M+ u9 q/ T' |" s/ X1 E
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! z9 p0 F) g+ f: jwere subsequently repriced and placed. In the fall, there will be more deals.
l& M- |# ^9 }1 i7 H0 `; N Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ v, C2 D3 k# X' Y( l2 z0 k/ D% pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( u# Q3 }8 B) S2 ?; h. Q2 ~! agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: F9 M6 w2 V8 y7 f4 kbankruptcy, they already have debt financing in place.
4 h' B2 r% q; ^# V) S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain V6 g$ b6 h2 F1 Q! V
today.
1 E) P9 F& j; s$ H; t) B$ ~! p9 B Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- f+ Q5 ]8 \- J* j' X, Cemerging markets have no problem with funding. |
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