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发表于 2011-9-17 13:16
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Current situation
+ f$ z0 O. A; X5 ~3 [ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. f2 E9 P- \) u9 Y n: Mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
F6 L0 o' ~& H( B% p2 }3 aimpose liquidation values.3 a$ ~" V o( U- P$ e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 |- j7 }7 D9 TAugust, we said a credit shutdown was unlikely – we continue to hold that view.
4 x9 a+ Z$ F" j1 q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; k% w H' Y; V: l- d" Rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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1 }# f2 b9 }2 V/ ^1 }+ e4 NA look at credit markets/ A6 Z# Q) x' d) b
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; u7 {2 K. \) l" |- R
September. Non-financial investment grade is the new safe haven.
* o& |0 M- |* b( ? High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 J. t/ W% o: @ q) H& \! X
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' K9 q/ f" _: e6 B6 \5 d
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" ^, T' Z( ^) ^ f8 L7 X' J8 raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ b/ ~9 R( K2 Q# c4 YCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 K# {! x0 |: A Q6 ~
positive for the year-do-date, including high yield.
8 U+ C Q0 w7 d) ] Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 P, A, Q# P& n; A* ?6 I0 s
finding financing.0 A, j" i; t5 H% M0 T" S
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
}9 Y# _5 T+ O, G3 G/ Ywere subsequently repriced and placed. In the fall, there will be more deals.: B4 E) C5 Y) R7 X( _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) P/ `' v8 l( `( s3 g2 }
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. I6 D6 E- g# |going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! s) d% Y6 J6 P
bankruptcy, they already have debt financing in place.! B5 }, U4 `, c; A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 U7 J. n/ Z+ i' G! vtoday.& w" w% \* _2 c. Z% O1 p
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; `4 W6 Q0 F7 n6 s' E9 F- W
emerging markets have no problem with funding. |
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