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发表于 2011-9-17 13:16
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Current situation' x% J1 H% x) B2 g9 o
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, ~" t" R. [$ L: q4 T1 n
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may k5 z1 P* X( i6 ^) J
impose liquidation values.2 b( \7 Q; S" e9 ]4 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! ?" H2 s3 F8 W% `, m- A9 iAugust, we said a credit shutdown was unlikely – we continue to hold that view.
- d1 _4 N, V2 X8 Y# S# z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. _. ?$ y$ x+ e# |5 Y5 Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ D0 O: g! u$ j4 v! n1 B6 S
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A look at credit markets
3 t5 O9 P) W% a& X7 s- o Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 C2 l5 r! l# m, L$ M" k9 ^
September. Non-financial investment grade is the new safe haven.
) Z3 X+ A" C, Z( \0 { High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) j5 r' Q( U, E8 ?, A, gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 q; f2 k M3 m* abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: w9 u) T4 f, X
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 S5 V. b6 a" C
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ y8 W( P$ q5 E5 i1 {positive for the year-do-date, including high yield.
8 s2 W: _# J5 h5 ^9 W% h Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: B; p) {, i2 f. R( Afinding financing.
- J4 s/ G. @* w/ h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 u2 S k' S/ a5 I
were subsequently repriced and placed. In the fall, there will be more deals.: [/ \) b- D, b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) b6 Z1 _) E8 D4 {4 a! Ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- B5 q+ Z- |% ^5 M$ q% A6 [* @, _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; _! [2 g4 S( f4 |+ `bankruptcy, they already have debt financing in place.
( j V' p& n0 D/ _4 p2 }+ B1 J. N, o European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( D; I. ?& ]6 U2 U1 e3 Y
today.5 Y# Y3 j: \7 Y. n
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# b; A j. |; \- g9 Qemerging markets have no problem with funding. |
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