Bloomberg.com – Apollo’s Harris Says Bring It On to Rising Interest Rates Apollo Global Management LLC (APO), an investment firm that oversees two times the dollar amount in credit assets than in private-equity holdings, isn’t worried about rising interest rates. “We welcome a rising interest rate environment,” Josh Harris, an Apollo co-founder, said on a… Continue reading Money Management
The Financial Times – Risk culture must change to protect financial system Financial firms are dialling up risk in their search for yield due to the extraordinary amounts of liquidity created by central banks, and the prolonged low rate environment. This is often not being done prudently; the key causes of past financial crises are… Continue reading Forgetting The Lessons Of Past Crises
Bloomberg.com – Yellen Spurs Dollar Bargain in Payrolls Quirk An “anomaly” in dollar-yen trading just before and after the release of the U.S. monthly payrolls report represents an opportunity for investors to buy the dollar against the yen, according to Mizuho Securities Co. The CHART OF THE DAY shows the greenback rising against the yen… Continue reading The Dollar-Yen Payroll Quirk
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Charts of the Week Topics Covered This Week Include: The Relationship Between Bonds vs Stocks Dividend Yields vs. Interest Rates Looking For A Correction? An Earnings Update An Earnings Update – 2 An Argument For Reverse Repos Guidance Trends Treasury Bills – Supply & Demand TIPS’ Forecasting Ability ETF Assets An Updated Look At Central… Continue reading Charts of the Week
Comment We recently received the following note and chart above from a colleague: Prior to the credit crisis which brought down Lehman and launched El Erian’s New Normal (as I say, not so “new” anymore), equity dividend yields were ALWAYS below bond yields. The reason: dividend yields traded at a discount because equity ownership brought… Continue reading Dividend Yields vs. Interest Rates
Minyanville – High-Yield Bonds Plus High Volatility Equals High Pain Over the past several weeks, as corporate credit spreads have widened and junk-backed ETFs like JNK and HYG have fallen significantly in value, the media and many market participants have commented on how the cutbacks in fixed income trading are adversely impacting the market. Even… Continue reading High-Yield Bonds And Stocks
FiveThirtyEight.com – Nate Silver: Republicans Remain Slightly Favored To Take Control Of The Senate If Americans elected an entirely new set of senators every two years — as they elect members of the House of Representatives — this November’s Senate contest would look like a stalemate…Generic congressional ballot polls — probably the best indicator of… Continue reading Who Will Control The Senate After November?
Business Insider – Now It’s Time To Think About What Will Happen When Companies Stop Buying Back So Much Stock… Ultimately, stock prices are determined by supply and demand. When more money is seeking fewer shares, stock prices go up. And vice versa. So when you’re trying to get a sense of what is driving… Continue reading Stock Buybacks
<Click on chart for larger image> The Financial Times – Wall Street’s dark day for M&A Tuesday, August 5 2014 is likely to go down as one of the darker days in the history of Wall Street’s mergers and acquisitions market. In the space of a few fraught hours, deals worth more than $100bn collapsed,… Continue reading Yesterday’s “Dark Day” For M&A
<Click on chart for larger image> Business Insider – Corporate America Is Borrowing Like Crazy Companies, however, have not slowed their pace of issuing debt, however, with investment-grade corporate bond issuance currently at $375.5 billion year-to-date, up 7% from a year ago. Even without a recession or economic downturn, the bill on these debt loads… Continue reading Corporate Bond Issuance
The Financial Times – Banks seek to revive mortgage bond market Large banks have revealed their biggest attempt yet at reinvigorating the market for bonds comprised of US home loans as they seek to create a new generation of mortgage-backed securities. The project, spearheaded by the Structured Finance Industry Group, or SFIG, comes six years… Continue reading Reviving The Mortgage Bond Market