Best of the Bond Market for June 28th, 2012
PIMCO: Bill Gross’ Monthly Market Update Summary Below:
Not only banks and insurance companies but sovereign nations as well cannot all be counted on to guarantee a return of principal, let alone a return on investment.
An authentic debt crisis – which the world is now experiencing – can only be ultimately cured in two ways: 1) default on it, or 2) print more money in order to inflate it away.
There are very few clean dirty shirts in this world. Timing in investment markets is critical and at the moment the U.S. is considered to be the cleanest.
BusinessWeek: Gross Says Decades Needed to Normalize from Too Much Debt – “Don’t underweight Uncle Sam in a debt crisis,” Gross wrote. “Money seeking a safe haven will find it in America’s deep and liquid, almost Aaa rated, bond and equity markets.”
Bond Buyer: Stockton Drama Heads for Court – The big question in the municipal bond market right now is how much of a hit will be borne by investors in a and insurers of the more than $300 million of bonds supported by Stockton’s general fund.
Reuters MuniLand: Stockton Hits the Wall – After Stockton missed several bond payments, the bank representing bondholders seized three city-owned parking garages and the city hall. They look prepared to protect their interests. With the bankruptcy court ruling in the Vallejo case I can imagine that bondholders, or the bond insurers more particularly, may be ready to face off against retirees and CalPERS. CalPERS makes a formidable opponent, but bondholders might have sufficient resources and incentives to fight the pension behemoth.
Bloomberg: Redemptions Converge With Refundings Fueling Rally: Muni Credit – The $3.7 trillion municipal market is set for a sixth straight quarterly gain, the longest streak since 2007, according to Bank of America Merrill Lynch data. The securities have …
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