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发表于 2011-9-17 13:16
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Current situation0 Y, W6 N" Q0 H. C& n
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- r0 ], L5 k G0 D- c
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ P" X% Q3 @3 s
impose liquidation values.
/ J$ _' [8 C- G) n D9 l2 e/ r In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 v. C; ` f0 U9 n; M* n4 ^
August, we said a credit shutdown was unlikely – we continue to hold that view.; H/ A" I4 I O- ~! `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' L: R! e J5 ?% X, A" Escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ N% N$ z- T: E# [3 M! d
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A look at credit markets
& t; ~9 z2 W- E* s3 x4 U Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' ?- l2 d( E0 Y/ j, c. E
September. Non-financial investment grade is the new safe haven.
3 Y. t {+ w9 h* N5 w& k* o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; l! L- |( z6 {' z5 @0 j
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 p" O$ h6 O9 Z& t
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, N" U- z5 t/ `' D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- @* u( S/ @/ E) u- DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# l8 I& x% n1 a! B+ l5 \
positive for the year-do-date, including high yield.
9 U. V6 P4 F3 ?% c6 E+ p# ~, q2 ~ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& f) C* ^- y7 C4 Lfinding financing. u+ L/ w+ x5 l' v: y9 B5 ^
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, y5 [3 W0 K# e
were subsequently repriced and placed. In the fall, there will be more deals.+ V6 A2 h8 f9 v% n
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 [; ~/ M7 \/ C9 e: Bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ Z2 k* X3 \- Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ K2 D# N' x; U& M* h
bankruptcy, they already have debt financing in place.+ ]/ P8 V1 }7 r( `# V/ p0 Q% \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& P" l2 v( d4 P8 h3 Etoday./ Y" \6 ~4 V2 M8 g, s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 |" Y( v1 {' A; p: a5 Wemerging markets have no problem with funding. |
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