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发表于 2011-9-17 13:16
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Current situation
! B4 H2 c+ L1 q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 a7 w+ N: `8 J; ^* C8 T3 X* Pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( N+ D3 N7 b. y5 p
impose liquidation values.' j( P! [7 ~+ b$ J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) I7 m# j! l" r1 d
August, we said a credit shutdown was unlikely – we continue to hold that view.8 Y3 x& p: H2 w( V, U1 z! t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% A8 @3 e W$ I/ bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& l. r$ J/ Q5 f. m6 o! Y
, A6 h$ ]2 v Q9 q( g$ H& iA look at credit markets4 E8 ?- z. A9 B5 W/ s
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* z4 _9 d9 o/ F/ ~3 u' S7 gSeptember. Non-financial investment grade is the new safe haven.; N! @3 `6 I. u6 B# {+ t+ ?
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 ` Z5 X" O/ p( I( ?/ U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 \; w0 B' \7 ~) {! V; Hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 v \+ n! L" [5 v5 O" n2 a4 r& K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- v* P! Y! @. Q OCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) l8 Q, N; {; Vpositive for the year-do-date, including high yield.
& {3 |: P6 V7 H, u) c$ q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! q3 s7 }* C* C9 ?$ V! {2 d( J8 gfinding financing.
4 ]) m8 d, l* i2 I7 H" p Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ p: M+ R/ t) R {5 q8 s; ~were subsequently repriced and placed. In the fall, there will be more deals.
- W. o. e% a3 E$ q- s+ x Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 |: C! t0 O3 l) u$ R9 z; [is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) V: ~8 \; \9 Z& e9 v# {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 P" [: P+ z6 \. B2 e" s. D3 s& {( ubankruptcy, they already have debt financing in place.: u# e* r! o6 s. A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# F5 ~ Z; Y6 a( Z6 d# ^today.
' ], E! H) L- V+ v6 P/ H8 d3 H Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# n1 P' y" b% g$ F/ N2 ^; i
emerging markets have no problem with funding. |
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