Monday, June 22, 2009

Loans Versus Bonds Relative Value: Week of June 18

The toxic grabfest is ending. This is best seen by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 inversion in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 secured/unsecured classes. While cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 loan universe moved 9 bps tighter over last week, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 slow HY bus is still trying to load up on those Neiman Marcus bonds, hoping to see this piece of paper get taken out at par. Here's a hint - it won't.

Also, something really odd is going on with Sealy where loans ripped over 500 bps wider, while bonds were unchanged. This is eicá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r i) a bad data point, ii) an indication that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 credit market has totally lost it, or iii) Pershing Square V was a fund fully invested in Sealy Loans, collected 2/20 for investing all client's capital in hte mattress-maker's loans, blew up, had a $1 billion BWIC, and annihilated cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 loan trading levels. While iii would be fun, our money is on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 first two.





To visualize cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 phenomenal run up in credit over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 past 3 months, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 charts below should demonstrate just how foolish some credit portfolio managers have become.



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