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Showing posts with label bonds. Show all posts
Showing posts with label bonds. Show all posts
Wednesday, March 9, 2011
PIMCO under Bill Gross Holds No US Treasuries
Bill Gross, who manages the world's largest mutual fund, the Total Return fund, at fixed income giant PIMCO, currently holds no US treasuries. It might be said that this is quite a statement.
2011/03/09
ZeroHedge:
Based on still to be publicly reported data by Pimco's flagship Total Return Fund, the world's largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in "government related" securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion (based on total TRF holdings of $236.9 billion as of February 28). This is the most cash the flagship fund has ever held, and the lowest amount in Treasury holdings since January 2009 before it was made clear that the Fed was going to adjust QE1 to include Treasurys in addition to Mortgage Backed Securities. PIMCO's Treasury holdings peaked in June 2010 at $147.4 billion and have declined consistently ever since.
2011/03/09
ZeroHedge:
Based on still to be publicly reported data by Pimco's flagship Total Return Fund, the world's largest bond fund, in the month of January, has taken its bond holdings to zero (and -14% on a Duration Weighted Exposure basis). The offset, not surprisingly, is cash. After sporting $28.6 billion in "government related" securities, TRF dropped to $0.0, while its cash holdings surged from $11.9 billion to a whopping $54.5 billion (based on total TRF holdings of $236.9 billion as of February 28). This is the most cash the flagship fund has ever held, and the lowest amount in Treasury holdings since January 2009 before it was made clear that the Fed was going to adjust QE1 to include Treasurys in addition to Mortgage Backed Securities. PIMCO's Treasury holdings peaked in June 2010 at $147.4 billion and have declined consistently ever since.
Wednesday, January 19, 2011
Fitch Indicates that US Debt Should Be Downgraded
iMarketNews.com
Wednesday, January 19, 2011 - 13:41
Fitch: US Fiscal Metrics To Be Worst Among 'AAA' Sovereigns
By Yali N'Diaye
WASHINGTON (MNI) - Fitch Ratings Wednesday said it believes "the U.S. fiscal metrics will be the worst of any 'AAA'-rated sovereign," due to the higher-than-expected deficits and debt levels expected following the extension of the Bush era tax cuts.
This despite the expected boost to U.S. GDP this year and in 2012.
And just like their peers at Standard & Poor's and Moody's, analysts at Fitch Ratings warned in their latest Credit Outlook that "the absence of a credible medium-term fiscal consolidation strategy is eroding confidence in the sustainability of public finances and commitment to low inflation, with potentially adverse implications for the U.S. sovereign credit standing."
Still, they note the "higher debt tolerance than for other 'AAA' and highly rated sovereigns" due to the "extraordinary fundamental credit strengths" of the U.S., the flexibility and dynamism of its economy and the status of the greenback as a global reserve currency.
...
This echoed Moody's analysis last week, saying that the U.S., the UK, France and Germany "still possess debt metrics, including debt affectability, that are compatible with their Aaa ratings."
Germany 1. USA -1.
--------------------
2011-02-03
S&P says no plans to cut U.S. rating in medium term:
Ratings agency Standard & Poor's does not have any plans to downgrade the U.S. sovereign debt rating, but it believes credit risk may increase in the long term, a senior official at the agency said on Thursday.
Wednesday, January 19, 2011 - 13:41
Fitch: US Fiscal Metrics To Be Worst Among 'AAA' Sovereigns
By Yali N'Diaye
WASHINGTON (MNI) - Fitch Ratings Wednesday said it believes "the U.S. fiscal metrics will be the worst of any 'AAA'-rated sovereign," due to the higher-than-expected deficits and debt levels expected following the extension of the Bush era tax cuts.
This despite the expected boost to U.S. GDP this year and in 2012.
And just like their peers at Standard & Poor's and Moody's, analysts at Fitch Ratings warned in their latest Credit Outlook that "the absence of a credible medium-term fiscal consolidation strategy is eroding confidence in the sustainability of public finances and commitment to low inflation, with potentially adverse implications for the U.S. sovereign credit standing."
Still, they note the "higher debt tolerance than for other 'AAA' and highly rated sovereigns" due to the "extraordinary fundamental credit strengths" of the U.S., the flexibility and dynamism of its economy and the status of the greenback as a global reserve currency.
...
This echoed Moody's analysis last week, saying that the U.S., the UK, France and Germany "still possess debt metrics, including debt affectability, that are compatible with their Aaa ratings."
Germany 1. USA -1.
--------------------
2011-02-03
S&P says no plans to cut U.S. rating in medium term:
Ratings agency Standard & Poor's does not have any plans to downgrade the U.S. sovereign debt rating, but it believes credit risk may increase in the long term, a senior official at the agency said on Thursday.
Friday, January 7, 2011
POMO - Permanent Open Market Operation
a POMO, is not a queer p, but a Permanent Open Market Operation, a P-OMO - a direct intervention in the market by the US monetary authority.
NY Fed: Permanent OMOs
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).
On March 18, 2009, the FOMC announced a longer-dated Treasury purchase program with a different operating goal, to help improve conditions in private credit markets.
On August 10, 2010, the FOMC directed the Open Market Trading Desk at the Federal Reserve Bank of New York to keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.
On November 3, 2010, the FOMC decided to expand the Federal Reserve's holdings of securities in the SOMA to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
NY Fed: Permanent OMOs
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).
On March 18, 2009, the FOMC announced a longer-dated Treasury purchase program with a different operating goal, to help improve conditions in private credit markets.
On August 10, 2010, the FOMC directed the Open Market Trading Desk at the Federal Reserve Bank of New York to keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.
On November 3, 2010, the FOMC decided to expand the Federal Reserve's holdings of securities in the SOMA to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Wednesday, January 5, 2011
SHIBOR - Shanghai InterBank OverNight Rate
Wikipedia:
The Shanghai Interbank Offered Rate (or Shibor, 上海银行间同业拆放利率) is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Shanghai wholesale (or "interbank") money market. There are eight Shibor rates, with maturities ranging from overnight to a year. They are calculated from rates quoted by 16 banks, eliminating the two highest and the two lowest rates, and then averaging the remaining 12.
http://www.shibor.org/
google translation
Current Quote & Interactive Chart @ Bloomberg
Market Overview @ China Daily
2011/01/05 @ ZeroHedge:
Here is Morgan Stanley's explanation of what is happening in China:
SHIBOR surged: As multiple RRR hikes have started to take effect, market liquidity has become very tight. Compounded with the year-end liquidity shortage and heightened expectation of further rate hikes, large banks have almost stopped lending into the interbank market. In this context, the SHIBOR has surged in the past two weeks, with the 7-day, 1-month and 3-month rates jumping 269bps, 187bps, and 74bps, respectively.
2011-01-21 @ ZeroHedge:
Today, the 7 day SHIBOR (and repo rate) has just surged to new multi-year highs and has literally exploded from 2.5% to 7.3% in a few short days.
The Shanghai Interbank Offered Rate (or Shibor, 上海银行间同业拆放利率) is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Shanghai wholesale (or "interbank") money market. There are eight Shibor rates, with maturities ranging from overnight to a year. They are calculated from rates quoted by 16 banks, eliminating the two highest and the two lowest rates, and then averaging the remaining 12.
http://www.shibor.org/
google translation
Current Quote & Interactive Chart @ Bloomberg
Market Overview @ China Daily
2011/01/05 @ ZeroHedge:
Here is Morgan Stanley's explanation of what is happening in China:
SHIBOR surged: As multiple RRR hikes have started to take effect, market liquidity has become very tight. Compounded with the year-end liquidity shortage and heightened expectation of further rate hikes, large banks have almost stopped lending into the interbank market. In this context, the SHIBOR has surged in the past two weeks, with the 7-day, 1-month and 3-month rates jumping 269bps, 187bps, and 74bps, respectively.
2011-01-21 @ ZeroHedge:
Today, the 7 day SHIBOR (and repo rate) has just surged to new multi-year highs and has literally exploded from 2.5% to 7.3% in a few short days.
Friday, December 24, 2010
Mono-Line Municipal Bond Insurer AMBAC to Declare Bankruptcy
Ambac Financial Group, a holding company for Ambac Assurance Co, itself an insurer of American municipal debt in the form of bonds, has petitioned for chapter 11 bankruptcy relief. This has occurred as a result of Ambac being unable to service its debt obligations, reported as $ 1.6 billion.
- - - - - - - - - - - - - - - - - - - -
NOV 8, 2010 6:37pm ET
Patrick McGee @ The Bond Buyer
Ambac Financial Group Files Chapter 11 Petition
Ambac Financial Group announced late Monday it filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.
The company, which held $1.6 billion of debt as of June 30, said it will “continue to operate in the ordinary course of business as 'debtor-in-possession’ under the jurisdiction of the Bankruptcy Court.”
...
Shares of the insurance holding company sunk by more than one-third in after-hours trading to $0.34. In normal hours, the company’s stock rose 3.75% to $0.52. The company’s stock, which peaked at $96.08 on May 18, 2007, fell below $1 for the first time in February 2009.
Ambac announced on Nov. 1 that it would skip paying a $5.9 million interest payment owed on its debt that day. The company said it was unable to raise fresh capital and would be forced to file for bankruptcy under Chapter 11 unless an agreement could be reached with its creditors on a prepackaged bankruptcy.
Those talks failed, according to a press release Monday.
- - - - - - - - - - - - - - - - - - - -
November 1, 2010, 3:47 PM EST
Colin Barr @ fortune.com
Ambac sees bankruptcy ahead
Bond insurer Ambac failed to make a scheduled $2.8 million interest payment on some debt and warned that it expects to be in bankruptcy by year-end, one way or another.
...
New York-based Ambac said it decided not to make a scheduled payment on $75 million of 7.5% debentures due 2023. If the firm doesn’t make the payment within 30 days, it could be in default on the notes and could face acceleration of that debt’s maturity.
Bankruptcy talk is nothing new for Ambac, which warned around this time last year that it could run out of funds in 2011. The firm’s fate was further solidified in August, when Ambac said for the first time it was working on a prepackaged bankruptcy with creditors.
Ambac has $1.6 billion in outstanding debt and has been trying to restructure those obligations to reduce the drain on its cash position. The firm made a mint writing insurance for Wall Street on bonds and related derivatives, such as collateralized debt obligations, during the past decade.
...
The company said one complicating factor is that while creditors will be expected to convert their debt claims to stock ownership in a reorganization, the timing of their debt purchases could knock the struts out from under the tax shelter the company has erected out of its massive postbubble losses.
- - - - - - - - - - - - - - - - - - - -
September 29, 2010 — 10:46 PM SAST
Karen Freifeld & David Mildenberg @ Bloomberg Business
Ambac Sues Bank of America Over Countrywide Bonds
Ambac Assurance Corp. sued Bank of America Corp. over $16.7 billion of mortgage-backed securities, saying the bank’s Countrywide Financial Corp. unit fraudulently induced Ambac to insure bonds backed by improperly made loans.
Ambac found that 97 percent of 6,533 loans it reviewed across 12 securitizations sponsored by Countrywide didn’t conform to the lender’s underwriting guidelines, according to the complaint filed yesterday in New York state Supreme Court. Many of the loans were made to borrowers with limited or no ability to meet their payment obligations, Ambac said.
The lawsuit follows negotiations between Bank of America, which acquired Countrywide in 2008, and Ambac over mounting losses caused by loans made during the early 2000s as U.S. housing prices soared. Ambac has paid $466 million in claims from more than 35,000 Countrywide home-equity loans that have defaulted or been charged off, according to the lawsuit.
- - - - - - - - - - - - - - - - - - - -
Nov. 10, 2009 10:24 PM ET
Edward Harrison @ http://seekingalpha.com/
Ambac: Now It Warns of Bankruptcy?
Bond insurer Ambac Financial (ABK) has warned bankruptcy is a distinct possibility, sending its shares plummeting more than 30% Tuesday.
What is intriguing about this pending bankruptcy is how this company escaped bankruptcy in 2008, was downgraded continually in 2009, yet just reported billions in profit 5 days ago. Now it warns of bankruptcy?
This story also is related to municipal bonds...
- - - - - - - - - - - - - - - - - - - -
Mon Nov 8, 2010 8:08pm EST
Tom Hals @ Reuters
UPDATE 5-Bond insurer Ambac files for bankruptcy
* Files for bankruptcy with $1.68 billion in liabilities
* Company had been in talks with bondholders
* Shares down 63 percent at 19.5 cents after hours (Adds bankruptcy details, background; updates share price)
- - - - - - - - - - - - - - - - - - - -
NOV 8, 2010 6:37pm ET
Patrick McGee @ The Bond Buyer
Ambac Financial Group Files Chapter 11 Petition
Ambac Financial Group announced late Monday it filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.
The company, which held $1.6 billion of debt as of June 30, said it will “continue to operate in the ordinary course of business as 'debtor-in-possession’ under the jurisdiction of the Bankruptcy Court.”
...
Shares of the insurance holding company sunk by more than one-third in after-hours trading to $0.34. In normal hours, the company’s stock rose 3.75% to $0.52. The company’s stock, which peaked at $96.08 on May 18, 2007, fell below $1 for the first time in February 2009.
Ambac announced on Nov. 1 that it would skip paying a $5.9 million interest payment owed on its debt that day. The company said it was unable to raise fresh capital and would be forced to file for bankruptcy under Chapter 11 unless an agreement could be reached with its creditors on a prepackaged bankruptcy.
Those talks failed, according to a press release Monday.
- - - - - - - - - - - - - - - - - - - -
November 1, 2010, 3:47 PM EST
Colin Barr @ fortune.com
Ambac sees bankruptcy ahead
Bond insurer Ambac failed to make a scheduled $2.8 million interest payment on some debt and warned that it expects to be in bankruptcy by year-end, one way or another.
...
New York-based Ambac said it decided not to make a scheduled payment on $75 million of 7.5% debentures due 2023. If the firm doesn’t make the payment within 30 days, it could be in default on the notes and could face acceleration of that debt’s maturity.
Bankruptcy talk is nothing new for Ambac, which warned around this time last year that it could run out of funds in 2011. The firm’s fate was further solidified in August, when Ambac said for the first time it was working on a prepackaged bankruptcy with creditors.
Ambac has $1.6 billion in outstanding debt and has been trying to restructure those obligations to reduce the drain on its cash position. The firm made a mint writing insurance for Wall Street on bonds and related derivatives, such as collateralized debt obligations, during the past decade.
...
The company said one complicating factor is that while creditors will be expected to convert their debt claims to stock ownership in a reorganization, the timing of their debt purchases could knock the struts out from under the tax shelter the company has erected out of its massive postbubble losses.
- - - - - - - - - - - - - - - - - - - -
September 29, 2010 — 10:46 PM SAST
Karen Freifeld & David Mildenberg @ Bloomberg Business
Ambac Sues Bank of America Over Countrywide Bonds
Ambac Assurance Corp. sued Bank of America Corp. over $16.7 billion of mortgage-backed securities, saying the bank’s Countrywide Financial Corp. unit fraudulently induced Ambac to insure bonds backed by improperly made loans.
Ambac found that 97 percent of 6,533 loans it reviewed across 12 securitizations sponsored by Countrywide didn’t conform to the lender’s underwriting guidelines, according to the complaint filed yesterday in New York state Supreme Court. Many of the loans were made to borrowers with limited or no ability to meet their payment obligations, Ambac said.
The lawsuit follows negotiations between Bank of America, which acquired Countrywide in 2008, and Ambac over mounting losses caused by loans made during the early 2000s as U.S. housing prices soared. Ambac has paid $466 million in claims from more than 35,000 Countrywide home-equity loans that have defaulted or been charged off, according to the lawsuit.
- - - - - - - - - - - - - - - - - - - -
Nov. 10, 2009 10:24 PM ET
Edward Harrison @ http://seekingalpha.com/
Ambac: Now It Warns of Bankruptcy?
Bond insurer Ambac Financial (ABK) has warned bankruptcy is a distinct possibility, sending its shares plummeting more than 30% Tuesday.
What is intriguing about this pending bankruptcy is how this company escaped bankruptcy in 2008, was downgraded continually in 2009, yet just reported billions in profit 5 days ago. Now it warns of bankruptcy?
This story also is related to municipal bonds...
- - - - - - - - - - - - - - - - - - - -
Mon Nov 8, 2010 8:08pm EST
Tom Hals @ Reuters
UPDATE 5-Bond insurer Ambac files for bankruptcy
* Files for bankruptcy with $1.68 billion in liabilities
* Company had been in talks with bondholders
* Shares down 63 percent at 19.5 cents after hours (Adds bankruptcy details, background; updates share price)
Sunday, August 2, 2009
The Bond Ladder
From John Mauldin's weekly letter 'Outside the Box' [as blog], 'the Great Reflation Experiment' :
"A bond ladder is a very useful tool for most people. Holdings are staggered over, say, a five-year time frame, and maturing bonds are invested back into five-year bonds, keeping the portfolio structure in the zero-to-five-year range. In this way, some protection against a future rise in price inflation and falling bond prices can be achieved."
"A bond ladder is a very useful tool for most people. Holdings are staggered over, say, a five-year time frame, and maturing bonds are invested back into five-year bonds, keeping the portfolio structure in the zero-to-five-year range. In this way, some protection against a future rise in price inflation and falling bond prices can be achieved."
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