Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

peering into bondland

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I was checking prices lately in bond land and Countrywide paper is being offered at DEEP discounts (like 15% yield for 1 year,etc.) This is a reaction of investment advisors, acting in the clients best interests, to get rid of that waste BEFORE a, ahem, serious liquidity event.

Also, I’m seeing that FNMA and FHLM bonds (which have an implied AAA rating and assume a taxpayer backing) are trading at yields than mere-mortal corporate bonds of lower rating (A or AA). This tells me a) again investment advisers are dumping their headaches or b) the implied-AAA isn’t quite as powerful as thought.

Also, a huge stock rally shouldn’t surprise us. It’s been oversold lately, and the bulls feel that the Fed is protecting their backside, urging them along. Prices don’t lie, but keep stop losses tight to stay in the game.

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Written by heyercapital

August 20, 2007 at 9:04 pm

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