Concise picture of the world.. Investment Grade credit will get pounded.. soon
Monthly Archives: February 2013
Yardeni: Why Gold Is Down – Business Insider.
I still see the yellow metal tracing higher given the QE-xcess globally.
Exactly what I have been saying so far… too much cash on the sidelines, whether it’s on the corporate side or individual balance sheets. That cash is going to work in the asset class that has the confidence of the maret — stocks. Witness the action of Berkshire which just did its own brand of investing – using cash to buy Heinz. Funds and retail doing the same thing in their backyards.
A rare sighting of good news in Europe – FT.com.
A brilliant recap of the state of European economy. European leadership has been slow to show its true colors but Italy and Spain can still derail things. All comes down to: will the Euro look a 100% north-European in five years?
The Dell Deal Is a Steal That May Die – Barrons.com.
Pretty coherently laid out in this article. The biggest assumption for me is: will $DELL be able to keep generating the $3 billion or so in FCF year after year in a declining PC market with lower and lower market share? Dell seems confident it can do so by betting his money. But I guess he must be thinking: what do I have to lose? Even a 15% annualized return on his capital with more control is probably sweeter to him than the existing status-quo.
Interesting.. maybe this is why products like IPhone took off; because they explored the edge of user experiences, as opposed to the Blackberry recent hacks (BB10).
Aha! Guess what my take is on this? First, it is very true and possible as these low-coupon-ers in investment grade face the first wave of rate increases and get pummeled to the ground very quickly. Second, pension assets need to shore up their return target shortfall and I will not be surprised if they turn to cross overs and high yield. Granted, a lot of columns have voiced how pension assets are diversifying into esoteric assets (timber, hedge funds, private equity etc) to prop up returns but these cannot show up as high percentages on conservative sheets whereas 5B and 4B names can, with the right pension consultant approval.