It doesn’t take much to get a S&P500 party rolling—just a threat of giant tariffs and then a reversal within 72 hours will do the trick.
It’s amazing how quickly the market can move up and down–forget that the same budget deficit that has been hanging over our heads for years continues to hang over us. There MUST be folks (investors) that have a firm belief that somehow congress is going to deal with these deficits—not sure why anyone would believe that as they have proven time and again that it is near impossible. Just like at home you either cut spending or raise revenue (wages). While the announcements of all these investments in the U.S. are wonderful let’s see some of it materalize.
On the other hand maybe we will just bumble along for the next number years with higher interest rates–I can live with the higher interest rates–I have no plans to borrow money. Well we will just have to deal with it day in and day out.
Income issues are green this morning as interest rates move lower–down 7 basis points to trade around 4.44%—this has helped our accounts all remain in the green, but certainly not an amount to get excited about, but green is green.
I have made some trades today–as I wrote about on the weekend I was going to rearrange my CLO holdings—lighten up teh holdings of equity CLO holders and buy more in the debt CLO owners. I will recap what I have done either this afternoon or tomorrow.
I am just amazed how little negative correlation bonds have to this market. Almost everything was up today.
This market reminds me of one of those professional soccer matches where the ball gets kicked back and forth without much progress. There was a 3 month CD priced at 4.4% this morning from a bank I’ve never heard of, not sure if its still available.
Maybe like an NBA game from some eras that turns into a blowout so the refs let the other team creep back in to keep fan interest but when it gets close again they switch because they didn’t intend to change the outcome.
Tim, it is my opinion that these CLO firms (ECC etc.) are just leveraged plays on already leveraged loans (or bank loans). Why not just buy the loans themselves in the form of SEIX for about the same yield and no duration risk (since they are floating)?
don’t the ECCs of the world return more since they are shopping in the bargain bin well below par?
I’m only marginally surprised I don’t see CVNA bundled loans being sold to the retail…
Markets up due to monopoly money printing in Japan.
Our Western monetary system is turning into a real joke.