Daily Commentary

Spreads are unchanged to slightly better this morning as a result of yesterday's month/quarter end buying binge. Secondary volumes were quite heavy with the dealer sell vs buy ratio stuck stubbornly at ~3x.

Both Comcast and Ameriprise are in the market with debt buybacks today.

Given the end of the first half, here's a quick review of index and sector returns (using JPM data):

Investment Grade Index +7.1%

High Yield Index +29.9%

S&P 500 +1.8%

best sector performance:

REITs +36%

Bldg materials +29%

Metals/mining +17%

worst sector performance:

Banks -.5%

Chemicals +1.9%

Yankee banks +2.2%

There were 2 stories this morning that don't bode well for the recovery of government bailout money. The Washington Post writes that it's "sure to be a stretch" that the government is repaid by GM. The NY Times writes that at AIG there's "little hope for a recovery" for the government and other shareholders. Yet the banks are being hamstrung in their attempts to pay back their TARP money?

I missed this earlier article (and blog comment) about the positive impact of the PPIP program even though it never really came online. While I am reluctant to credit Soros with much prescience of late, this reminds me of his concept of reflexivity.

O.K....quick pop quiz....of all the countries in the world, which is most likely to be on the tape this morning defending private equity and hedge funds? Personally, I would not have started guessing socialist countries....but I would have been wrong. Here's the answer.