Daily Commentary

Welcome to new issue Monday. So far, 9 new issues have been announced this morning and more are expected. For details, type NIM3 on your Bloomberg. Spreads are so far resilient in the face of this supply holding largely unchanged. As I've said before, demand exceeds even heavy (daily) supply such as this. Take a look at this JPMorgan graph showing net supply YTD:

In other news, everyone's favorite uncle from Omaha, Warren Buffett, continues to buy corporate bonds as cited here.

Bloomberg news notes that corporations are hoarding more cash than ever before; largely at the expense of stock buybacks.

I first started mentioning concerns about commercial real estate back in February. It has now elevated to Fed chairman Bernanke list of concerns as something he is paying "close attention" to; perhaps signaling a bottom?

The potentially very lucrative business of clearing credit default swaps has attracted many strong competitors. This article highlights that ICE has taken the initial lead over CME/Citadel and Eurex. Hopefully we won't have a BluRay vs HD DVD type battle here.

Return readers will know that the Vix has recently become a cause of concern for me. This article is perhaps a bit more dire with the title "Vix Signals S&P Swoon".

This blog post had me a bit perplexed this morning; it maintains that sub bank spreads are trading better than senior spreads. All the actual individual spreads I am seeing live do not bear this out.