Corporate Bonds
ʘ ʘ ʘ Updated november 2, 2011
Our Opinion: Less dangerous than Treasuries but still a SELL | |
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Corporate bonds in Gold...A DISASTER !!!! |
Corporate bonds Short Candle October 10 | Chart comments |
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Magicians at work: SELL! |
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Long candle October 10 | ||
Posted June 8, 2009 - Or how to buy Bonds for security and end up with 75 cent penny stocks!!
May 31 (Bloomberg) -- A majority of General Motors bondholders agreed to support a plan to exchange their debt for an ownership stake in the company as high as 25 percent, the New York Times reported, citing people familiar with the matter.
Investors holding a little more than 50 percent of GM’s $27.2 billion of debt agreed to the swap, removing the last roadblock for General Motors to file for bankruptcy protection tomorrow, the paper said.
Bondholders will initially get a 10 percent stake in the company, with warrants for an additional 15 percent, the paper said. GM scheduled a news conference tomorrow in New York, where it’s expected to make its bankruptcy filing, the Times reported.
General Motors stock fell to 75 cents on May 29, below the $1 minimum normally needed to trade on the New York Stock Exchange, and the lowest level in 76 years.
Updated May 12, 2009 - Corporate Bond Woes: Spreads And fundamentals Anticipate The Most Severe High-Yield Default Wave on Record.
Currently, high yield bond spreads anticipate a default rate of 21% in the U.S. Specifically, record bond spreads are not only due to fire sales but find some justification in the deterioration of credit quality down the rating scale. Similarly, the spike in the projected default rate is in line with the deterioration of credit quality of outstanding debt down the rating scale (Moody’s)
Corporate Bonds show a completely different and negative image.
Through the mechanism of Credit Default Swaps any (low) rated corporate bond could be elevated to a AAA level. One only had to buy an insurance. Today the price of this insurance premium is increasingly becoming prohibitive and Financial Institutions which offered these Swaps (AIG) have disappeared.
There is a huge discrepancy between the general price level of Government and Corporate bonds.
Authorities both in the USA and Europe have moved in the market and are buying Corporate Bonds in order to avoid a crash would unfold.