{"id":6917,"date":"2015-03-28T07:42:22","date_gmt":"2015-03-28T12:42:22","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6917"},"modified":"2015-03-28T07:42:22","modified_gmt":"2015-03-28T12:42:22","slug":"central-banks-warn-liquidity-may-evaporate-when-investors-finally-remove-blindfolds","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6917","title":{"rendered":"Central Banks Warn: Liquidity May Evaporate When Investors Finally Remove Blindfolds"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/03\/27\/bond-market-liquidity-risk-central-bank-warnings\/\" target=\"_blank\">Central Banks Warn: Liquidity May Evaporate When Investors Finally Remove Blindfolds<\/a><\/h3>\n<p>Companies are selling bonds like madmen. This year through Tuesday, investment-grade and junk-rated companies have sold $438 billion in new bonds, up 14% from the prior record for this time of the year, set in 2013, according to Dealogic. This quarter is already in second place, nudging up against the all-time quarterly record of $455 billion of Q2 2014.<\/p>\n<p>About\u00a0$87 billion of these bonds\u00a0funded takeovers, a record for this time of the year, the\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/investors-scoop-up-companies-bonds-1427323163\">Wall Street Journal<\/a>\u00a0reported. The four biggest bond sales in that batch were for healthcare takeovers, including the Actavis deal whose $21 billion bond sale was the second largest in history, behind Verizon\u2019s $49 billion bond sale in 2013.<\/p>\n<p>Actavis had received orders for\u00a0<em>more than four<\/em>\u00a0times the bonds available, according to CFO Tessa Hilado. \u201cYou don\u2019t really know what the demand is until people start placing their orders,\u201d she said. \u201cI would say we were pleasantly surprised.\u201d<\/p>\n<p>Brandon Swensen, co-head of U.S. fixed income at RBC Global Asset Management, couldn\u2019t \u201csee anything on the radar that\u2019s going to slow things down materially,\u201d he told the Wall Street Journal. His firm expects rates to \u201cremain low.\u201d<\/p>\n<p>All of the investors chasing after these bonds expect rates to remain low. Or else they wouldn\u2019t chase after these bonds. If rates rise, as the Fed is promising in its convoluted cacophonous manner, these bonds that asset managers are devouring\u00a0at super-high prices and minuscule yields are going to be bad deals. And their bond funds are going to take a bath.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Central Banks Warn: Liquidity May Evaporate When Investors Finally Remove Blindfolds Companies are selling bonds like madmen. This year through Tuesday, investment-grade and junk-rated companies have sold $438 billion in new bonds, up 14% from the prior record for this time of the year, set in 2013, according to Dealogic. This quarter is already in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,124,3954,303,305,4086,487,860],"class_list":["post-6917","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-central-banks","tag-corporate-bonds","tag-fed","tag-federal-reserve","tag-investments","tag-liquidity","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6917","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6917"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6917\/revisions"}],"predecessor-version":[{"id":6918,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6917\/revisions\/6918"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}