{"id":9265,"date":"2015-06-20T06:54:35","date_gmt":"2015-06-20T11:54:35","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9265"},"modified":"2015-06-20T06:54:35","modified_gmt":"2015-06-20T11:54:35","slug":"wave-of-defaults-bankruptcies-spook-bond-investors","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9265","title":{"rendered":"Wave of Defaults, Bankruptcies Spook Bond Investors"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/06\/19\/wave-of-defaults-bankruptcies-spook-bond-investors\/\" target=\"_blank\">Wave of Defaults, Bankruptcies Spook Bond Investors<\/a><\/h3>\n<p>First things first: Investor desperation for yield, any discernible yield no matter what the risks, and blind confidence that all this will work out somehow are waning.<\/p>\n<p>Now questions pop up here and there, and investors are beginning to open their eyes just a tad amid waves of defaults and bankruptcies, after years of worriless fixed-income bliss during which cheap new money made investors forgive and forget all sins of the past. But now investors are pulling big chunks of money out.<\/p>\n<p>For the week ended June 17, investors yanked \u201ca whopping\u201d $2.9 billion out of junk bond funds, according to S&amp;P Capital IQ\/ LCD\u2019s\u00a0<a href=\"http:\/\/www.highyieldbond.com\/high-yield-funds-see-another-huge-investor-cash-outflow-2-9b\/\"><u>HighYieldBond.com<\/u><\/a>, on top of the $2.6 billion they\u2019d yanked out in the prior week. Those redemptions dragged down the year-to-date inflows to $3.6 billion, nearly 40% below last year at this time. But $201.5 billion remain in those funds.<\/p>\n<p>Leverage-loan funds have been plagued by outflows as investors have been warned for a couple of years about their risks. Banks extend high-risk loans to over-indebted, junk-rated companies but don\u2019t want to keep these iffy\u00a0loans on their books. So they sell them to loan funds or repackage them into CLOs and then sell them. Even the Fed has gotten concerned. This week brought more of the same, with $311 million leaving leveraged-loan funds, bringing year-to-date outflows to $3.6 billion. Total fund assets are now down to $94 billion.<\/p>\n<p>On the investment-grade side, it didn\u2019t look pretty either.\u00a0<a href=\"http:\/\/www.businessinsider.com\/bond-weekly-outflows-largest-since-taper-tantrum-2015-6\"><u>Business Insider<\/u><\/a>\u00a0cited Bank of America Merrill Lynch strategists: \u201cHigh grade credit funds suffered their biggest outflow this year, and double the previous week.\u201d The biggest outflows since the Taper Tantrum in June 2013. There was more doom and gloom:<\/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>Wave of Defaults, Bankruptcies Spook Bond Investors First things first: Investor desperation for yield, any discernible yield no matter what the risks, and blind confidence that all this will work out somehow are waning. Now questions pop up here and there, and investors are beginning to open their eyes just a tad amid waves of [&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":[1361,63,88,200,4086,481,4254,4255],"class_list":["post-9265","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bankruptcy","tag-banks","tag-bonds","tag-default","tag-investments","tag-leverage","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9265","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=9265"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9265\/revisions"}],"predecessor-version":[{"id":9266,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9265\/revisions\/9266"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9265"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9265"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9265"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}