Tuesday, July 10, 2007

Junk-rated loans hit new lows

The price of junk-rated loans in the US and European markets has tumbled in the last two weeks as investors begin to turn away from the asset class, according to data from S&P LCD, the market information service. US leveraged loan prices have fallen to their lowest level in more than four years, while in the derivatives markets a sell-off has pushed prices of both US and European loan risk to less than the face value of the loans themselves. The implied rise in loan yields is likely to hit banks and private equity firms preparing to launch debt deals after recent buy-outs. Meanwhile, the Wall Street Journal reports that junk bond mutual funds posted their worst monthly performance since 2005.

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Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.