Word: bonding
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...course, it isn't just big guns like Gross who have the power to move markets and cause interest rates to spike. Many bond traders are like Brian Edmonds, head of Treasury-bond trading for Banc of America Securities. Blond, trim and a former Harvard lacrosse player, he sits at his desk all day interpreting economic data and trying to predict what the zig-zagging numbers might mean for the market. When claims for unemployment benefits ticked higher last Thursday, it suggested weakness in the economy. Investors promptly bid up bond prices. But Edmonds saw hidden strength in the news...
...create sustained moves as they constantly position their portfolios for the unknown. People planning on refinancing or buying a house would do well to listen to what Gross has to say. For one thing, he says the unprecedented interest-rate volatility seen of late is now a permanent bond-market reality because of the nation's mushrooming use of credit. As banks, pension funds, insurers and finance companies trade debt to manage their exposure to interest-rate risk, speculators are encouraged to jump in, heightening volatility...
There may be good news in all this. Much of the recent increase in interest rates has been technical--giant mortgage holders like Pimco, Fannie Mae, Freddie Mac, Chase and J.P. Morgan have been selling T-bonds in a complex strategy that helps to shield their vast mortgage holdings against risk. But despite signs of economic recovery, Gross believes bond yields will settle in at current levels--meaning mortgage rates will settle here as well. "We're done selling," Gross says. At least...
...stealth recovery that began almost two years ago has finally become evident with last quarter's surprisingly strong 2.4% GDP growth rate. It's also apparent in the panic prevailing in the gloom-loving bond pits on Wall Street, where traders have sent long-term interest rates soaring. With times getting better, you would think investing would be getting easier. But nothing looks cheap. Even after steep declines, many stocks remain expensive relative to earnings. Bonds are a death trap during periods of faster growth. Real estate never fell. Money-market yields barely cover a fund's expenses...
...event. In a decade of almost nonstop dealmaking since then, Weill has not only clawed his way back but last week was being hailed as the new king of Wall Street after Travelers sealed a $9 billion deal to acquire Salomon Bros., one of the world's largest bond-trading houses. Says Weill, 64, of his odyssey: 'I never thought it could be anything approaching this.' ... Weill stands apart from an industry where oversize egos often overwhelm logic. His latest deal caps years of collecting cast-off companies at fire-sale prices and then trimming costs by paying close attention...