Aladdin Capital Research Monitor®, June 1, 2009

U.S Corporate Bond Market

Both U.S. equity and bond markets want to price in an economic recovery.  There is a steady push in the financial media for the “green shoots’ argument, that recovery is actually starting, with a rising tide to lift the boats in the second half of the year and into 2010.  This has been accompanied by a steady grinding-in of the IG12 from over the 230 bps in March to a little under 150 bps at the end of May.  Accompanying this spread-tightening exercise has been a substantial wave of corporate issuance, which looks set to continue through June and maybe into July.  Is recovery around the corner?  more

The Life and Times of the Dollar

When North Korea opted to launch three short-range missiles off its eastern coast in May, following a nuclear test, the value of the U.S. dollar rallied. The “safe harbor” status of the dollar was suddenly renewed, following an earlier downturn in its value that has sparked a debate as to whether it will be supplanted by the euro, yen and renminbi or some combination thereof.  more

U.S. Banks - Getting Better, But...

There is good news and bad news regarding U.S. banks.  The good news is that the drama of a major bank failure is probably over.  The stress tests and the ensuing capital markets road trip by most of the 19 major banks with over $100 billion of assets under management indicates that jump-to-default risk has diminished.  The combination of TARP recapitalization, help through providing FDIC guarantees for bank issuance, and other measures have brought a degree of stabilization to the major banks.  more