Fixed Income Fixed

http://www.theglobeandmail.com/globe-investor/investment-ideas/a-radical-rethink-of-bonds/article14446547/ 

Mohamed A. El-Erian

This guy works for Bill Gross, the best bond market guru and manager.  Mohamed is brilliant and is interviewed on CNBC when important crises are afoot.


They don’t have six weeks,” said Mohamed A. El-Erian, chief executive of Pimco, the world’s largest bond manager. He said fear had reached the very core of the 17-nation group that uses the euro currency, with the price of insurance on German debt rising substantially this week.




“The light already is flashing yellow,” Mr. El-Erian said. “They can’t allow it to flash red. You have to give people a vision of what you want the euro zone to look like.”

Bond Funds Can Lose Money

"'A multiyear move of rising interest rates is an environment that most people haven't seen before,' said Tom Atteberry, co-manager of FPA New Income Fund.
The last time rates rose over several years was three decades ago. From June 1977, when the rate on 10-year Treasurys was 7.33%, rates climbed steadily, peaking at 15.32% in September 1981. And as rates rose, bond funds suffered.
Long-term bond funds were on average down 0.7% in 1977, lost 1.2% in both 1978 and 1979 and 3.9% in 1980, according to Morningstar. Each year's loss was relatively small, but the losing streak lasted for four years."

Canadian Public Pension Fund Makes 19% on Bond Portion of its Portfolio Yr End March 31, 2009

(c)2009 F. Bruce Abel

A good result that shows the value of diversification by having a fixed income balance. Fifth Third barely broke even on its bond portfolio for the same time period in the trust that I follow, largely, I believe, because it invested in Various Bond Funds which had toxic assets such as Fannie and Freddie preferreds, and perhaps had bad derivatives as well.
http://www.theglobeandmail.com/report-on-business/federal-pension-plan-books-227-loss/article1229050/

You will note that the comments and the gist of the article is that the Canadian pension fund managers did not deserve their large pay because the overall portfolio showed a loss of 22.7%. But I dispute that conclusion, as the bond portion did quite well.

Oh Oh to Mortgages

Vikram Saxena's article on the bond markets collapse yesterday:

http://seekingalpha.com/article/140047-the-bond-market-strikes-back-at-the-fed?source=feed

Thought-Provoking Argument re Bonds

http://www.indexuniverse.com/publications/journalofindexes/articles/149-may-june-2009/5710-bonds-why-bother.html

And another article with good charts of 10-yr and 30-yr treasuries:

http://unbiasedtrading.blogspot.com/2009/04/us-treasury-notes-and-bonds-ready-to.html

Six Top-Notch Bond Funds

http://online.barrons.com/article/SB123879899761688259.html

Good Post on Derivatives and Municipal Bonds

Wow!

http://www.nytimes.com/2009/02/17/business/17muni.html?pagewanted=all

Bond Funds

http://www.nytimes.com/2008/12/27/your-money/stocks-and-bonds/27money.html?8dpc