10th anniversary awards

On the 10th anniversary of the beginning of the Global Financial Crisis of 2008 (it began in 2007), we have a few awards to give.

The top prize for market efficiency goes to the Eurozone BB rated BofA Merrill Euro High Yield index whose yield is the same as that of the U.S. Treasury index of BofA-Merrill. [Link]. See chart below.

european high yield

Second prize goes to the Bank of Japan for becoming the market all by itself – both the buyer and the seller – in Japanese stocks and thereby enhancing the working of the market mechanism itself! [Link]

Third prize goes to the Swiss National Bank for becoming the buyer of first and last resort for FAANG stocks. 20% of its Reserves are held in U.S. stocks now! [Link]. From central planning of interest rates to public sector ownership of public markets!

Fourth place should go to investors themselves – who can still teach a trick or two to these central banks.

An $800 million subprime auto bond sale from Westlake Financial Services Inc. last week was priced at some of the highest valuations — as measured by the extra yield the notes offered compared with the benchmark rate — since 2014, the analysts wrote in a note Monday. The portion of the security rated BB, or two steps below investment grade, offered the least additional yield for a deal of its size and rating on record. Demand for the offering was strong enough to increase its size from a planned $700 million. [Link]

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