Leveraged Money Spurs Selloff as Record Treasuries Trade – Bloomberg 10-20-14

Salient to Investors:

  • Matt Maley at Miller Tabak said that when people sell liquid US equities stock market when they cannot sell their illiquid assets – the reason for last week’s sharp market sell-off.
  • The IMF said the proportion of corporate-debt securities held by mutual funds has doubled since 2007 to to 27 percent of global high-yield debt, while investors investors a record $62.9 billion last year into mutual funds that buy leveraged loans. The IMF warned that raised market and liquidity risks could compromise financial stability if left unaddressed.
  • The IMF expects the global economy to grow 3.8% in 2015.
  • Mark Connors at Credit Suisse said leverage among hedge funds that speculate on rising and falling security prices is near the highest in 5 years

Read the full article at http://www.bloomberg.com/news/2014-10-19/leveraged-money-spurs-selloff-as-record-treasuries-trade.html

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