“It’s been a one-way street for a long time,” says Michael Kastner, principal at Halyard Asset Management. “This time last year it was a lot easier to buy investment grade bonds, but now rates are very low. You don’t need to see rates rise that much in order to erode a small coupon.”
“The Street has less appetite for bonds, and when ETFs need to sell, there is potential for an ugly reversal,” says Michael Kastner, a principal at Halyard Investment Management. “As rates move higher we will start to see investment managers sell lower-quality paper.”
“Investors are over-optimistic on earnings and we think the debt and fiscal issues could come back to bite the market hard,” said Michael Kastner, principal at Halyard Asset Management.
“The fiscal cliff does matter and markets should be worried,” says Michael Kastner, principal at Halyard Asset Management.
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MICHAEL KASTNER, PARTNER, HALYARD ASSET MANAGEMENT, WHITE PLAINS, NEW YORK
“I’m kind of surprised. It’s hard to figure out with what’s going on with Sandy. The market was looking for something very different. Overall it’s good to see. The payroll number is very encouraging. The bond players are not buying it though because the long end would have sold off more.”
Instant View: November nonfarm payrolls rose by 146,000
“We spend a lot of time worrying about the bond unwind,” says Michael Kastner, managing principal at Halyard Asset Management. “A lot of money has piled into the sector and will go in the opposite direction at some stage, they are clearly in bubble territory. Everyone in bonds has the same idea that they can get out before others when the market turns.”
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Michael Kastner, partner at Halyard Asset Management, says the real shock for ordinary investors will not register until they see their tax bills. “Initially, professional investors will sell dividend payers and after some calm people will see how much tax they need to pay and we will then see another round of selling.”
US investors fret over dividend tax (Login Required)