Tag: Reality

The High Yield Bond Market Has Never Been This Decoupled From Reality #small #business

#bond market news

#

The High Yield Bond Market Has Never Been This Decoupled From Reality

Recovery rates in 2016 are extremely low.. for high-yield bonds, the recovery rate YTD is 10.3% (10.5% senior secured and 0.5% senior subordinate), which is well below the 25-year annual average of 41.4%. Final recovery rates in 2015 for high-yield bonds were 25.2%, compared with recoveries of 48.1%, 52.7%, 53.2%, 48.6%, and 41.0% in full-years 2014, 2013, 2012, 2011, and 2010, respectively. Notably, average recoveries for Energy and Metals/Mining bonds were 18.3% and 20.0%, respectively, which weighed down overall high-yield recovery rates. Excluding the troubled commodity sectors, high-yield recoveries were a more respectable 46.1% (32.1% Ex-Energy only ). As for loans, recovery rates for first-lien loans thus far in 2016 are 24.5%, compared with their 18-year annual average of 67.2%. Final 2015 1st lien recoveries were 48.2%, while average recoveries for Energy and Metals/Mining 1st lien loans were 44.1% and 38.4%, respectively.

The record collapse in recovery rates is shown below.

It is not just JPM who points out what we first noticed in January: in an interview with Goldman s Allison Nathan, credit guru Edward Altman reiterates that same warning, although he focuses on the 2015 recovery rate which already is more than two times higher than that seen in 2016 defaults:

Allison Nathan: What is your view on recovery rates?

Edward Altman: Our approach to recovery rates is not centered on sectors. What we ve looked at carefully over 25 years is the correlation between default rates and recovery rates. As you would expect, when the former rise to high or above-average levels, you always observe the latter dropping to below-average levels. This strong inverse relationship is as much a function of supply and demand as it is of company fundamentals. So if we are expecting a higher default rate in 2016 and even 2017, then we would expect a lower recovery rate. Already in 2015, the recovery rate dropped dramatically relative to 2014 even though the default rate was below average; we saw a 33-34% recovery rate versus the historical average of 45%, measured as the price just after default. This is primarily due to the heavy concentration of energy companies whose recovery rates depend on their ability to liquidate their assets at reasonable prices, which in turn depends on the price of oil. Low oil prices have pushed recovery rates in the energy sector below 25% and even into the single digits for some companies. And that s going to continue. So this year I expect recovery rates much below average, producing a double-whammy of high default rates and low recovery rates for credit investors.

Since then recovery rates have dropped even further. BUT high-yield bond prices have surged on the back of ECB, BOE buying and the knock-on effects of $200 billion per month of experimentation by the world s central-planners.

Simply put, the revelation of a default event exposes the vast gap between real asset values (upon liquidation or bankruptcy) and the artificially supported prices seen in bond markets .

In the 30 year life of the so-called junk bond market, the chasm between reality and central-planner-created markets has never been wider.


Tags : , , , , , , , , , , ,

The High Yield Bond Market Has Never Been This Decoupled From Reality #small #business

#bond market news

#

The High Yield Bond Market Has Never Been This Decoupled From Reality

Recovery rates in 2016 are extremely low.. for high-yield bonds, the recovery rate YTD is 10.3% (10.5% senior secured and 0.5% senior subordinate), which is well below the 25-year annual average of 41.4%. Final recovery rates in 2015 for high-yield bonds were 25.2%, compared with recoveries of 48.1%, 52.7%, 53.2%, 48.6%, and 41.0% in full-years 2014, 2013, 2012, 2011, and 2010, respectively. Notably, average recoveries for Energy and Metals/Mining bonds were 18.3% and 20.0%, respectively, which weighed down overall high-yield recovery rates. Excluding the troubled commodity sectors, high-yield recoveries were a more respectable 46.1% (32.1% Ex-Energy only ). As for loans, recovery rates for first-lien loans thus far in 2016 are 24.5%, compared with their 18-year annual average of 67.2%. Final 2015 1st lien recoveries were 48.2%, while average recoveries for Energy and Metals/Mining 1st lien loans were 44.1% and 38.4%, respectively.

The record collapse in recovery rates is shown below.

It is not just JPM who points out what we first noticed in January: in an interview with Goldman s Allison Nathan, credit guru Edward Altman reiterates that same warning, although he focuses on the 2015 recovery rate which already is more than two times higher than that seen in 2016 defaults:

Allison Nathan: What is your view on recovery rates?

Edward Altman: Our approach to recovery rates is not centered on sectors. What we ve looked at carefully over 25 years is the correlation between default rates and recovery rates. As you would expect, when the former rise to high or above-average levels, you always observe the latter dropping to below-average levels. This strong inverse relationship is as much a function of supply and demand as it is of company fundamentals. So if we are expecting a higher default rate in 2016 and even 2017, then we would expect a lower recovery rate. Already in 2015, the recovery rate dropped dramatically relative to 2014 even though the default rate was below average; we saw a 33-34% recovery rate versus the historical average of 45%, measured as the price just after default. This is primarily due to the heavy concentration of energy companies whose recovery rates depend on their ability to liquidate their assets at reasonable prices, which in turn depends on the price of oil. Low oil prices have pushed recovery rates in the energy sector below 25% and even into the single digits for some companies. And that s going to continue. So this year I expect recovery rates much below average, producing a double-whammy of high default rates and low recovery rates for credit investors.

Since then recovery rates have dropped even further. BUT high-yield bond prices have surged on the back of ECB, BOE buying and the knock-on effects of $200 billion per month of experimentation by the world s central-planners.

Simply put, the revelation of a default event exposes the vast gap between real asset values (upon liquidation or bankruptcy) and the artificially supported prices seen in bond markets .

In the 30 year life of the so-called junk bond market, the chasm between reality and central-planner-created markets has never been wider.


Tags : , , , , , , , , , , ,

SixthSense – a wearable gestural interface (MIT Media Lab) #sixth #sense, #mit #media #lab,

#

‘SixthSense’ is a wearable gestural interface that augments the physical world around us with digital information and lets us use natural hand gestures to interact with that information.

We’ve evolved over millions of years to sense the world around us. When we encounter something, someone or some place, we use our five natural senses to perceive information about it; that information helps us make decisions and chose the right actions to take. But arguably the most useful information that can help us make the right decision is not naturally perceivable with our five senses, namely the data, information and knowledge that mankind has accumulated about everything and which is increasingly all available online. Although the miniaturization of computing devices allows us to carry computers in our pockets, keeping us continually connected to the digital world, there is no link between our digital devices and our interactions with the physical world. Information is confined traditionally on paper or digitally on a screen. SixthSense bridges this gap, bringing intangible, digital information out into the tangible world, and allowing us to interact with this information via natural hand gestures. ‘SixthSense’ frees information from its confines by seamlessly integrating it with reality, and thus making the entire world your computer.

The SixthSense prototype is comprised of a pocket projector, a mirror and a camera. The hardware components are coupled in a pendant like mobile wearable device. Both the projector and the camera are connected to the mobile computing device in the user’s pocket. The projector projects visual information enabling surfaces, walls and physical objects around us to be used as interfaces; while the camera recognizes and tracks user’s hand gestures and physical objects using computer-vision based techniques. The software program processes the video stream data captured by the camera and tracks the locations of the colored markers (visual tracking fiducials) at the tip of the user’s fingers using simple computer-vision techniques. The movements and arrangements of these fiducials are interpreted into gestures that act as interaction instructions for the projected application interfaces. The maximum number of tracked fingers is only constrained by the number of unique fiducials, thus SixthSense also supports multi-touch and multi-user interaction.

The current prototype system costs approximate $350 to build. Instructions on how to make your own prototype device can be found here (coming soon).

some more pictures are coming soon.

. more videos are coming soon, too.

  • P. Mistry, P. Maes. SixthSense – A Wearable Gestural Interface. In the Proceedings of SIGGRAPH Asia 2009, Sketch. Yokohama, Japan. 2009
  • P. Mistry, P. Maes. SixthSense – A Wearable Gestural Interface. In the Proceedings of SIGGRAPH Asia 2009, Emerging Technologies. Yokohama, Japan. 2009
  • P. Mistry. The thrilling potential of SixthSense technology. TEDIndia 2009. Mysore, India 2009
  • P. Mistry, P. Maes, L. Chang. WUW – Wear Ur World – A Wearable Gestural Interface. In the CHI ’09 extended abstracts on Human factors in computing systems. Boston, USA. 2009
  • P. Maes, P. Mistry. Unveiling the “Sixth Sense,” game-changing wearable tech. TED 2009. Long Beach, CA, USA 2009


Tags : , , , , , , , , , , , , , , , , , , , , ,

The High Yield Bond Market Has Never Been This Decoupled From Reality #personal #business

#bond market news

#

The High Yield Bond Market Has Never Been This Decoupled From Reality

Recovery rates in 2016 are extremely low.. for high-yield bonds, the recovery rate YTD is 10.3% (10.5% senior secured and 0.5% senior subordinate), which is well below the 25-year annual average of 41.4%. Final recovery rates in 2015 for high-yield bonds were 25.2%, compared with recoveries of 48.1%, 52.7%, 53.2%, 48.6%, and 41.0% in full-years 2014, 2013, 2012, 2011, and 2010, respectively. Notably, average recoveries for Energy and Metals/Mining bonds were 18.3% and 20.0%, respectively, which weighed down overall high-yield recovery rates. Excluding the troubled commodity sectors, high-yield recoveries were a more respectable 46.1% (32.1% Ex-Energy only ). As for loans, recovery rates for first-lien loans thus far in 2016 are 24.5%, compared with their 18-year annual average of 67.2%. Final 2015 1st lien recoveries were 48.2%, while average recoveries for Energy and Metals/Mining 1st lien loans were 44.1% and 38.4%, respectively.

The record collapse in recovery rates is shown below.

It is not just JPM who points out what we first noticed in January: in an interview with Goldman s Allison Nathan, credit guru Edward Altman reiterates that same warning, although he focuses on the 2015 recovery rate which already is more than two times higher than that seen in 2016 defaults:

Allison Nathan: What is your view on recovery rates?

Edward Altman: Our approach to recovery rates is not centered on sectors. What we ve looked at carefully over 25 years is the correlation between default rates and recovery rates. As you would expect, when the former rise to high or above-average levels, you always observe the latter dropping to below-average levels. This strong inverse relationship is as much a function of supply and demand as it is of company fundamentals. So if we are expecting a higher default rate in 2016 and even 2017, then we would expect a lower recovery rate. Already in 2015, the recovery rate dropped dramatically relative to 2014 even though the default rate was below average; we saw a 33-34% recovery rate versus the historical average of 45%, measured as the price just after default. This is primarily due to the heavy concentration of energy companies whose recovery rates depend on their ability to liquidate their assets at reasonable prices, which in turn depends on the price of oil. Low oil prices have pushed recovery rates in the energy sector below 25% and even into the single digits for some companies. And that s going to continue. So this year I expect recovery rates much below average, producing a double-whammy of high default rates and low recovery rates for credit investors.

Since then recovery rates have dropped even further. BUT high-yield bond prices have surged on the back of ECB, BOE buying and the knock-on effects of $200 billion per month of experimentation by the world s central-planners.

Simply put, the revelation of a default event exposes the vast gap between real asset values (upon liquidation or bankruptcy) and the artificially supported prices seen in bond markets .

In the 30 year life of the so-called junk bond market, the chasm between reality and central-planner-created markets has never been wider.


Tags : , , , , , , , , , , ,

The High Yield Bond Market Has Never Been This Decoupled From Reality #business #reports


#bond market news

#

The High Yield Bond Market Has Never Been This Decoupled From Reality

Recovery rates in 2016 are extremely low.. for high-yield bonds, the recovery rate YTD is 10.3% (10.5% senior secured and 0.5% senior subordinate), which is well below the 25-year annual average of 41.4%. Final recovery rates in 2015 for high-yield bonds were 25.2%, compared with recoveries of 48.1%, 52.7%, 53.2%, 48.6%, and 41.0% in full-years 2014, 2013, 2012, 2011, and 2010, respectively. Notably, average recoveries for Energy and Metals/Mining bonds were 18.3% and 20.0%, respectively, which weighed down overall high-yield recovery rates. Excluding the troubled commodity sectors, high-yield recoveries were a more respectable 46.1% (32.1% Ex-Energy only ). As for loans, recovery rates for first-lien loans thus far in 2016 are 24.5%, compared with their 18-year annual average of 67.2%. Final 2015 1st lien recoveries were 48.2%, while average recoveries for Energy and Metals/Mining 1st lien loans were 44.1% and 38.4%, respectively.

The record collapse in recovery rates is shown below.

It is not just JPM who points out what we first noticed in January: in an interview with Goldman s Allison Nathan, credit guru Edward Altman reiterates that same warning, although he focuses on the 2015 recovery rate which already is more than two times higher than that seen in 2016 defaults:

Allison Nathan: What is your view on recovery rates?

Edward Altman: Our approach to recovery rates is not centered on sectors. What we ve looked at carefully over 25 years is the correlation between default rates and recovery rates. As you would expect, when the former rise to high or above-average levels, you always observe the latter dropping to below-average levels. This strong inverse relationship is as much a function of supply and demand as it is of company fundamentals. So if we are expecting a higher default rate in 2016 and even 2017, then we would expect a lower recovery rate. Already in 2015, the recovery rate dropped dramatically relative to 2014 even though the default rate was below average; we saw a 33-34% recovery rate versus the historical average of 45%, measured as the price just after default. This is primarily due to the heavy concentration of energy companies whose recovery rates depend on their ability to liquidate their assets at reasonable prices, which in turn depends on the price of oil. Low oil prices have pushed recovery rates in the energy sector below 25% and even into the single digits for some companies. And that s going to continue. So this year I expect recovery rates much below average, producing a double-whammy of high default rates and low recovery rates for credit investors.

Since then recovery rates have dropped even further. BUT high-yield bond prices have surged on the back of ECB, BOE buying and the knock-on effects of $200 billion per month of experimentation by the world s central-planners.

Simply put, the revelation of a default event exposes the vast gap between real asset values (upon liquidation or bankruptcy) and the artificially supported prices seen in bond markets .

In the 30 year life of the so-called junk bond market, the chasm between reality and central-planner-created markets has never been wider.


Tags : , , , , , , , , , , ,