Although the fundamental picture remains healthy for most U.S. High Yield issuers and defaults are expected to be low, the reversal of a crowded trade could lead to further substantial losses on these bonds.

We believe the sell-off in Munis is overdone in the short-term and these bonds look attractive relative to Treasuries. But in the medium-term the tapering risk will linger; this is a big negative for long maturity credits like Munis.

The longer term demand for safe spreads is likely to remain strong once yields normalize and volatility recedes.

The RAI rose again in June and stays on a “High Risk” signal. June saw an acute case of carry trade reversal; we remain cautious and recommend higher quality within fixed income.

For the first half of the year, QE tapering disrupted the usual patterns for most interest rate related markets but equities are largely on track. In the second half, the common message seems to be higher volatility and lower returns.

We think 3% is the upper bound in the short term. However, we believe it will settle back closer to 250 bps by the end of the year.

A quick test of intelligence. Don’t Cheat! Because if you do, the test will be no fun. The are no tricks to the test. Read this sentence:

Now count aloud the F’s in the sentence. It is important you count them ONLY ONCE. Do not go back and count them again. (Answer after the fold.)

A man takes his wife to a disco. There’s a guy on the dance floor giving it large - break dancing, moon walking, back flips, the works....

People often accuse me of “stealing others’ jokes,” and being “a plagiarist.” Their words not mine…

“Hell Is Other People” is an experimental Web app that utilizes FourSquare to track check-ins made by friends to determine the best possible routes and areas to avoid them.

Would you like to know what America’s young people are actually learning while they are away at college? It isn’t pretty.

“Hippopotomonstrosesquippedaliophobia” is actually the fear of long words.

A Google Education

Sequential growth rates are all down this earnings season, but Large Caps are weathering the storm better than their Small Cap counterparts.

Q1 relative to Q4 growth rates deteriorated across all capitalization tiers indicating a broad based top-line slowdown. Mega Caps have shown the lowest rate of revenue growth at –0.9%.

Best Performing Industry Groups: Restaurants, Precious Metals, Health Care Technology, Apparel Retail, and Automotive Retail

Most noteworthy this week was a combined estimated $13.5 billion exiting bond mutual funds and ETFs on a net basis.

Commodity producers seem to believe that last decade’s commodity boom is set to repeat. This belief itself probably ensures that it won’t.

We’ve frequently mentioned the two-faced nature of thematic leadership during the current bull market. Filtering out the minor swings, Phase One lasted from March 2009 through February 2011 and was dominated by low quality, high beta and cyclical stocks.

The new debate over the QE “taper” erupted at the same time that a long-reliable Fed-tracking tool is telling us it’s time to ease.