Skip to main content

There have been all sorts of way to lose money on the coronavirus panic. Stocks, obviously, with the S&P 500 down 10% over the last six days, and some stocks—say, Tesla—doing even worse. Oil. Italian vacation plans. You name it. Obviously, at times like these—you know, when everything is perfectly contained and there’s nothing at all to worry about, just ask Mike Pence—people flock to bonds, with Treasuries hitting record low yields every day. Just hopefully not these bonds.

The idea behind pandemic bonds, issued by the World Bank in 2017, is simple: They pay investors a solid return, but if a pandemic breaks out, the principal is redirected to help low-income countries pay for their emergency response…. Pandemic bonds are most likely to be triggered just as equities tumble and concerns about companies’ ability to finance themselves come to the fore, as now. In short, the asset class is uncorrelated with wider markets—except at the exact moment when that matters most. Then it is suddenly very correlated.

The Painful Problem With Pandemic Bonds [WSJ]
U.S. Stocks Slide Into a Correction as Virus Fears Show No Sign of Easing [WSJ]
Pence Will Control All Coronavirus Messaging From Health Officials [NYT]



COVID-19 Kills Beautiful Dream Of Having Heavily-Indebted Company Borrow More To Buy Company Three Times Its Size

The shotgun wedding of HP and Xerox has, like all weddings right now, been called off.


Hedge Funds Catch A Serious Case Of Alpha

Can there be a pandemic every month


It’s Friday, Sell Everything Just In Case

That is, if you’re not already in voluntary quarantine in Westchester, in which case Rick Santelli thanks you.


Call the **Cough Cough** Close

Let’s play a pre-pandemic parlor game together, maybe for the last time.


One Stupid Trick For Avoiding Coronavirus Market Whiplash

Just, like, ignore everything until 3:30.


Europeans Retain Laser-Focus On Real Coronavirus Threat: Hedge Funds

New leverage restrictions should come online just in time for us to have forgotten about this whole pandemic thing.