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To: rllee who wrote (70100)	12/15/2008 4:07:06 PM
From: Dale Baker	Read Replies (1) \| Respond to of 118717

The "safest" way to buy corporate HY bonds is HYG, a bond index ETF with no leverage and a wide spread of underlying securities: "The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the U.S. dollar high yield corporate bond market as defined by the iBoxx $ Liquid High Yield Index. The Fund generally invests at least 90 percent of its assets in component securities of its Underlying Index. The Fund may invest up to 20 percent of its assets in certain futures, options and swap contracts, cash and cash equivalents, including money market funds." It currently yields 13%.

To: rllee who wrote (70100)	12/15/2008 4:17:46 PM
From: KyrosL	Read Replies (2) \| Respond to of 118717

Mispricing depends on your assumptions for the future. Corporates and munis are certainly mispriced versus equities. Equities are priced for a severe recession. Corporate bonds are priced for a depression of the order of the 1930s. High yields are priced for even worse than that. Municipals are priced outside of historical experience. IMO, the best time to buy would be sometime in the next couple of weeks when last minute tax loss selling hits particularly bond CEFs, which are bought mostly by retail investors. I think in terms of risk adjusted returns the best buys right now are municipal CEFs. They are bargains because of the drop in their NAVs, and additionally because they sell at historic discounts to their NAVs. The risk is low because the US government demonstrated in no uncertain terms that it is willing to bailout entities key to economic revival. Municipalities will be the key beneficiaries of the coming huge infrastructure spending and I am sure will be propped up in many other ways to halt the spread of unemployment to government. Stephanie Pomboy, who expects the government to soon guarantee munis, observed in a Barron's interview this week that buying municipals is a way to get long socialism, which is a good bet nowadays.