The problem is that his fund, and most other CLOs, have covenants in their offering documents that prevent them from buying debt at less than 85 cents on the dollar. That covenant is a good thing in normal markets, as it prevents possible mischief by the manager, but right now it means that a lot of opportunity is being missed.”

COME ON. if those mortgages are such a “good buy” at $80, he should be picking out some of the better and paying his “floor” price of $85 for them….. yet he’s not. There’s no offer side sitting pat at $80 for these CLOs day-in day-out — it’s price discovery every day, depending on who’s looking to both buy and to sell. If there’s TRULY “nothing wrong”, he’d be loading up at $85.

I’d be careful with the evident opportunity in high yield bonds — I lost a ton back in 1990 with similar thinking (that was a previous period of corporate deleveraging, driven by the bust in the lbo boom).

The world’s bankers want Helicopter Ben up on that wall. They NEED him on that wall.