The heyday is upon us for PTY and PCN... the credit crisis is easing, government programs have been put in place to ease the housing crisis, the FED continues to inflate the money supply and buy back US government bonds even if it is not completely what is needed, and economic indicators and investor sentiment are pointing in the right direction and we all wait for the economy and the jobless rate to show the type of improvement desired to say that indeed we are in recovery mode.

Hindsight is always 20/20 and the calamity the US has faced is no exception. There's no way that Lehman or Bear Stearns should have been allowed to fail or go away respectively because this set up the need for the huge gov't bailout/stimulus programs to fill the void created. But now that all that has been done and financial systemic calamity has been averted where are we now?

Waiting... we are waiting for the impact of not just the US stimulus program to take hold but China, India, and European stimulus programs as well. The delay in the economic impact of the US stimulus has cost this country untold billions in not being more immediate as has the other government programs and the FEDs unwillingness to act even more decisively as was needed. But his is 20/20 hindsight for all told we will get to grandma's house after all dear children. We just took the scenic more costly route is all.

Conclusion: The high yield rally has got a later start than one might expect due to increased credit risk in the banking sector, additional, credit risks associated with a commercial real estate and further residential real estate weakness. However, because financial systemic risk has been averted by the FED action and the economic risks have been mitigated by the government stimulus, investment grade and high yield junk bonds represent tremendous investment value and closed-end funds like PTY and PCN that are well managed should continue to perform well. The junk bond default risk is subsiding by the day if not minute... and the investment world is taking notice and will continue to do so.