Apparently the Chinese market selloff has gotten so bad that pension fund managers are now prohibited from selling any shares. It’s unclear what the punishment is for transgression, but over there, you don’t want to take any chances.

Of course, we have our own equivalent here, even though the penalty for violation is not quite as severe. It’s called the investment-grade mandate. How else do you account for a rule that forces assets to prices that can’t be supported by fundamentals or common sense?

Anyway, the Chinese selloff, combined with a research piece advising the short sale of American-listed Chinese buyout candidates, has a number of issuers of HOCS 20 bonds under pressure this morning. This isn’t reflected, of course, in the HOCS performance tallies discussed herein, but it may lead to some interesting comparisons between the standard HOCS 20 and the China-free version next week.

As far as activities on the other side of the world go, the biggest effect on our world from the Greek fallout may be a slowdown in issuance thanks to a modest flight to quality in all its forms. Thinking bigger, of course, the US’ relative lack of Greek exposure may lure assets here, and a few of them may find their way into convertible mandates—hopefully not investment-grade ones.

Speaking of things American, the biggest news of last week may have been the announcement that Triple Crown winner American Pharoah will next race August 2nd at Monmouth Park on the Jersey shore. Tickets for the event are soaring like...well....like investment-grade convertibles.

(This is the cover letter for the subscription-based weekly Hillside's Hybrid Vigor newsletter. For a complete copy, please contact John Anderson at + 1 (646) 712-9289 x 107).