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  • "For the first time since Word War II, owning U.S. Treasuries is a riskier bet than owning German bonds."

    May 14, 2008 / 10:25am / in Americas, Asia, Europe, Fixed Income, General, International Investing

    From The Daily Reckoning. This headline was the most important thing I read today. The follow with:

    On the basis of credit default swaps, which are used to speculate on a government’s ability to repay debt, the 10-year note reached a record high of 16 basis points on March 12. German bonds traded at 15 basis points, also a record. A decline in these spreads shows improving confidence in the government’s ability to increase shows the opposite.

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  • Super Senior CDO Debt and the Banks That Loved It

    Apr 21, 2008 / 8:38am / in Americas, Europe, Fixed Income, General, International Investing

    This clearly written FT article discusses why banks loved this tranche of CDO debt and why it is now such an issue:

    Sometimes they did this simply to keep the CDO machine running. But there was another, far more important, incentive: regulatory arbitrage.

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  • Muni Bond Woes

    Apr 15, 2008 / 8:49am / in Americas, Fixed Income, General, International Investing

    In the equities market one crisis is usually replaced by another in short order, so that only the really big issues are discussed years later. For instance, the Bear Stearns collapse is already a footnote.

    Not so, in the municipal bond market, which still talks about the 15 year-old Orange county default, and who, collectively, will never forget the Heartland Fund write down.

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  • Stat of the Day: Why you can't count on rebate checks to help anything

    Feb 25, 2008 / 10:41am / in Americas, Fixed Income, General, International Investing

    This is from the always entertaining Daily Reckoning. Writing under the pseudonym The Mogambo Guru, the analyst points out that:

    The interesting thing is that Treasury Gross Public Debt is now $9.244 trillion, up from $5.65 trillion in the middle of 2001, when the current government-borrowing binge started going bananas, suddenly rising at a steady $50 billion per month or so.

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  • The Reason Behind the ARS Failures

    Feb 21, 2008 / 11:23am / in Fixed Income, General, International Investing

    With all the talk about the auction failures this is the first article that discussed the accounting changes that caused it. The market was a zombie for months, only propped up by the banks. When they pulled out the whole market ground to a halt:

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  • The Consequences of the Auction Rate Failure

    Feb 15, 2008 / 11:20am / in Americas, Fixed Income, General, International Investing

    Sometimes the best part of an online article isn't the article itself, but the comments it generated. Below is an excerpt from a post about the failed auctions. While it's important to take any thing an anonymous message board poster writes with a grain of salt, this poster seems well informed:

    I was on our bank's hoot yesterday (and garnered a little more information today), so here are some important notes:

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  • The Unraveling of the Muni Market

    Feb 13, 2008 / 7:38am / in Americas, Fixed Income, General, International Investing

    With bond insurance meaningless and credit markets frozen what will it take to induce investors to buy? In the case of the Port Authority of NY: 20%.

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  • Chinese Treasury Purchases - A Disturbing Trend

    Jan 18, 2008 / 10:35am / in Asia, Fixed Income, General, International Investing

    Gartman crunches the numbers and finds that China's purchases of new treasuries fell off a cliff in 2007:

    Chinese Net Purchases of Treasuries in billions of dollars

    2002 34.1
    2003 47.9
    2004 77.4
    2005 84.9
    2006 63.2
    2007 -4.1
    Chinese Purchases As A Percentage of New Treasuries Issued
    2002 12.7%
    2003 11.8
    2004 21.3
    2005 29.6
    2006 35.8
    2007 - 2.5 (through Sept. 30th)

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  • MBIA Downward Spiral Continues

    Jan 16, 2008 / 10:17am / in Americas, Fixed Income, General, International Investing

    Down 12% today and 80% so far this year. More pain to come:

    The AA rated debt fell as low as 88.5 cents on the dollar today, according to bond traders. That's the equivalent of a yield of 18 percent, data compiled by Bloomberg show. The notes were trading at 97.5 cents yesterday, according to Bloomberg data.

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  • Do you trust the market or the credit ratings?

    Jan 11, 2008 / 10:48am / in Fixed Income, General, International Investing

    MBIA the worlds largest bond insurer has to offer a 14% yield to move its bonds although they are a AA rated company. The market values the firm at much less than double-A. The downward spiral has begun for this firm. Bloomberg has the details:

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