bonds

Our take on the investing, financial, & economic themes of the day

The Wall Street Journal Touts Junk Bonds, as the ‘Smart Money’ Prepares for a Correction

5 September, 2014 by Matthew O'Brien, Ph.D. in Commentary
Howard Marks, a well-regarded student of financial markets, is the founder and chairman of Oaktree Capital, which has made heaps of cash by savvy investments in distressed debt.  (I’ve been gradually reading through his book, The Most Important Thing: Uncommon Sense for the Thoughtful ... read more...

The Beauty Pageant where the Contestants Pick & Pay their Judges: Rating Agencies are Ripe for Disruption

15 July, 2014 by Matthew O'Brien, Ph.D. in Commentary
This remarkable beauty pageant is also known as the bond market.  If a municipality or corporation wants to borrow by selling bonds, it needs to hire a ratings agency to evaluate the riskiness of its debt.  Since borrowers pick and pay their rating agency, there’s a massive conflict of ... read more...

There’s No Profit in Panic: Steering Clear of a Bond Liquidity Crisis

14 July, 2014 by Mark O'Brien in Commentary
Readers of the financial media have no doubt observed the number of articles about potential liquidity problems in the bond market, especially the corporate bond market, which has become bloated with new money and new investors in the wake of government zero-interest programs, like Quantitative ... read more...

Puerto Rico’s Long-term Debt: Some Statistics

Here are some more bracing statistics, via Randall Forsyth at Barron’s, about just how crazy Puerto Rico’s borrowing has been.  The island’s tax-free and relatively high yields have resulted in its debt comprising a wildly disproportionate share of the long-term municipal ... read more...

Puerto Rican Debt Crisis Heats Up Again: Judgment Day for Greedy Bond Fund Managers?

After the market close the other day Moody’s downgraded Puerto Rico’s municipal debt by three notches, lowering its estimation of the island’s bonds to junk status.  I wrote about the Puerto Rican debt crisis last year in December.  Puerto Rico’s risky municipal debt ... read more...