Unstoppable $100 Trillion Bond Market Renders Models Useless (Jun 2014)

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Source: Bloomberg – Unstoppable $100 Trillion Bond Market Renders Models Useless

Notable excerpts:

If the insatiable demand for bonds has upended the models you use to value them, you’re not alone.

Just last month, researchers at the Federal Reserve Bank of New York retooled a gauge of relative yields on Treasuries, casting aside three decades of data that incorporated estimates for market rates from professional forecasters. Priya Misra, the head of U.S. rates strategy at Bank of America Corp., says a risk metric she’s relied on hasn’t worked since March.

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Treasury Yields Reach Two-Year High on Outlook for Fed Tapering (Jan 2014)

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Source: Bloomberg – Treasury Yields Reach Two-Year High on Outlook for Fed Tapering

Notable excerpts:

Treasury 10-year yields reached the highest level in more than two years on speculation the U.S. economy will improve enough for the Federal Reserve to end bond purchases in 2014.

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First China Default Seen as Record $427 Billion Debt Due (Dec 2013)

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Source: Bloomberg – First China Default Seen as Record $427 Billion Debt Due

Notable excerpts:

Chinese company debt twice the size of Ireland’s economy will come due in 2014, spurring concern the nation is on the cusp of its first corporate bond default.

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Bond Losses of $1 Trillion if Yields Spike, BIS Says (Jun 2013)

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Source: CNBC – Bond Losses of $1 Trillion if Yields Spike, BIS Says

Notable excerpts:

Bondholders in the United States alone would lose more than $1 trillion if yields leap, showing how urgent it is for governments to put their finances in order, the Bank for International Settlements said on Sunday.

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Blackstone: We’re in an ‘epic credit bubble’ (Sep 2013)

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Source: Yahoo! Finance – Blackstone: We’re in an ‘epic credit bubble’

Notable excerpts:

One of the world’s largest investment firms believes the financial system is overly leveraged.

We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven’t seen in my career in private equity,” Joseph Baratta, The Blackstone Group’s global head of private equity, said Thursday night at the Dow Jones Private Equity Analyst Conference in New York City. “The cost of a high yield bond on an absolute coupon basis is as low as it’s ever been.”

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