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Talk of the debt ceiling and attempts to abolish it are troublesome since folks tend to not look at the bigger picture. The chart above shows the cost of servicing US Federal Debt ( red bars )1 compared with the benchmark, US 10 year interest rate ( black line )2 from 1988 to [...] I’ve written previously about the inflationary pressures that are entering the system but curiously the yield on Treasury Inflation Protected Securities or TIPS went negative two days ago. What’s it all mean? Well, TIPS return to investors a real, not nominal, amount. This amount changes as inflation changes, thus the attraction to investors who [...] There has been many stories about the “fiscal cliff” America faces in the fourth quarter, 2012. While I’m very familiar with all the details I didn’t think any story presented the challenge faced by the American bond markets too well so I created the chart above. It shows US Treasury debt by maturity, from [...] I’ve previously expressed my concerns about Quantitative Easing and The Fed’s holdings of US Treasuries but that isn’t complete picture. Before the credit crunch the Fed held about 800B of treasuries securities. In response to the recession kicked off by the credit crunch in November 2008 the Fed started purchasing Mortgage Backed Securities (MBS’), [...] The yield on the US Ten Year Treasury, 1962 to 2012 The chart above shows the yield on the Ten Year, US benchmark treasury security. This issue is tremendously important as it used as a reference for all consumer loans – mortgages, credit cards, whatever type of debt an American wishes to take on. [...] US 10 year note and US 30 year bond, yields over a twenty year period ending April 2012 The bond market can tell stories – but only if you listen. The chart above shows the yield on two US Government securities – the benchmark US Ten Year Treasury note ($UST10Y, red line) and the [...] US Treasuries held by The Feder Reserve and the US Money Supply, 2003 to 2012 Most folks believe that China is the single largest holder of US Treasuries. That’s not the case – as of September, 2011 China only held $1.1483 trillion of US Treasury securities. Who held the rest? The chart above [...] 2012 redemptions ($B)GDP ($B)10Y yield Japan3,0005,4580.98% U.S.2,78314,5861.93% Italy4282,0516.86% France3672,5603.30% Germany2853,2801.93% Canada2211,5773.90% Brazil1692,0874.20% U.K.1652,2482.02% China1215,9263.42% India571,7278.38% Russia131,4796.00% As we all know, most governments are heavy borrowers and almost all developed nations currently run large budget deficits, which means they spend far more than they generate from taxes. Alarmingly, in spite of the credit crunch and [...] With one week left in the trading year this might seem premature, but 2011 is one that is best forgotten. A brief look back: were you positioned properly? In 2011 gold was up 13%, US Treasuries (the benchmark 10Y) were up 8.24% and the US Dollar, benefiting far more from European worries than [...] The US 30Y Treasury opened at 121.95 on January 3rd 2011 and closed at 141.29 on December 9th 2011, for a YTD gain of 15.85%. The S&P 500 opened on January 3rd 2011 at 1271.87 and closed on December 9th at 1255.19, for a return of -1.31%. With roughly three weeks to go, short [...] |
I've worked in Investment Banking since the early 1980's, starting my career in New York with Dow Jones . I next moved to Deutsche Bank, where I spent the bulk of my career as Vice President of Global Risk Management. While at Moody's I was responsible for Professional Services in Europe, The Middle East and Africa, and was responsible globally for resources. While at ABN AMRO I was Global Programme Manager Risk Management Technology. Needless to say, I've seen Investment Banking and financial services from a wide variety of perspectives. I take a long view towards finance and economics. I believe past events - the study of economic history - can help us understand current market events. Internationally educated, I'm completing a PhD in Finance (Zurich), currently hold an MSc in Quantitative Finance (London), an MBA (London), studied Mathematics & Computer Science at the Undergraduate level (New York), and, most importantly, I've been a lifelong Student of the Markets. I currently write and sell market commentary to several banks and hedge funds, consult on Credit Risk to a Global Tier 1 Investment Bank, and teach finance at The University of Westminster in London. I'm a polished and effective public speaker, sometimes presenting on finance as many as six or eight times a week. I've also made several media appearances over the past two years, once again on the subject of finance. |
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