It has been a while since we talked about QE, but we covered this substantially in the past (see for example ‘Sub Zero?’, ‘QE – quite extraordinary‘ and ‘Quantitative easing – walking on custard‘). It now appears, at least for the time being, to be a part of monetary history in the UK, and more recently the US. However, it is being reapplied in Japan and about to do a grand tour of Europe. Our…Read the article
Oscar Wilde supposedly once said that ‘everything popular is wrong’. Well, the overwhelming consensus at the start of 2014 that bond markets were not a great place to be invested turned out to be very wrong indeed. The relentless march lower in bond yields, and thus strong performance from government bonds and investment grade (for example, sterling IG has returned more than 10% so far this yea…Read the article
It has become customary in recent years for January to begin with strategists making dire predictions for bond markets. And yet 2014 has, like its immediate predecessors, conspired to confound the vast majority of these expectations. While equity markets have delivered decent returns in the main this year, the predicted bond market rout has failed to materialise.Read Panoramic Outlook
Here is the 8th annual Christmas Quiz. 20 questions, and the closing date for entries is midday on Tuesday 23rd December. Please email your answers to us at email@example.com. The winner will get to choose a charity to which we will donate £200. He or she will also get a copy of “Anger is an Energy”, John Lydon’s new autobiography. Four runners up will also get a copy of the book. Good…Read the article
I was in Hong Kong a couple of weeks ago to find out more about the Chinese corporate bond market. To start with it’s huge, and growing rapidly. But it comes with some well-known challenges – the large weighting towards property debt, the lack of information about issuers (ratings tend to be done only by the domestic ratings agency), and perhaps most worryingly the issue of structural subordina…Read the article
It has finally happened: the DMO has elected to call and refinance the 3 ½% War Loan, which at almost £2bn in size is by far the largest perpetual gilt outstanding. We’ve been banging on about this for years (see comment from 2011 here), and Jim is worried he hasn’t got anything to write about anymore. Jim typed up a few thoughts after the much smaller 4% Consol was called in October, here are …Read the article
Last week, Sky’s Ed Conway came in to talk about his brilliant book “The Summit”, the story behind the Bretton Woods conference that tried to organise the structure of the global economy in the aftermath of the Second World War, and enshrined the dominance of the US dollar as the world’s currency.
The conference took place as the war was still raging, both in Europe in the weeks after D-Day, a…Read the article
There is a lot of debate surrounding the future of China’s economy. There are the pessimists, who will cite the inevitable collapse of a debt-powered housing bubble. There are others that say these concerns are overblown and that despite slowing, China is still the world’s second largest economy and its growth rate is far superior than anything seen in the developed world.
From time to time we…Read the article
Emerging market (“EM”) corporate bonds are a fast-growing segment of the fixed income market. The hard-currency (USD, EUR, GBP and CHF) EM bond market has doubled in size since 2010 and is now worth over $1.3 trillion – which makes it as big as the US high-yield market. Including local-currency bonds, the Bank of International Settlements estimated that the EM corporate bond market was worth ne…Read the article
One of the many unintended consequences of structurally low interest rates over the past few years has been the emergence of mini-bonds in the UK. These are typically non-tradable debt instruments issued by companies directly to individual investors*. We’ve commented before on one such bond issued by Chilango, a London based vendor of Mexican food, and highlighted some of the risks relative to …Read the article