Articles
Selected category: Bonds
How to Profit If Treasury Yields Shoot Up and Bond Vigilantes Attack Mounting US Debt
Nouriel Roubini was right about the credit crisis when he called it in 2006 but wrong about the vigorous recovery in markets following the crash. Now, the man known as Dr. Doom for his grim predictions, says that bond vigilantes may come... Read →
Stong 10-Year Treasury Auction Quells Rate Fears - For Now
Today's strong auction of 10-year Treasury Notes quelled fears that rates may push higher in the future. For now, the 10-year seems contained below 4%. The strong bid to cover ratio shows that Uncle Sam has no problem borrowing money at... Read →
Image Image courtesy of Stuart Miles at FreeDigitalPhotos.net
TIPS - Treasury Inflation-Protected Securities - How to Know When to Invest
Does it make sense to buy TIPS? What is the TIPS yield telling us about the economy and future inflation expectations? Why buy a TIPS versus a regular Treasury security?
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Death Bonds, Latest Investment Rage
Just when you thought you had seen the last elegant, complex, and high-risk investment vehicle (I am thinking of all the sub prime machinations), now we have death bonds on the market. These derive from pay-up-front offerings to people... Read →It is a given that we are in a serious recession. It is a given too that a number of municipalities will fail as the recession deepens and tax revenues decline. Those with capital preservation high on their list of priorities, will see the writing on the wall and reduce if not eliminate their exposure to municipal bonds before it is too late.
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How to Buy New Municipal Bond Issues
Investors who want to buy new issues of municipal bonds can do so through a process called the Retail Order Period. In the Retail Order Period, municipalities set aside a portion of their bond offering for retail consumers and... Read →The global bond markets have come under increasing pressure recently, amid growing calls for investors to short bonds. Is this a foolproof trade?
Read →As we close 2008, one of the biggest stories of the year, the auction rate security meltdown, comes full circle. Pimco, a company roundly criticized for not redeeming investor money locked in illiquid auction rate preferred shares, has now delayed the divided payments from two bonds funds because of auction rate security cash. Talk about irony.
Read →Interest in pre-refunded municipal bonds is at the highest level since the early 1990s. For investors, pre-refunded munis offer the opportunity to earn a high return backed by Treasury Bonds.
Read →The stimulus plan making its way through Congress contains some provisions that may aid the municipal bond market.
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Image Image courtesy of Stuart Miles at FreeDigitalPhotos.net
Auction Rate Securities
Update - July 16, 2008 - While many auction rate security instruments have been retired, returning principal to investors, these instruments are now viewed as highly inappropriate for non-institutional investors. The ARS market has experienced severe difficulty, making front-page news on the Wall Street Journal. Many investors have been unable to liquidate their positions, and yields are highly volatile. Until the market sees greater stabilization and transparency, we recommend staying away from Auction Rate Securities.
Read →Recent data shows that investors are piling into the tax-free yields and relative safety of municipal bonds.
Read →California last week raised $5 billion dollars to avert a cash crunch stemming from the credit meltdown. The most interesting thing about it is they skipped the big investment banks and went directly to their consumers.
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