bonds

The treasury yield curve remains quite steep by historical standards. Typically such steepness is driven by expectations of higher inflation in the future. But as discussed earlier, that is not the case in the US. Instead it is the…

US corporate credit is outperforming other forms of credit assets such as commercial real estate. A good way to see that outperformance vs. global risk assets is in the components of the Credit Suisse Risk Appetite Index. For the first time…

My view since the beginning of the financial crisis has been that policy levers to alleviate this private debt stress are limited, and that this limitation will be felt in defaults, writedowns and deleveraging of a magnitude that is larger…

This summer's growing fears of the Fed's impending policy change hit a number of fixed income sectors quite hard. While corporate credit was the best performer on a relative basis, it too was hit by some sell-off and a decline in liquidity.…

The higher demand for leveraged loans is helping to gradually increase leverage of buyout transactions. But a more alarming trend is the sharp relaxation of lending terms - the so-called "cov-lite" (covenant-light) deals. Over 70% of recent…

When the working age population grows faster than the broad population, demographics become a tailwind as far as economic growth is concerned. Hence, what is likely to become a significant headwind for advanced economies in terms of…

Newman: "in my own book the explanation starts the cycle with government spending, thus adding to the money supply, and then issuing treasuries for roughly equivalent amount. The bond vigilantes really have it backwards.

There is much about the US fiscal melodrama that is a farce. Unlike other debt crises, this one is totally self-inflicted. It is a crisis of choice not necessity. The misconstructions have been repeated so many times that they have taken on…

Summary: According to press accounts, the Senate could vote on a plan to end the government shutdown and avert a default on U.S. government debt as soon as tonight. Nonetheless, we are clearly in the 11th hour and must consider default a…

As the US government shutdown continues, the risk of default grows. Below are some thoughts on why this has played out as it has and what the outcome may be.