Recently sharing and discussing on the economic growth and the debt market yield spread impact recalled me some work I did in the past and its worth sharing,
The abstract was based on the evidence that yield spread can serve as a leading indicator of economic activity.It’s important to understand few basic concepts before moving forward:
YIELD SPREAD: The difference between yield of long-term debt and short-term debt instrument is known as yield spread. Higher the difference between instruments greater will be the yield spread.
For example, if the 05-year Treasury bond is at 3% and the 20-year Treasury bond is at 4%, the yield spread between the two debt instruments is 1% (4% – 3%). Continue reading “Economic Growth and Yield Spreads on Debt paper – Back to School”
Who could have seen this coming? Has Argentina turned defaulting into an art-form ?
So the Argentina’s second default this century is finally done. Referring to Bloomberg, by defaulting today, Argentina may trigger bondholders claims of as much as $29 billion — equal to all its foreign-currency reserves. Just remember that the last 2 days have seen ‘smart money’ buy Argentine bonds and stocks to all-time record highs.
Some more information from Bloomberg :
If the overdue interest on Argentina’s dollar-denominated securities due 2033 isn’t paid by July 30, provisions in bond indentures known as cross-default clauses would allow the nation’s other debt holders to also demand their money back immediately. The amount corresponds to Argentina’s debt issued in foreign currencies and governed by international laws. Continue reading “Argentina Defaults”
Here are some honest predictions for 2014 🙂
|Sensex 30,000 or 10,000
||WTF are you asking me for?
|10 Year Bond
||Could not fathom a guess
|Fed Fund Rates
||Haven’t a clue
|US Housing Market
||That’s a really good question
||Not a clue
||Yes, we will probably have a GDP
|Growth in China
|European Sovereign Debt
||Hmmm, interesting . . .
|2014 Election outcome
||HTF should I know?
|Abenomics & Japan
|Possibility of Recession in 2014
||Possibility & Probability are 2 different things