Markets News 

Why Investors Can’t Get Enough of Tajikistan’s Debt

“More than any other global investment bank, J. P. Morgan has a special power when it comes to emerging market bonds” writes Landon Thomas Jr for nytimes.com. Last year, developing nations issued a record $133 billion in debt, according to Bond Radar, a data gathering outfit.And it was not that long ago that Greece, even with its towering debt load, was an investor favorite.The I.M.F. warned last week that this rush to snap up the debt of financially fragile countries could end badly.Investors, especially exchange-traded funds, buy or sell bonds…

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Markets News Regulators 

Bonds rally, euro weakens amid ECB taper talk: What’s going on?

“This is why bond yields are falling in the euro area this morning (by 2-3bps) across the board for [European government bonds]” writes Sunny Oh for marketwatch.com. In previous instances where the ECB has hinted at tapering its purchases, market participants saw a strong surge in the euro and a selloff in European bonds.The euro, meanwhile, faced selling pressure, although that was alleviated later by the dollar’s knee-jerk depreciation in response to weaker-than-expected U.S. inflation data.Read: Here’s why the rising euro is defying Mario Draghi and the ECB The plan,…

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Markets News 

FORGET BITCOIN: An $8 trillion bubble in global markets is waiting to pop

“For all the hype about bitcoin, far more investors are exposed to an $8 trillion bubble in financial markets” writes Akin Oyedele for businessinsider.com. But the Fed will have a role to play in reducing the share of government bonds that yield negative.Investors bought these bonds for their perceived safety and because some institutions like banks were required to.Investors, however, aren’t counting on rising inflation, judging by the magnitude of their investments in negative-yielding bonds.All this demand raised the bonds’ prices, pushing their yields below zero in Japan and in…

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Markets News 

China is binging on dollar-denominated debt

“In total, emerging market governments and companies have issued $US509 billion in dollar-denominated bonds so far this year, a new record” writes Wolf Richter for businessinsider.com.au. Investors around the globe are eager to hand China their US dollars, in exchange for a somewhat higher yield.Other emerging market governments and companies have jumped on the same dollar-bandwagon.China announced today that it would sell $US2 billion in government bonds denominated in US dollars. Source: businessinsider.com.au Share This:

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Markets News Stocks 

Why can’t you spend at a 7% rate in retirement?

“While those bonds can help address the volatility risks of stocks, bonds generally bring with them a lower overall expected rate of return” reports foxbusiness.com. Why 4% is a more reasonable spending rate A long-held rule of thumb in retirement planning is something known as the 4% rule.A reader of this recent article asked why he couldn’t project a 7% spending rate for his retirement account, given that his investments have been returning north of 12% for several years.Spending at a rate that may look feasible in a raging bull market…

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Markets News Stocks 

High Quality Corporate Bond Spreads Fall to Lowest in Decade

“Investors continue to shovel money into corporate bonds, squeezing the yield earned over Treasury bonds to fresh multi-year lows” writes Chris Dieterich for wsj.com. The voracious buying of corporate bond funds has coincided with the latest risk-on rally for U.S. stocks, as investors judge the U.S. economy to be sturdy and corporate health to be sound. Source: wsj.com Share This:

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Puerto Rico bonds plunge after Trump pledge to wipe out debt

“Puerto Rican bonds took a huge hit on Wednesday following President Donald Trump’s comments on the island’s massive debt” writes unknown author for cnbc.com. The island’s general obligation bonds, which yield 8 percent, dropped to just 36 cents on the dollar.On Tuesday night, he told Fox News that Puerto Rico’s debt will have to be wiped out. Source: cnbc.com Share This:

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Hedge fund manager some call the next Warren Buffett owns nearly $1 billion of Puerto Rico’s bonds

“Klarman’s hedge fund, Baupost, owns $911 million of the island’s bonds through Decagon Holdings entities, according to a July public court filing” writes Daniel Acker for cnbc.com. The hedge fund manager has largely avoided controversy over his career and is often compared to Buffett for his disciplined investing philosophy and solid returns.Cate Long, founder of Puerto Rico Clearinghouse, told CNBC in an email retail investors own about 75 percent of the island’s debt.COFINA stands for the Puerto Rico Sales Tax Financing Corp. that issues bonds. Source: cnbc.com Share This:

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Puerto Rico benchmark bond drops to record low after Trump remark

“The bond due in July 2035, the island’s most recent benchmark debt issue, dropped by 12 cents to 32 cents on the dollar early on Wednesday” reports foxbusiness.com. Puerto Rico in May filed a form of bankruptcy under the federal 2016 rescue law known as PROMESA. The island’s capital structure has 18 public agencies owing a combined $120 billion in bond and pension debt. Source: foxbusiness.com Share This:

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Markets News 

Puerto Rico bonds collapse after Trump says its debt needs to be wiped out

“A benchmark Puerto Rico bond fell to record lows Wednesday after President Donald Trump suggested that the US territory’s debt may have to be written off” writes Finanzen Net Gmbh for businessinsider.com. The bond’s price had already been falling since Hurricane Maria ravaged the island and destroyed much of its infrastructure.Puerto Rico’s recovery is complicated by the fact that before the hurricane, it had about $70 billion in debt that it said it could not repay. Source: businessinsider.com Share This:

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