The municipal bond market has been in a state of turmoil since the fall fo 2008. It started with the short-term auction rate preferred muni’s, then companies insuring municipal bonds went into bankruptcy (late 2008 and early 2009) and finally the credit quality of municipalities themselves came into question (late 2009). Starting in late 2010, individual investors [...]
Here are two conflicting facts: 1) the value of the US dollar, relative to other currencies, rests on disturbing fundamentals, and 2) the role of the US dollar, as a means of transaction and unit of account for international trade, is stable. Predicting short-to-intermediate-term future currency movements is fraught with uncertainty. Currencies are valued based on their [...]
Currently, the major international financial institutions, central banks and their respective governments look at aggregated data for “stress” points, either in the global economic or capital market systems. Aggregated data examples would be: foreign trade flows, capital flows, foreign asset holdings and asset price changes, banking and securities links, and exchange market pressures. However, aggregated data cannot pick-up [...]
On July 21, 2005, the Bank of China removed the renminbi peg to the US dollar and would manage it against a basket of currencies (nobody knows the percentage allocations of these currencies). The Bank of China stated that the renminbi exchange rate would be “flexible” against market supply and demand. Since then, the renminbi has appreciated, [...]
When investing in non-US dollar denominated bonds, there are two basic options: developed debt or emerging market debt. Generally only Europe, Canada, Japan, Singapore, Australia and New Zealand have a robust corporate bond market (there are exceptions, of course). Investing in non-US bonds, therefore, from a US perspective, generally focuses on sovereign debt (debt of a foreign government). In 2009 [...]
