Not exact matches
Their declining currencies
against the dollar (8 - 9 percent over the past 12 months), falling stock market
values since the beginning of the year and high (India) and rising (Brazil)
bond yields are reflecting their funding difficulties.
Pomerantz represents Banco Safra SA, one of the largest banks in Brazil, in a class action
against Samarco Mineracao SA, relating to the loss in
value to the company's
bonds triggered by the Fundão dam - burst disaster.
UNTIL last Thursday, when leaders outlined their latest plan, Mr. Trichet had long argued
against a severe reduction in the
value of Greece's
bonds.
By storing its surplus export revenues in Treasury
bonds, South Korea nudges up the relative
value of the dollar
against our competitors» currencies, and our trade deficit increases, even though the original transaction had nothing to do with the United States.
If the Dollar broke lower, its likely too that
bonds and duration would rally; defensives (staples, utes, reits) and growth (tech / biotech / discret) squeeze
against crowded
value unwinding (fins, energy, indus); yen and euro would squeeze mightily; gold squeezes while copper pukes in a favorite commodities «pair» unwind; HY could reverse weaker vs IG (currently everybody long CCC vs BB on the high beta trade)... this would be the theoretical path to our next pain - trade or even VaR shock.
For
bonds to defend
against declining equity
values, where do
bond yields need to fall?
If you own stocks,
bonds or mutual funds, you can borrow up to 80 percent
against the
value of your portfolio without having to sell.
The
bonds, being a more stable investment, allow you to earn a bit of money on your investment while safeguarding you
against rapid swings in
value.
In other words, you can take out a margin loan
against your portfolio's
value and deduct the interest if you buy stocks — but you can't deduct the interest if you use the money to buy municipal
bonds or a new car.
This is because you have to discount the
value of your
bond to compete
against newer
bonds that pay a higher interest rate than your
bond.
The interest payments and the
bond's face
value are protected
against inflation.
One way to analyze the relative
value of inflation - linked
bonds versus nominal
bonds is to compare the implied break - evens priced between the two
against near - term inflation expectations.
For
bonds to defend
against declining equity
values, where do
bond yields need to fall?
You may take a hit if the currency the
bond is issued in loses
value against the Canadian dollar.
Bonds mostly have finite maturities; time can work
against the short seller as the
bond gets closer to maturity, because the
bond will mature at par, and he will have to pay the par
value.
The risk for
bond investors that the issuer will default on its obligation (default risk) or that the
bond value will decline and / or that the
bond price performance will compare unfavorably to other
bonds against which the investment is compared due either to perceived increase in the risk that an issuer will default (credit spread risk) or that a company's credit rating will be lowered (downgrade risk).
The asset swap spread is one widely used metric to determine relative
value of one
bond against other
bonds of the same currency.
How does that instruct us in how to
value stock and
bonds of the same company
against each other?
Investment of cash in gold is also specifically a hedge
against currency inflation; paper money, account balances, and even debt instruments like
bonds and CDs can lose real
value over time in a «hot» economy where there's more money than things to buy with it.
When interest rates increase, the
value of
bonds decrease because the fixed coupon payment is less attractive
against higher - yielding investments.
In fact, when arguing
against breed discrimination, heartwarming stories about pets or even the human - animal
bond usually carry little, if any, persuasive
value.
We are working hard to end breed discrimination and
value the human - canine
bond so deeply, for us to discriminate would go
against what we stand for!