Bond bombshell

Article Abstract:

Government bond markets have been affected by volatility, and long bond yields have dropped, affecting other bond markets. The purchase of long bonds by the US Treasury is seen as the cause, and previously the Treasury had bought back short term debt. Long bonds are needed by pension funds, so there was a rush to acquire an asset that appeared to be disappearing. The spread of mortgage backed securities, and usage of long bonds by investment banks for hedging operations may also have affected yields.

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Out of debt

Article Abstract:

Rich countries are developing budget surpluses, except for Japan, where the deficit is increasing. A budget deficit means that some of the national debt can be paid off, and this reduces the amount needed to service debts, and so lessens the burden on taxpayers. Elimination of this debt is not necessarily a useful goal, and problems arise such as how pension funds can used government securities, if a great effort is made to reduce debt. Financial markets can also be distorted when there is a reduction int he supply of government binds.

National debt, Public debts

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From bail-out to bail-in

Article Abstract:

Attitudes are changing toward finance for emerging markets, while there are rumors of defaults by a number of borrowers. Sovereign bond defaults have tended not to occur since 1945, and bonds were only a small part of finance for emerging markets, with syndicated bank loans more important in the 1980s. Bonds have since become a major source of private credit, and richer countries want bond holders to take part in restructurings. One proposal is to include clauses which would allow bonds to be restructured more easily.

Finance, Developing countries, External debts

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