The Dow Jones Industrial Average fell more than 550 points as investors scrutinized the merits of a trade truce struck between the U.S. and China.
Is the equity-risk premium too tight for safety?
THE FIRST full-length film made by Steven Spielberg features an unusual lead. So indeed does much of his more celebrated work. But the star of “Duel”, his 1971 debut, is nothing as exotic as a man-eating shark or cloned velociraptor. It is a tailgating lorry. In a nerve-shredding journey across the California desert, it torments […]
CONTINGENT fees, in which clients pay lawyers only if a case is won, have long been a feature of America’s legal system. Many other countries used to bar them, wary of importing America’s ambulance-chasing culture. But a belated acceptance of their benefits means they are now widely allowed. “No-win, no-fee” arrangements help shift risks from […]
Enlarge (credit: State Historical Society of North Dakota) Bread, like wine, is pivotal in Judeo-Christian rituals. Both products exemplify the use of human ingenuity to re-create what nature provides, and the fermentation they both require must have seemed nothing less than magical to ancient minds. When toasted, rubbed with garlic and tomato, doused with olive […]
AS NAMES for market phenomena go, “inverted yield curve” lacks a certain punch. It is no “death cross” or “vomiting camel”. But what it lacks in panache, the inverted yield curve more than makes up for in predictive potency. Just before each of America’s most recent three recessions the yield curve for government bonds “inverted”, […]
Australia’s central bank has explained why everyone should be worried about a sudden rise in bond yields
Getty Images Australia’s central bank is concerned riskier assets such as stocks and high-yield corporate debt could be set for widespread losses if there is a sudden increase in government bond yields. The bank warns current asset valuations, which are reliant on global bond yields staying low, are “elevated relative to history.” In addition, it […]
The downtrend for the 10-year is at its end. Numerous indicators show we are in the midst of an economic transition. Yields could rise for a long time. Take a close look at the monthly chart of benchmark 10-year US Treasury yield (Fig. 1) for the period 1981-2018, a 37-year period. The dominant bear market […]
WHERE can you find a 7% interest rate on a sovereign dollar-bond? You would have to take a time-machine to the mid-1990s to find such a yield on a ten-year American Treasury. Alternatively, you could slip back a few days to August 2nd and bid for the $ 1bn of five-year bonds sold by the […]
Enlarge / It looks like science. (credit: Tri Alpha Energy) If there is one thing I hate, it’s optimization. Computers don’t actually understand what they are optimizing. And that creates problems for everything from bicycles to nuclear fusion. The process goes something like this: you have a mathematical model of a bicycle. You want your […]