European bond markets sold off sharply on Tuesday. The selling started in the UK following the announcement of a general election to be held May 6. Ten-year notes ticked up 6bp to 3.983%.

Greek bonds weakened. The 10-year note rose 23bp to 6.772%. There is a new controversy brewing concerning Greek bond rates. Most of the European Union nations agree to let Greece issue bonds in the 4% range. Germany, however, is playing hard ball and wants Greece to pay up to more than 6%. The Germans say that Greece must pay for its excesses.

Continue reading Bond Markets Sell of in Europe, Pushing Yields Higher

Bond Markets Sell of in Europe, Pushing Yields Higher originally appeared on BloggingStocks on Tue, 06 Apr 2010 12:40:00 EST. Please see our terms for use of feeds.

There's bad news and good news regarding Bill Gross's latest assessment of global credit markets.

The bad news is that Gross, who heads the world's largest mutual fund at PIMCO, said government bailouts point to a global "unicredit" bond market in which sovereign debt rates mirror those for corporations, Bloomberg News reported Monday.

Continue reading PIMCO's Gross Sees Sovereign Debts Rates Approaching Corporate Rates

PIMCO's Gross Sees Sovereign Debts Rates Approaching Corporate Rates originally appeared on BloggingStocks on Mon, 01 Mar 2010 17:00:00 EST. Please see our terms for use of feeds.

First of all what is sovereign debt? Sovereign debt is created by the issuance of bonds by a country's government. When the financial meltdown occurred last year, governments around the world issued bonds to obtain money for their respective stimulus programs. The amount of debt (bonds) issued worldwide has been astronomical.

Now, investors around the world are worried that some countries are in danger of their bond markets collapsing or, worse case scenario, for the country to default on its bonds.

Continue reading New Investor Alert on Sovereign Debt

New Investor Alert on Sovereign Debt originally appeared on BloggingStocks on Sat, 02 Jan 2010 16:10:00 EST. Please see our terms for use of feeds.

The catastrophe bond market is still running strong. This alternative to reinsurance, in which insurers can package up their risk and sell it to investors, may be a small part of the market, but carriers are clearly committing to it.

Swiss Re (SWCEY) and Scor (SCRYY) both have launched cat bonds, for $150 million and $75 million, respectively. This brings the fourth quarter issuance total to $840 million and the 2009 year-to-date tally to just over $2.6 billion, based on information from Artemis.bm and Guy Carpenter's GC Capital Ideas.

Continue reading Trading on disaster: Two new cat bonds come to market

Trading on disaster: Two new cat bonds come to market originally appeared on BloggingStocks on Thu, 03 Dec 2009 13:00:00 EST. Please see our terms for use of feeds.

It was, of course, the late U.S. Senator Everett Dirksen, R-Illinois, who said, "A billion here, a billion there, and pretty soon you're talking about real money."

Well, given globalization and the passage of time, maybe we should amend that to 'a $100 billion here, a $100 billion there'.

The U.S. Treasury's $700 billion bail-out intended to stabilize the financial markets could take an already high U.S. Government budget deficit to truly astronomical -- and some say unsupportable -- levels.

The deficit, which the Congressional Budget Office in its most recent forecast (pdf) said will total $407 billion in Fiscal 2008 and $438 billion in Fiscal 2009, could exceed $1 trillion next year, if U.S. Treasury Secretary Henry Paulson's plan is passed as outlined, says economist Richard Felson.

In additional, the national debt -- the deficit accumulated over the decades -- would rise above $11 trillion.

"The calculation is based on a majority of distressed assets being recorded in the next year, and Congress probably will authorize the U.S. Treasury to do that," Felson said. "If the asset purchases are spread out, next year's deficit would be about $750 billion or $800 billion, but these are still enormous sums, effectively doubling the budget deficit."

Continue reading Will the U.S. budget deficit exceed $1 trillion next year?

Will the U.S. budget deficit exceed $1 trillion next year? originally appeared on BloggingStocks on Tue, 23 Sep 2008 13:40:00 EST. Please see our terms for use of feeds.

Continue reading Economists surveyed say risk of 2008 U.S. recession is increasing

Economists surveyed say risk of 2008 U.S. recession is increasing originally appeared on BloggingStocks on Mon, 25 Feb 2008 10:10:00 EST. Please see our terms for use of feeds.

Continue reading Fed to offer special TAF auctions for 'as long as necessary'

Fed to offer special TAF auctions for 'as long as necessary' originally appeared on BloggingStocks on Fri, 21 Dec 2007 15:25:00 EST. Please see our terms for use of feeds.