Bond Market

The bond market is the venue in which debt securities are traded prior to maturity. An investor in the bond market buys a debt instrument, which stems from what is essentially a loan to a corporation or government. In exchange for this money, the bond investor receives an interest rate. Debt instruments make interest payments at fixed intervals and for a fixed period of time; therefore, they are called fixed-income securities. The interest rate that the issuer pays is called a coupon. At maturity, the full amount of capital is returned to the investor. For investors in the bond market, two main criteria for buying a debt instrument is duration and credit quality. Duration for the bond market represents the length of the investment; credit quality refers to how strong the borrower is and how able they are to repay the full amount of debt.


Ultra low interest rates have inflated financial bubbles and could spark a stock market crash in 2016. At least, that’s the warning from former Fed chairman Alan Greenspan. In an interview on FOX Business Network’s The Intelligence Report with Trish…

Thanks to irrationality; gold prices have fallen to the levels not seen since 2010. As I see it, at the current price, the precious metal is presenting a great long-term opportunity. One of the biggest reasons investors should be paying…

While many commentators are focusing on Greece and China, the former Chairman of the Federal Reserve is warning that America’s bond market is at risk of collapsing. Speaking with Fox Business on Friday July 10th, Greenspan said, “What people are…

How safe is your retirement from a financial market collapse? While six years of booming asset prices have lulled investors into a sense of complacency, a hidden risk could spark a bond and stock market crash in 2015. At least,…

Over the past few weeks, U.S. bond prices have declined (close to a semi-crash), and their yields have skyrocketed. Don’t think because you are not directly invested in bonds that what’s going on in the bond market will not affect…

Over the past six years, the Federal Reserve has been the major driver of the bonds market, snapping up $3.5 trillion in bonds. Thanks to the Federal Reserve and a number of other factors, investors are getting nervous and selling.…

The verdict is in… Last week, at the end of its regularly scheduled meeting, the Federal Reserve said: 1)      It would continue to reduce the amount of money it creates each month. The Fed said it will be out of…

The bond market is in trouble. As we all know, the Federal Reserve has been the biggest driver of bonds since the financial crisis. The central bank lowered its benchmark interest rate to near zero, then started quantitative easing, all…

The strong jobs market report last week started the chatter again that the Federal Reserve would start to reduce the pace of its quantitative easing program. Some have said the Fed will reduce the amount of its asset purchases as…

The International Monetary Fund (IMF) expects the global economy to increase by 2.9% this year and 3.6% in 2014—forecasts which I believe are too optimistic. Why? First of all, we have the Japanese economy, the third-biggest in the global economy,…

Late last year, the concept of the “Great Rotation” became popular. The idea behind the Great Rotation was simple: the theory was that once the bond prices started to decline, investors would take their money out of bonds and put them…

Risks in the bond market continue to pile up quickly. Bond investors need to be very careful. They need to be very vigilant about their next step. June was the first month since August of 2011 that U.S. long-term bond…

The Federal Reserve has made it very clear that it wants to stop quantitative easing. But it has also made it just as clear that it won’t begin to taper its quantitative easing program until certain conditions are met. While…

The Chicago Board Options Exchange (CBOE) Market Volatility Index—better known as the “VIX” or even the “fear gauge”—sits just above 14. That means investors are continuing to ignore stock market risks and, in the process, are actually assuming even more…

Quantitative easing was supposed to bring economic growth to the U.S. economy, but it is failing at its job. Just look at the chart below to see how badly things have turned out. The chart shows the velocity of money…