Sovereign Debt

Bonds that a government issues in a foreign currency are referred to as “sovereign debt.” Sovereign debt does not come with a specific charge on a government’s assets. It is simply a promise to pay. In reality, if a government does not pay its sovereign debt upon maturity, the loss of creditability is the biggest threat to the country—it will have a difficult time issuing sovereign debt again.


The Dow Jones Transportation Average is still very close to its all-time high, and so are countless component companies. The airlines, in particular, have been very strong in a classic bull market breakout performance. Many of these stocks have roughly…

Something big happened at the beginning of the year—Wall Street gave up on Washington. I’ve been trying to figure out how this incredible stock market action started at the beginning of the year. Things were trending fairly normally, and then…

“Opportunity cost”—it’s a phrase used in microeconomic theory to denote the costs that are forgone by not having your resources in the highest returning assets. It is a phrase that’s pertinent to the stock market. Without question, I remain completely…

A report from Standard & Poor’s (S&P), the credit rating agency, indicates there is more than a one-third chance that Japanese sovereign debt could face a downgrade. The report stated, “…the continuing prospect arises from risks associated with recent government…

When the U.S. equities market crashes, most foreign stocks do as well. But when it comes to capital appreciation, the correlation ends. Domestic Chinese stocks experienced a small resurgence lately, but they are still well down from their peak in…

There is a serious problem in the gold mining business these days, and it’s not because of the stagnant spot price. Costs are going up industry-wide, and it is making buying gold stocks much less attractive. Gold prices have been…

Over the years, I’ve seen a lot of wacky things in the stock market, from spectacular capital gains to equally spectacular wealth destruction (often from the same companies). Even the best companies on the stock market that offer rising dividends…

The breakdown in Apple Inc.’s (NASDAQ/AAPL) stock market price continues to be significant, and if the position drops to the $500.00-per-share level, it will represent a 29% drop from its recent all-time high on the stock market. It’s fair to…

The S&P 500 had a pretty good year in 2012, up approximately 11.5% not including dividends. But, as is the norm in the current stock market, trading action remained choppy without any real trend. The S&P 500 began 2012 strongly,…

If you’ve heard the old stock market adage “Sell in May, and go away,” you might consider 2012 as being the perfect year to represent this trend. The S&P 500 had a strong start to the year, appreciating to over…

There is now more evidence that companies with huge cash hoards are returning the money to shareholders, rather than making any bold new investments themselves. Last Friday, General Electric Company (NYSE/GE) announced that it would increase its quarterly dividend to…

Auto sales data just released for the month of November have caught my eye. Auto sales in the U.S. economy have increased to a level similar to the level in January 2008—15% in November 2012 from November of 2011. Car…