Hints and tips:
...Then there are the banks....
...Macro types simply love to chat about the prospect of central banks running out of money....
...As the global financial crisis reminded us, banks and non-banks alike are pretty exposed to house price falls — even if they happen on the other side of the world....
...The government’s solution to this reserve glut has been to issue close to 40 per cent of GDP in non-marketable debt to the central bank....
...Local government workers, MPs, and those working for the Bank of England see their monthly pension contributions invested in assets like equities, bonds and infrastructure....
...Putting all this wisdom into a handy 2x2 matrix format, the Central Bank of Malta summarises the price sensitivity of conventional (aka nominal) and inflation-linked bonds to moves in yields and breakevens...
...The overarching market story of the past year has been the rise and fall of expectations around central bank interest rates....
...If you wanted to buy twenty-year bonds issued by the likes of the World Bank or the European Investment Bank around the turn of the millennium, you would have been able to pick them up at a spread over gilts...
...The second Bank of the United States had lost its charter, and federal deposits had been transferred to state banks....
...Assets are priced in reference to one another, and central bank policy that delivered extraordinarily low after-inflation bond yields could explain why investors might rationally pay more for stocks....
...While change of control covenants might very well be part of the standard boilerplate template that legal firms and banks start with when putting together a new issue, not every bond will have one....
...The bank failed in a financial panic in 1837. Despite the inclusion of such epic fails, the new historical record still favours equities, but less so....
...Years of political turmoil, large deficits, an unstable currency and a central bank struggling to re-anchor inflation expectations further reduce room for manoeuvre....
...First, the Fed’s staff recommended that the central bank buy defaulted Treasuries as part of their (then ongoing) QE: . . . unless otherwise directed by the Committee, the Desk intends to accept defaulted...
Hitting the history books for comparisons
...Sadly, pensions nerds don’t get invited to fancy central bank retreats. So no-one was there to point out that this (r-g) thing misses the state’s biggest contractual financial liabilities....
...Fixed income markets forced a change in government, despite — although some still argue because of — an emergency intervention by the Bank of England....
...If Toby’s note whets your appetite, the full note is available outside the GS paywall....
...From across the pond the very notion that a bank might fail can invoke panic. But as well as an unreasonable numbers of banks, the US has seriously enviable expertise in bank resolution....
...Source: Bank of England, FRED Unfortunately, unlike equity indices, currency indices don’t mean much to people....
...Back then, the UK mortgage market still overwhelmingly consisted of variable rate mortgages tied at the hip to changes in Bank Rate....
...British Patient Capital — a subsidiary of the state-owned British Business Bank — reports that while deal sizes are comparable for US and UK start-ups in their first round of funding, by the fifth and sixth...
...As a consequence, the central bank looks likely to raise rates higher than previously thought and keep them higher for longer....
...Toby Nangle (Opinion, November 28) asserts that mandating an increase to minimum employer pension contributions “would be disinflationary”. This is not obvious to me....
...As a reminder, let’s recycle a (slightly dusty) chart from Toby’s piece last June on how the long-term composition of mortgages has shifted: Comparing the actual share of variable-rate mortgages with the...
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