Seven Centuries of Government Bond Yields. Bryan Taylor, Ph.D., Chief Economist, GFD
|
|
- Amberlynn Clark
- 8 years ago
- Views:
Transcription
1 Seven Centuries of Government Bond Yields Bryan Taylor, Ph.D., Chief Economist, GFD Global Financial Data has put together an index of government bond yields stretching back seven centuries. This index uses government bond yields from the leading economic powers of each century to measure the long-term changes in government bond yields. The Changing Center of Financial Power Over the past eight centuries, the locus of economic power has gradually shifted from Italy to Spain to the Netherlands to Great Britain and currently to the United States. The country at the center of the world s power and economy issues bonds to cover expenses. Investors in that country and abroad purchase the bonds because they represent the safest bonds that are available for investment. The country at the center of economic power can issue more bonds at a lower cost because of the lower risk of the world s economic center. Over time, power ebbs away from that country and investors begin placing their money in the bonds of the new world economic power. Italy was the center of the western economic world until the 1500s. Until then, the Mediterranean was the gateway to Byzantium, the Middle East, and through those countries, to India and China. The Italian city-states of Venice, Genoa, Florence and others grew from this trade, but also fought wars against each other requiring funds for those wars. By the 1600s, the nexus of economic power had shifted to the Netherlands as trade in the Atlantic and with northern Europe enabled the Dutch to strengthen their role in the global economy. The surplus of capital in the Netherlands is illustrated by the fact that Tulipmania, the world s first bubble, which occurred in the Netherlands in the 1630s. The Netherlands was too small to maintain its role as the center of the global economy for long, and the combination of trade, and commercial and industrial revolutions moved the center of economic power to Great Britain at the end of the 1600s. The Glorious Revolution of 1688 realigned political power in England and put Britain on a sound economic footing that enabled it to remain the center of world economic and political power until After World War I, the center of economic power clearly shifted from London to New York and today, New York remains the center of the global economy. The Dollar is the world s reserve currency, a fact that enables Washington to issue bonds at a lower cost than would otherwise be the case. GFD s Index of Government Bonds Global Financial Data has put together an index of Government Bond yields that uses bonds from each of these centers of economic power over time to trace the course of interest rates over the
2 past seven centuries. From 1285 to 1600, Italian bonds are used. Data are available for the Prestiti of Venice from 1285 to 1303 and from 1408 to 1500 while data from 1304 to 1407 use the Consolidated Bonds of Genoa and the Juros of Italy from 1520 to General Government Bonds from the Netherlands are used from 1606 to Yields from Britain are used from 1700 to 1914, using yields on Million Bank stock (which invested in government securities) from 1700 to 1728 and British Consols from 1729 to From 1919 to date, the yield on US 10-year bond is used. Bond Yields Over Time Bond yields are determined by a number of factors. These include 1) the growth in real GDP, 2) the inflation rate, 3) supply and demand factors, and 4) risk. The yield on a risk-free government bond should equal the growth in nominal GDP since that represents the opportunity cost of holding a government bond both in terms of investment opportunities (real GDP) and the time value of money (inflation). Higher levels of growth or higher inflation will lead to higher interest rates. Increases in the number of bonds (demand for savings) will lead to higher interest rates, while increases in savings will lead to lower interest rates. Finally, the perceived riskiness of the bonds can lead to higher interest rates. Investors may fear that the government may fail to pay back the bonds, reduce the real cost of the bonds through inflation, or depreciate the currency as a way of reducing their cost. All of these factors can impact the price of Government Bonds, and thus their yield. The trend over the past seven centuries has been for bond yields to decline. This can t be attributed to lower economic growth or lower inflation, but must clearly be attributed to lower risk of default. Between 1285 and the mid-1600s, yields on government bonds fluctuated between 6% and 10% and in some cases were around 20%. Because there is little data on government bond yields before the 1700s, the spikes in yields that occur can be attributed to specific events that affected the issuers, generally the risk of default stemming from wars that occurred. It may very well be that yields on other securities were lower at different points in time up to the 1700s, but the paucity of data makes it difficult to determine this. Nevertheless, the trend is clear. Since 1700, well developed markets for bonds have existed in London and New York enabling the yields on government bonds to be traced with accuracy. Since the mid-1600s, the average yield on government bonds has been around 4%. Before the 1600s, high interest rates were driven by risk; since the 1600s, high interest rates have been driven by inflation. Being the center of economic power provides benefits to that country because it can issue bonds at a lower cost than a country in the periphery. In the long run, this can lead to over issuance of debt if the country chooses to take advantage of its position by issuing excessive debt to investors in other countries.
3 12/31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/ /30/ /30/ /31/ /31/1495 With the mushrooming US government debt, some people are beginning to wonder whether the United States will be able to maintain its position as the world s central economic power. Before looking at the United States, let s look at government bond yields in Italy, the Netherlands and Great Britain in the past. Italian Bond Yields Because of the paucity of data from before 1700, bond yields as given in Sidney Homer s A History of Interest Rates, are used. The two principal sources are the Prestiti of Venice (Figure 1) and the Consolidated Bonds of Genoa. During Medieval times, governments used taxes on trade and revenues from monopolies, on salt for example, to cover expenses during regular times, but inevitably wars broke out leading to the need to raise additional money. The government would have to find some way to force nobles and businessmen to hand over money to cover the costs of war. 25 Venice Prestiti Yield Figure 1 Genoa and Venice used forced loans as a way of raising funds from its citizens. The two citystates consolidated these forced loans and allowed creditors to trade these forced loans on open markets turning them into modern-day bonds. The debts had no maturity date, but during periods of peace, the governments would use surplus revenues to retire some of these debts. Governments that met interest payments on their forced loans, paid off debts during peace times, and did not default on these debts could establish confidence in their debt, enabling them to issue more bonds in the future. As Venice prospered, it increased its ability to service its loans. Venice established a fund to repurchase Prestiti, floated voluntary loans when necessary, borrowed in
4 12/31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/1700 anticipation of future tax collections, and established a credible record of repayment. This enabled the cities of Venice and Genoa to borrow money at 6%-10% during Medieval times and during the Renaissance, rather than the 10%-15% that other rulers had to pay. Dutch Bond Yields As the center of trade shifted out of the Mediterranean and into the Atlantic after 1500, the center of economic power shifted as well. The rulers of Spain, France and England had periodically defaulted or forced loans on their subjects, and failed to establish a record of regular repayment of loans that would have enabled them to become the financial centers of Europe. The Netherlands successfully liberated itself from Spain between 1568 and The Dutch established the Dutch east India Company in 1602 and the Dutch West India Company in The Netherlands didn t have to pay for an expensive court, fought their wars at home rather than abroad, profited from international trade, and saved money. The Amsterdam Exchange dealt not only in shares of the Dutch East India Company and Dutch West India Company, but in government bonds as well. Most securities were in the form of Annuities issued by the individual provinces, the United Provinces and the towns. This is the essential way in which Dutch lending differed from Italian lending. The Italian credit system relied upon a system of private international banking. The Medicis and other commercial bankers would lend their funds to states, knowing the risks involved. The Italians also had officially chartered banks that intermediated deposits and loans. 25 Dutch 10-Year Government Bond Outside of the Italian city-states, loans to heads of state were basically personal loans that clearly ran the risk of default. Spanish, French and English kings borrowed when they had to, defaulted when they couldn t pay, but had no system of drawing upon the savings of the public. The Dutch, on the other hand, developed state finance based upon the government s ability to pledge its revenues against the annuities they had issued. Having no royal court, and relying upon local governments, the Dutch paid off loans on time with little risk of default. As risk declined, interest rates fell to 4% (Figure 2), the
5 lowest they had ever been in history and a rate consistent with the low level of default risk that governments enjoy today. English Government Bond Yields The Glorious Revolution of 1688 transformed England politically and economically. Unlike his predecessors, William III was a constitutional monarch. Though he had no pretensions to absolute personal power, and though in theory he borrowed on behalf of the English people, he also represented the Whig mercantile interests which backed him and dominated Parliament. The Bank of England was established in 1694, borrowing at 8% (when Dutch rates were at 3-4%), and in 1720, the attempt to convert existing government debt into shares in the South Sea Company created the South Sea Bubble. By the 1740s, interest rates had declined to the 3% range and in 1751 the 3% British Consols were issued, which are still traded in London today. As can be seen by the graph of long-term interest rates, the risk of default on British debt has been almost non-existent as illustrated by the consistently low interest rates, except in time of inflation. During the Napoleonic Wars, Britain s Government debt as a share of GDP exceeded 200%, but government bond yields stayed below 6%. After 1815, British capital funded canals, railroads in the UK, America and other countries, mines in Latin American, Britain s colonies and foreign bonds issued by every government in the world. Since there were no major wars or fiscal crises in the UK after 1815, Britain s Government debt shrank to 20% of GDP by Interest rates on government bonds fell below 2.5% in 1896, enabling Britain to reduce the interest rate on its Consols to 2.5%. Other countries also benefited from the decline in interest rates. The United States, Germany, France and other countries were all able to issue government debt at 3% by the end of the 1800s, whereas at the beginning of the 1800s, 5-6% or even more was the norm. Small government, due to few or small wars, combined with shrinking government debt reduced the risk of default and lowered interest rates throughout the world. United States Bond Yields World War I shifted the world s financial center from London to New York. In 1915, British bond yields rose above American yields and have remained that way ever since. The United States has never defaulted on its Central government bonds, so rises in bond yields have been driven mainly by higher rates of economic growth, inflation, and the supply and demand for government bonds. There are several clear trends in government bonds in the US during the past 100 years. From 1902 to 1920, bond yields rose from 2.82% to 5.67%, with most of the increase occurring between 1914 and 1920 due to the risks of war and inflation. From 1921 to 1945, interest rates fell from 5.67% to 1.55% due to deflation, depression and the manipulation of bond yields during World War II by the government. From 1945 to 1981, interest rates rose from 1.55% to 15.84%. This was the highest level for government bond yields in almost 500 years as inflation spiraled out of control due to Keynesian economic policies. Between 1981 and 2011, bond yields fell from 15.85% to 1.46%.
6 Bond Yields in the Twenty-First Century What will this chart look like at the end of the 21 st century? The clear driving factor for bond yields over the past seven centuries has been the responsibility or irresponsibility of national governments. From Venice and Genoa to the Netherlands, Britain and the United States, when governments kept borrowing to a minimum and paid off their debts, interest rates fell, benefitting not only the national, but the global economy. Capital was freed up for the private sector which contributed to the success of the industrial revolution. The 1700s and 1800s had the lowest interest rates in history. The 1900s enjoyed both some of the lowest and the highest interest rates (Figure 3), depending upon the level of inflation generated by the government. Since the risk of default is low, it is inflation and the supply and demand for bonds that has driven interest rates since the mid-1700s. 12 US CPI % Change 10 8 USA 10 Year Government Bond % Change Figure 2 Government bond yields reached their lowest levels in history in 2012, dropping below 1.50%. Whether bond yields start to rise from here will depend upon the behavior of the government and its willingness to balance its books. US government debt has increased to over 100% of GDP. This is no guarantee that interest rates will rise since investors flee to US Government Debt as a haven of safety. Britain s debt exceeded 200% of GDP after the Napoleonic Wars and Japan has run deficits for 20 years with its government debt edging toward 200% of GDP.
7 Nevertheless, Britain paid off its debt during the 1800s keeping interest rates from rising. Japan has seen no growth in nominal GDP during the past 20 years, and has been able to rely upon domestic savings to fund its growing government debt. Currently, there is no prospect that the United States will begin to pay off its debt as Britain did in the 1800s, and low interest rates are little consolation if your economy is not growing. When the economy returns to more normal growth rates and the rest of the world becomes less risky, government bond yields will rise. Even if the United States were to suffer the fate of Japan and fail to grow for the next 20 years, which is unlikely, its inability to fund its debt domestically, and the inevitable growth of China, India and other emerging markets, is likely to drive growth and interest rates upward in the decades to come. Although the United States may not default on its debt, it can reduce the burden through inflation or depreciation. If this were to occur, the balance of financial power could shift again. Whether United States bond yields are used in this graph at the end of the 21 st Century, or those of China, India or some other country will depend upon the fiscal constraint or profligacy of the US Government. As long as investors perceive that the United States remains the center of the world s economy with little risk of default, the United States can continue to benefit from low government bond yields, but if US government debt continues to grow and another economic center develops which is perceived as being safer than the United States, the US could lose its role as the center of the global economy and all the benefits that go with it.
8 GFD File ID (Symbol) Current Series CPUSAM File Description (Name) United States BLS Consumer Price Index NSA Periodicity (dates) Annual From Dec 1820 To Sep 1875 Monthly From Oct 1875 To June 2012 IGGOVTA GFD Long-Term Government Bond Index Annual From Dec 1285 To Dec 2009 IGUSA10D USA 10-year Bond Constant Maturity Yield Daily From Oct 1790 To Sep 1798 Monthly From Oct 1865 To Dec 1961 Daily From Jan 1962 To May 2012 IGITVA Venice Prestiti Yield Annual From Dec 1285 To Dec 1502 IGNLD10D Netherlands 10-year Government Bond Yield Annual From Dec 1517 To Jan 1814 Monthly From Feb 1814 To Aug 1882 Weekly From Sep 1882 To Dec 1913 Monthly From Jan 1914 To Mar 1978 Daily From Apr 1978 To May 2012 NOTICE AND DISCLAIMER This document and all of the information contained in it, including, without limitation, all text, data, graphs, charts, and tables (collectively, the Information ) is the property of Global Financial Data, Inc. or its subsidiaries, parent companies, and/or affiliates (collectively, GFD ), or GFD s licensors, direct or indirect suppliers, or any third party involved in the making, compiling, or creation of the Information (collectively with GFD, the Information Providers ) and is provided for informational purposes only. The Information may not be reproduced or re-disseminated in whole or in part without prior written permission from GFD. The Information may not be used to create derivative works or to verify or correct other data or information. For example, without limitation, the Information may not be used to create indices, databases, risk models, analytics, software, or in connection with the issuing, offering, sponsoring, managing, or marketing of any securities, portfolios, financial products, or other investment vehicles utilizing or based on, linked to, tracking, or otherwise derived from the Information or any other GFD data, information, products, and/or services. NONE OF THE INFORMATION PROVDERS MAKES ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION (OR THE RESULTS OBTAINED BY THE USE THEREOF), AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH INFORMATION PROVIDER EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION. Without limiting any of the foregoing and to the maximum extent provided by law, in no event shall any Information Provider or their employees, officers, and directors have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits) or any other damages even if notified of the possibility of such damages. Information containing historical information, data, or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast, or prediction. Past performance does not guarantee future results. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product, or other investment vehicle for any trading strategy. Any use of or access to products, services, or information of GFD requires a license from GFD. GFD and its parents, subsidiaries, and affiliates brands and product names are trademarks, service marks, or registered trademarks of GFD or its parents, subsidiaries, and/or affiliates in the United States of America or other jurisdictions, as applicable. Nothing contained herein or the Information is intended to transfer, assign, mortgage, pledge, or otherwise provides a license for you to use GFD s, its parents, subsidiaries, and/or affiliates trademarks, service marks, or registered trademarks.
S&P 500 Composite (Adjusted for Inflation)
12/31/1820 03/31/1824 06/30/1827 09/30/1830 12/31/1833 03/31/1837 06/30/1840 09/30/1843 12/31/1846 03/31/1850 06/30/1853 09/30/1856 12/31/1859 03/31/1863 06/30/1866 09/30/1869 12/31/1872 03/31/1876 06/30/1879
More informationFixed Income Focus: Ireland & Portugal
In the past decade we have seen droves of investors driven to global fixed income markets in search of higher yields. While the global pool of fixed income securities more than doubled, we saw asset bubbles
More informationGlobal Investing: The Importance of Currency Returns and Currency Hedging
Global Investing: The Importance of Currency Returns and Currency Hedging There is a continuing trend for investors to reduce their home bias in equity allocation and increase the allocation to international
More informationMSCI CHINA AND USA INTERNET TOP 50 EQUAL WEIGHTED INDEX
INDEX METHODOLOGY MSCI CHINA AND USA INTERNET TOP 50 EQUAL WEIGHTED INDEX September 2014 SEPTEMBER 2014 CONTENTS 1 Introduction... 3 2 Constructing the MSCI China and USA Internet Top 50 Equal Weighted
More informationMSCI Global Minimum Volatility Indices Methodology
MSCI Global Minimum Volatility Indices Methodology Table of Contents Section 1: Introduction... 3 Section 2: Characteristics of MSCI Minimum Volatility Indices... 3 Section 3: Constructing the MSCI Minimum
More informationMSCI AUSTRALIA SELECT HIGH DIVIDEND YIELD INDEX
INDEX METHODOLOGY MSCI AUSTRALIA SELECT HIGH DIVIDEND YIELD INDEX March 2014 MARCH 2014 CONTENTS 1 Introduction... 3 2 Constructing the MSCI Australia Select High Dividend Yield Index... 4 3 Maintaining
More informationESG and Fixed Income Investing
ESG and Fixed Income Investing ESG and Fixed Income Investing Laura Nishikawa, Head of ESG Fixed Income Research CSR Investing Summit New York, NY 22 July 2014 3 Introducing MSCI ESG Research ESG ratings
More informationINDEX METHODOLOGY MSCI REIT PREFERRED. Index Construction and Maintenance Methodology for the MSCI REIT Preferred Index.
INDEX METHODOLOGY MSCI REIT PREFERRED INDEX METHODOLOGY Index Construction and Maintenance Methodology for the MSCI REIT Preferred Index December 2014 DECEMBER 2014 CONTENTS 1 Introduction... 3 2 Defining
More informationMSCI Announces the Results of the 2011 Annual Market Classification Review
MSCI Announces the Results of the 2011 Annual Market Classification Review Geneva June 21, 2011 MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, including indices,
More informationMSCI Dividend Masters Indexes Methodology
Index Methodology MSCI es Methodology July 2014 msci.com Contents 1 Introduction... 3 2 Index Construction Methodology... 3 Section 2.1: Applicable Universe... 3 Section 2.2: Security Selection... 3 Section
More informationUpdated Stress Testing Features in RiskMetrics RiskManager
Updated Stress Testing Features in RiskMetrics RiskManager Predictive Stress Test for the 2009 Equity Market Rally. Audrey Costabile Christopher Finger Katarzyna Siudek 1 (Marie Curie Fellow) December
More informationMSCI Core Infrastructure Indexes Methodology
Index Methodology MSCI Core Infrastructure Indexes Methodology January 2015 msci.com Contents 1 Introduction... 3 2 Constructing MSCI Core Infrastructure Indexes... 3 2.1 Country and Constituent Selection...
More informationBond markets vote for global recovery
Bond markets vote for global recovery Weekly Market View 11 May 2015 1 % Euro area recovery, oil rebound lead to bond sell-off German bund yields recovered from record low levels, leading a surge in global
More informationCanadian Life Insurance Industry
A.M. Best Company s 9 th Annual Insurance Market Briefing Canada Canadian Life Insurance Industry Edward Kohlberg, CPA, FLMI Senior Financial Analyst Richard McMillan Senior Financial Analyst September
More informationLIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS
APRIL 2014 LIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS Most economists talk about where the economy is headed it s what they do. Paying attention to economic indicators can give you an idea of
More informationMSCI PRIVATE ASSET INVESTMENT CONFERENCE
MSCI PRIVATE ASSET INVESTMENT CONFERENCE Jun 30, 2015 Tokyo MSCI is pleased to invite you to the MSCI Private Asset Investment Conference which is widely reputed as the prime real estate investment event
More informationIntroducing the Loan Pool Specific Factor in CreditManager
Technical Note Introducing the Loan Pool Specific Factor in CreditManager A New Tool for Decorrelating Loan Pools Driven by the Same Market Factor Attila Agod, András Bohák, Tamás Mátrai Attila.Agod@ Andras.Bohak@
More informationMarket Insight: Analyzing Hedges for Liability-Driven Investors
Market Insight: Lisa R. Goldberg and Sang-Hoon Kim Abstract: Managing surplus risk enables pension plans and endowments to align their asset allocations with their future obligations. BarraOne s Correlation
More informationMSCI Quality Indices Methodology
Methodology Contents Contents... 2 Section 1: Introduction... 3 Section 2: Index Construction Methodology... 4 Section 2.1: Applicable Universe... 4 Section 2.2: Determination of Quality Score... 4 Section
More informationThe Merchant Securities FTSE 100. Hindsight II Note PRIVATE CLIENT ADVISORY
The Merchant Securities FTSE 100 Hindsight II Note Our first FTSE-100 Hindsight Note is now fully subscribed; however, as a result of exceptional investor demand we are launching the FTSE- 100 Hindsight
More informationInterest Rate Sensitivity Analysis on European RMBS
JULY 2011 STRUCTURED THOUGHT Interest Rate Sensitivity Analysis on European RMBS Constantinos Tavlas Associate Director 44.207.772.1233 constantinos.tavlas@moodys.com Andrew Jacobs Director 212.553.7765
More informationTaking stock of China s external debt: low indebtedness, but rapid growth is a concern
1991 1993 1995 1997 1999 21 23 25 27 29 211 213 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 ECONOMIC ANALYSIS Taking stock of China s external debt: low indebtedness,
More informationNatalia Orlova, Chief Economist December 2004 Norlova@alfabank.ru +7 095 795 36 77
New Environment for Refinancing in Russia Natalia Orlova, Chief Economist December 2004 Norlova@alfabank.ru +7 095 795 36 77 Excessive sterilization depressed liquidity Banking crisis stemmed from a decline
More informationCONSUMER CREDIT DEFAULT RATES DECREASE IN SEPTEMBER 2015 ACCORDING TO THE S&P/EXPERIAN CONSUMER CREDIT DEFAULT INDICES
CONSUMER CREDIT DEFAULT RATES DECREASE IN SEPTEMBER 2015 ACCORDING TO THE S&P/EXPERIAN CONSUMER CREDIT DEFAULT INDICES Four of the Five Cities Report Default Rate Decreases in September 2015 New York,
More informationPaying off government debt
G l o b a l F i n a n c i a l D a t a Paying off government debt Two Centuries of Global Experience Dr. Bryan Taylor, Chief Economist, Global Financial Data Using a data set on government debt that was
More informationAnalyzing Market Response Using the Barra US Equity Model. Jyh Huei Lee, Jose Menchero, Frank Vallario. msci.com
US Market Report The on the US Equity Market Analyzing Market Response Using the Barra US Equity Model Jyh Huei Lee, Jose Menchero, Frank Vallario Introduction On May 1, 2013, the Federal Reserve announced
More informationCrafting a Forward Looking Investment Portfolio
BOURSE SECURITIES LIMITED February 15th, 2016 Crafting a Forward Looking Investment Portfolio This week, we at Bourse evaluate the investment considerations and opportunities having looked previously at
More informationA Closer Look at Interest Rate Floors
A Closer Look at Interest Rate Floors CONTRIBUTOR Vishal Arora Director Global Index Research & Design vishal.arora@spdji.com Currently, there is much debate in the market surrounding if and when interest
More informationWhich Came First, the Goose or the Golden Egg? Returning to the Gold Standard in Five Easy Steps
Which Came First, the Goose or the Golden Egg? Returning to the Gold Standard in Five Easy Steps Dr. Bryan Taylor, Chief Economist, Global Financial Data You hear a lot of people in the United States talking
More informationStatistics Netherlands. Macroeconomic Imbalances Factsheet
Macroeconomic Imbalances Factsheet Introduction Since the outbreak of the credit crunch crisis in 2008, and the subsequent European debt crisis, it has become clear that there are large macroeconomic imbalances
More informationResults of MSCI 2015 Market Classification Review
Results of MSCI 2015 Market Classification Review China A Shares on Track for Inclusion MSCI and CSRC Will Form Working Group to Address Remaining Issues Geneva June 9, 2015 MSCI Inc. (NYSE: MSCI), the
More informationEurozone Economic dashboard
Eurozone Economic dashboard Our Economic Dashboard is designed to help investors understand the true state of the eurozone economy. It is not meant to serve as a direct prediction regarding the future
More informationS&P DOW JONES INDICES AND MSCI ANNOUNCE REVISIONS TO THE GLOBAL INDUSTRY CLASSIFICATION STANDARD (GICS ) STRUCTURE IN 2016
S&P DOW JONES INDICES AND MSCI ANNOUNCE REVISIONS TO THE GLOBAL INDUSTRY CLASSIFICATION STANDARD (GICS ) STRUCTURE IN 2016 New York, November 10, 2014 - S&P Dow Jones Indices, a leading provider of financial
More informationChapter 17. Preview. Introduction. Fixed Exchange Rates and Foreign Exchange Intervention
Chapter 17 Fixed Exchange Rates and Foreign Exchange Intervention Slides prepared by Thomas Bishop Copyright 2009 Pearson Addison-Wesley. All rights reserved. Preview Balance sheets of central banks Intervention
More informationEuropean debt crisis hits UK international trade
JUNE 0 European debt crisis hits UK international trade Inflation threat and weak pound concern UK businesses trading internationally Seven in 0 exporters are concerned that inflation will affect their
More informationAnalysts and Investors conference call Q1 2014 results 15 May 2014
Analysts and Investors conference call Q1 2014 results 15 May 2014 DISCLAIMER This presentation has been prepared by Air Berlin PLC. No representation, warranty or undertaking, express or implied, is made
More informationIPD GLOBAL QUARTERLY PROPERTY FUND INDEX
IPD GLOBAL QUARTERLY PROPERTY FUND INDEX Contributing Managers and Funds March 2015 MARCH 2015 CONTRIBUTING MANAGERS AND FUNDS MARCH 2015 Asia Pacific Management House AMP Capital Investors AMP Capital
More informationShort and Simple Guide to Bonds
Short and Simple Guide to Bonds Paul Puckett Introduction The purpose of The Short and Simple Guide to Bonds is to provide investors with the basic information they need to understand bonds, the purpose
More informationCAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS. Bryan Taylor
CAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS Introduction Bryan Taylor The recent devaluations in Asia have drawn attention to the risk investors face
More informationFinancial Planning in a Low Interest Rate Environment: The Good, the Bad and the Potentially Ugly
Financial Planning in a Low Interest Rate Environment: The Good, the Bad and the Potentially Ugly In June of 2012, the 10 year Treasury note hit its lowest rate level in history when it fell to 1.62%.
More information2013 global economic outlook: Are promising growth trends sustainable? Timothy Hopper, Ph.D., Chief Economist, TIAA-CREF January 24, 2013
2013 global economic outlook: Are promising growth trends sustainable? Timothy Hopper, Ph.D., Chief Economist, TIAA-CREF January 24, 2013 U.S. stock market performance in 2012 * +12.59% total return +6.35%
More informationEconomic indicators dashboard
AS OF NOVEMBER 17, 2015 Economic indicators dashboard Vist www.blog.helpingadvisors.com for the full commentary of the Economic Indicators Dashboard. MOST RECENT 3-MO. trend TYPICAL range EXTREME range
More informationStatement by Dean Baker, Co-Director of the Center for Economic and Policy Research (www.cepr.net)
Statement by Dean Baker, Co-Director of the Center for Economic and Policy Research (www.cepr.net) Before the U.S.-China Economic and Security Review Commission, hearing on China and the Future of Globalization.
More informationLessons Learned From Stress Testing Loan and Lease Portfolios TONY HUGHES, MANAGING DIRECTOR, HEAD OF SPECIALIZED MODELING
Lessons Learned From Stress Testing Loan and Lease Portfolios TONY HUGHES, MANAGING DIRECTOR, HEAD OF SPECIALIZED MODELING Speaker Tony Hughes, PhD Managing Director Specialized Modeling Dr. Hughes oversees
More informationBlackRock Launches Retirement Income Indexes
BlackRock Launches Retirement Income Indexes Groundbreaking Indexes Give Investors Metric to Translate Retirement Savings into Retirement Income; Enables Better Planning, Midcourse Corrections During Critical
More informationThe Return of Saving
Martin Feldstein the u.s. savings rate and the global economy The savings rate of American households has been declining for more than a decade and recently turned negative. This decrease has dramatically
More informationChapter 3.1. Capital and Trade Flow Drive Currency Values
Chapter 3.1 Capital and Trade Flow Drive Currency Values 0 CAPITAL AND TRADE FLOW DRIVE CURRENCY VALUES Supply and demand are the simple concepts behind all price movement in the forex market, and no two
More informationHow To Know If China Is In Crisis
For professional investors 28 October 2015 1 CHI TIME CHINA IN CRISIS? Everything will be okay in the end. If it s not okay, it s not the end. John Lennon Many observers believe that China is in a financial
More informationBS2551 Money Banking and Finance. Institutional Investors
BS2551 Money Banking and Finance Institutional Investors Institutional investors pension funds, mutual funds and life insurance companies are the main players in securities markets in both the USA and
More informationNational Credit Default Rates Continued Their Upward Trend in December 2014 According to the S&P/Experian Consumer Credit Default Indices
National Credit Default Rates Continued Their Upward Trend in December 2014 According to the S&P/Experian Consumer Credit Default Indices Four of the Five Cities Saw Default Rates Increase in December
More informationDFA INVESTMENT DIMENSIONS GROUP INC.
PROSPECTUS February 28, 2015 Please carefully read the important information it contains before investing. DFA INVESTMENT DIMENSIONS GROUP INC. DFA ONE-YEAR FIXED INCOME PORTFOLIO Ticker: DFIHX DFA TWO-YEAR
More informationEconomic Research: Spain's Housing Market May Need Four More Years To Rebalance. Table Of Contents
June 14, 2012 Economic Research: Spain's Housing Market May Need Four More Years To Rebalance Credit Market Services: Jean-Michel Six, EMEA Chief Economist, Paris (33) 1-4420-6705; jean-michel_six@standardandpoors.com
More informationNewWave GBP Currency ETN
Price Corporate and Investment Banking NewWave GBP Currency ETN Valuation Date 31 December 2015 NewWave Exchange Traded Notes (ETNs) constitute unconditional, unsecured and unsubordinated obligations of
More informationFor professional investors and advisors only. Not suitable for retail clients. Schroder Life Flexible Retirement Fund
May 2016 For professional investors and advisors only. Not suitable for retail clients. Schroder Life Flexible Retirement Fund Improving the DC journey Members in a defined contribution (DC) pension scheme
More informationWhy Treasury Yields Are Projected to Remain Low in 2015 March 2015
Why Treasury Yields Are Projected to Remain Low in 5 March 5 PERSPECTIVES Key Insights Monica Defend Head of Global Asset Allocation Research Gabriele Oriolo Analyst Global Asset Allocation Research While
More informationDaily FX Focus. 31-Dec-2014
Australia FX Pick:AUD/USD Nov private sector credit rose 5.9% YoY, as expected. AUD/USD was consolidating in a range of 0.8122-0.8203 levels. AUD/USD s short-term support is at 0.8070, and resistance is
More informationwww.standardandpoors.com/ratingsdirect 1
December 9, 2009 Research Update: Spain Outlook Revised To Negative On Rising Fiscal Deficits And Risks Posed By Macroeconomic Adjustment Primary Credit Analyst: Trevor Cullinan, London (44) 20-7176-7110;trevor_cullinan@standardandpoors.com
More informationFixed Income 2015 Update. Kathy Jones, Senior Vice President Chief Fixed Income Strategist, Schwab Center for Financial Research
Fixed Income 2015 Update Kathy Jones, Senior Vice President Chief Fixed Income Strategist, Schwab Center for Financial Research 1 Fed: Slow and Low 2015 Fixed Income Outlook 2 Yield Curve Flattening 3
More informationRating Action: Moody's changes outlook to negative from stable on Argentine Banks' deposit ratings; affirms deposit ratings
Rating Action: Moody's changes outlook to negative from stable on Argentine Banks' deposit ratings; affirms deposit ratings Global Credit Research - 05 Aug 2014 The rating action follows Moody's decision
More informationResearch. What Impact Will Ballooning Government Debt Levels Have on Government Bond Yields?
Research What Impact Will Ballooning Government Debt Levels Have on Government Bond Yields? The global economy appears to be on the road to recovery and the risk of a double dip recession is receding.
More informationMaximising income through bonds Elizabeth Moran Director of Education and Fixed Income Research
Maximising income through bonds Elizabeth Moran Director of Education and Fixed Income Research What is your portfolio allocation? Do you have enough defensive assets? Key considerations Income, given
More informationMaturity The date where the issuer must return the principal or the face value to the investor.
PRODUCT INFORMATION SHEET - BONDS 1. WHAT ARE BONDS? A bond is a debt instrument issued by a borrowing entity (issuer) to investors (lenders) in return for lending their money to the issuer. The issuer
More informationFactsheet Phoenix Autocallable Notes April 2012
This information is intended for investment professionals only and should not be provided to or relied upon by retail investors in any circumstances. Investment Guide for Income Builder December 2011 www.gilliat.co.uk
More informationRecent U.S. Economic Growth In Charts MAY 2012
Recent U.S. Economic Growth In Charts MAY 212 GROWTH SINCE 29 The Growth Story Since 29 Despite the worst financial crisis since the Great Depression and a series of shocks in its aftermath, the economy
More informationAnswers to Review Questions
Answers to Review Questions 1. The real rate of interest is the rate that creates an equilibrium between the supply of savings and demand for investment funds. The nominal rate of interest is the actual
More informationA Checklist for a Bond Market Sell-off
A Checklist for a Bond Market Sell-off New Zealand Fixed Income Monthly Commentary February 2013 Christian@harbourasset.co.nz +64 4 460 8309 Just like 2011 and 2012, the start of a new year has again prompted
More informationGlobal Client Group The Gateway to AWM
Global Client Group The Gateway to AWM January 2013 For professional investors only Content 1 2 3 Deutsche Bank and Asset Global Client Group Our product and service offering 1 Deutsche Bank A global partner
More informationGeneral Trading Companies
Last upated: July 13, 2011 Rating Methodology by Sector General Trading Companies General trading companies operate in a broad array of industries, including metals, energy, machinery, food, chemicals,
More information2013 Distribution Summary Investor, Premium & e -Series Breakdown of Cumulative Distributions for the Period January 1, 2013 to December 31, 2013
2013 Summary Breakdown of Cumulative s for the Period January 1, 2013 to December 31, 2013 TD Comfort Portfolios Investor Series TD Comfort Conservative Portfolio 0.070042 0.024999 0.040647 0.051698 0.187386
More informationTreasury Bonds directly makes the Sub-Fund riskier than traditional exchange traded funds investing in A-Shares or in markets other than the PRC.
IMMEDIATE RELEASE IMPORTANT NOTES 1. E Fund Citi Chinese Government Bond 5-10 Years Index ETF (the Sub-Fund ) is a passively managed exchange traded fund ( ETF ) and is traded on the Stock Exchange of
More informationThe upside return potential of the stock market with principal guarantee
This series is available The upside return potential of the stock market with principal guarantee If you re tempted by the higher potential gains of Canadian stocks, but a little worried about the downside
More informationAnnual Borrowing Plan
20154 Bosnia and Herzegovina Federation of Bosnia and Herzegovina Federal Ministry of Finance Annual Borrowing Plan 2016 January 2016 www.fmf.gov.ba INTRODUCTION In order to increase transparency, fiscal
More informationRESULTS OF MSCI 2016 MARKET CLASSIFICATION REVIEW
RESULTS OF MSCI 2016 MARKET CLASSIFICATION REVIEW MSCI will delay including China A shares in the MSCI Emerging Markets Index New York June 14, 2016 MSCI Inc. (NYSE: MSCI), a leading provider of global
More informationINVESTMENT CONFERENCE
INVESTMENT CONFERENCE Knowing where to look Guy de Blonay Fund Management Director 16 September 2015 ON THE PLANET TO PERFORM 1 Our approach in brief Objective Long-term capital growth principally through
More informationS&P DOW JONES INDICES AND MSCI ANNOUNCE FURTHER REVISIONS TO THE GLOBAL INDUSTRY CLASSIFICATION STANDARD (GICS ) STRUCTURE IN 2016
S&P DOW JONES INDICES AND MSCI ANNOUNCE FURTHER REVISIONS TO THE GLOBAL INDUSTRY CLASSIFICATION STANDARD (GICS ) STRUCTURE IN 2016 New York, November 2, 2015 - S&P Dow Jones Indices, a leading provider
More informationPERSONAL RETIREMENT SAVINGS ACCOUNT INVESTMENT REPORT
PENSIONS INVESTMENTS LIFE INSURANCE PERSONAL RETIREMENT SAVINGS ACCOUNT INVESTMENT REPORT FOR PERSONAL RETIREMENT SAVINGS ACCOUNT () PRODUCTS WITH AN ANNUAL FUND MANAGEMENT CHARGE OF 1% - JULY 201 Thank
More informationState budget borrowing requirements financing plan and its background May 2013
Public Debt Department State budget borrowing requirements financing plan and its background May 2013 THE MOST IMPORTANT INFORMATION Monthly issuance calendar... 2 Record high level of foreign investors'
More informationMSCI CORE REAL ESTATE INDEXES METHODOLOGY
INDEX METHODOLOGY MSCI CORE REAL ESTATE INDEXES METHODOLOGY Index Construction and Maintenance Methodology for the MSCI Core Real Estate Indexes July 2016 JULY 2016 CONTENTS 1 Introduction... 3 2 Eligible
More informationBond Market Perspectives
LPL FINANCIAL RESEARCH Bond Market Perspectives December 16, 2014 Tempting TIPS Anthony Valeri, CFA Fixed Income & Investment Strategist LPL Financial Highlights Lower inflation expectations as a result
More informationIntroduction to Convertible Debentures
Introduction to Convertible Debentures Intro to Convertible Debentures March, 2009 Convertible debentures are hybrid securities which offer advantages of both bonds and equities. Like ordinary bonds they
More informationElectricity Supply Board
Electricity Supply Board Investor Presentation 2012 Interim Results December 2012 Disclaimer Forward looking statements: This presentation contains certain forward-looking statements with respect to ESB
More informationUnderstanding Fixed Income
Understanding Fixed Income 2014 AMP Capital Investors Limited ABN 59 001 777 591 AFSL 232497 Understanding Fixed Income About fixed income at AMP Capital Our global presence helps us deliver outstanding
More informationRating Action: Moody's downgrades Hypo Alpe Adria's guaranteed debt ratings to non-investment grade, ratings remain on review for downgrade
Rating Action: Moody's downgrades Hypo Alpe Adria's guaranteed debt ratings to non-investment grade, ratings remain on review for downgrade Global Credit Research - 23 May 2014 New rating levels reflect
More informationTHE LOAN CONSOLIDATION AND INVESTMENT RESERVE (LCIR)
Appendix 8 THE LOAN CONSOLIDATION AND INVESTMENT RESERVE (LCIR) Contents Page Introduction 94 LCIR Holdings of CGS 94 1998-99 Activities of the LCIR 95 Tables Table 1: LCIR Investments at 30 June 1999
More informationSukuk Liquidity Trends
PRACTICE ESSENTIALS SUKUK 21 GLOBAL Liquidity Trends CONTRIBUTOR Michele Leung Associate Director, Fixed Income Indices michele.leung@spdji.com While global sukuk issuance declined by 13% in 213, the liquidity
More informationManaging FX Risk when trading with Australia. Mark Coulam Senior Manager, Treasury Solutions.
Managing FX Risk when trading with Australia Mark Coulam Senior Manager, Treasury Solutions. Reducing Volatility in your business What does your business have exposure to? Where does it occur? Quantify
More informationPROTECTING YOUR PORTFOLIO WITH BONDS
Your Global Investment Authority PROTECTING YOUR PORTFOLIO WITH BONDS Bond strategies for an evolving market Market uncertainty has left many investors wondering how to protect their portfolios during
More informationdb x-trackers MSCI World High Dividend Yield Index UCITS ETF (DR) Supplement to the Prospectus
db x-trackers MSCI World High Dividend Yield Index UCITS ETF (DR) Supplement to the Prospectus This Supplement contains information in relation to db x-trackers MSCI World High Dividend Yield Index UCITS
More information96 97 98 99 00 01 02 03 04 05 06 07 08* FDI Portfolio Investment Other investment
Chartbook Contact: Sebastian Becker +49 69 91-3664 Global Risk Analysis The unwinding of Yen carry trades Some empirical evidence 3 2 1-1 -2-3 -4 October 31, 28 Many years before the sub-prime crisis hit
More informationAN INSIDE LOOK AT S&P MILA 40
DID YOU KNOW? This article originally appeared in the Summer 2013 edition of INSIGHTS, a quarterly publication from S&P DJI, and summarizes key aspects of the S&P MILA 40 Index originally featured in Benchmarking
More informationAmerican Funds Insurance Series. U.S. Government/ AAA-Rated Securities Fund. Summary prospectus Class 3 shares May 1, 2016
American Funds Insurance Series U.S. Government/ AAA-Rated Securities Fund Summary prospectus Class 3 shares May 1, 2016 Before you invest, you may want to review the fund s prospectus and statement of
More informationr a t her t han a s a f e haven
r a t her t han a s a f e haven For Professional Advisers only - not for onward distribution Investors exposure to gold continues to grow but we believe that more consideration of the risks is needed.
More informationECONOMIC ACTIVITY AND EMPLOYMENT FOREIGN TRADE AND COMPETITIVENESS INFLATION CREDIT THE PUBLIC FINANCES
NUMBER 99 JULY 21 ECONOMIC ACTIVITY AND EMPLOYMENT FOREIGN TRADE AND COMPETITIVENESS INFLATION CREDIT THE PUBLIC FINANCES MACROECONOMIC PROJECTIONS 1 7 8 11 12 Directorate general for economics, statistics
More informationDevelopment of the government bond market and public debt management in Singapore
Development of the government bond market and public debt management in Singapore Monetary Authority of Singapore Abstract This paper describes the growth of the Singapore Government Securities (SGS) market.
More informationChina's debt - latest assessment SUMMARY
China's debt - latest assessment SUMMARY China s debt-to-gdp ratio continues to increase despite the slowing economy. A convincing case can be made that the situation is manageable: the rate of credit
More informationThe table below shows Capita Asset Services forecast of the expected movement in medium term interest rates:
Annex A Forecast of interest rates as at September 2015 The table below shows Capita Asset Services forecast of the expected movement in medium term interest rates: NOW Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
More informationAgenda. Saving and Investment in the Open Economy, Part 2. Globalization and the U.S. economy. Globalization and the U.S. economy
Agenda Globalization and the U.S. Economy Saving and Investment in the Open Economy, Part 2 Saving and Investment in Large Open Economies (LOE) The U.S. Current Account Deficit Fiscal Policy and the Current
More informationASEAN Weekly Wrap. Indonesia fiscal deficit revised higher to 2.35% of GDP. Economic Update
Indonesia fiscal deficit revised higher to 2.35% of GDP Thailand s imports unexpectedly rise, but exports declined Indonesia s revised budget has been approved by the Parliament, where the country s GDP
More informationIntroduction. msci.com
Research Bulletin Reporting with Fair Value Adjusted Indexes! Introducing the New Introduction Nearly all U.S.-domiciled international equity mutual funds use fair value methodologies to adjust their daily
More information