Search

The article discusses corporate debt markets, the issuance of corporate bonds in the U.S., and an analysis of the impact of the 2012 American presidential election on interest rates. It states that several companies such as the retailer Costco Wholesale Corp. have issued billions of dollars in debt as a means of paying out large dividends. An examination of the U.S. Federal Reserve Board's policy on interest rates is also provided.

The article discusses the finances of the international banking industry, focusing on large banks in Europe. A loss of liquidity by banks in Europe caused by fears among financiers that the banks will suffer large losses on their holdings of euro area countries' public debts is examined. An increase in the spreads of credit default swaps on corporate bonds of large U.S. banks is discussed.

The article discusses developments in the pensions industry, particularly in the U.S., as of late July 2016. Also cited are the more aggressive approach to risk of public funds than private funds in the country due to a regulatory incentive, the use by private-sector pension funds to use corporate-bond yields to discount future liabilities, and the accounting rules in the U.S. that established perverse incentives for public pension funds.

The article examines government securities prices. Yields on U.S. Treasury bonds are at historic lows of less than one percent as investors have sought a safe haven during the financial crisis. Government securities yields have begun to rise in early 2009, however, as the spread between those rates and the returns offered by stock dividends and corporate bonds grew to levels of over 3 percent.

The article presents information on the U.S. financial market. It is noted that compared with Treasury bonds, yields on corporate debt have shot up to levels not seen since before the 1987 stockmarket crash or, before that, the 1930s depression. In part, corporate bonds look so cheap because Treasury bonds are in short supply and hence so dear. It is informed that mutual funds that specialise in corporate bonds have done badly of late.