“Neither a borrower nor a lender be; For loan oft loses both itself and friend, and negative yields dulls the edge of policy.” Now many countries are both. 10 year Swiss and German government bonds currently carry a negative yield. When one moves to shorter maturities, such as 2 years, we find that France, Germany,

A compromise for Greece and the troika.   A debt exchange offer. New debt at much extended maturities. Face value smaller than existing face value. New debt to feature step up coupons to equalize the NPV of cash flows versus the existing debt. Effectively a refinancing.   Very quickly after winning the Greek elections, Syriza

Yet another FOMC meeting has passed and the market continues to scrutinize the language of the FOMC statement for clues of what the Fed intends to do, heavily assuming that the Fed in fact knows what to do. The details will have been circulated ad nauseum by the financial press so we won’t delve into

The ECB, from pawnshop to used car dealer: If you want to get more money out there into the economy, and get that money circulating instead of sitting in a dusty corner, you can’t just be a pawnshop. Lending cash against investment grade bonds is a pawnshop business, a.k.a. LTRO. Buying bonds in the secondary

We remain positive on the outlook for China generally across risk assets. Political reform is happening in the open and behind the scenes. At the Fourth Plenum, China elevated the constitution and announced the establishment of circuit courts free from local government influence. Part of the reform is the wide scale anti-corruption effort which has