Search results “Rating us government bonds”
Are U.S. Government Bonds AAA or Junk?…And Who’s Lying?
The U.S. government is in debt $21 Trillion, an amount that can never be paid. Yet Moody’s and Fitch reaffirmed their top AAA rating on U.S. debt. Why do they do this? Do they have to? Why can’t politicians, the media, CEO’s, or anyone else, ever tell Americans the truth?
Views: 10829 RonPaulLibertyReport
Why Did S&P Issue Warning on US Bond Rating?
Kevin Hall and Mark Weisbrot discuss reasons for Standard and Poor's warning US could lose AAA rating
Views: 2368 The Real News Network
How Are Bonds Rated?
When investing in bonds, it may be beneficial to consider bond ratings. Learn about the three main ratings agencies and how they evaluate bond issuers. Questions or Comments? Have a question or topic you’d like to learn more about? Let us know: Twitter: @ZionsDirectTV Facebook: www.facebook.com/zionsdirect Or leave a comment on one of our videos. Open an Account: Begin investing today by opening a brokerage account or IRA at www.zionsdirect.com Bid in our Auctions: Participate in our fixed-income security auctions with no commissions or mark-ups charged by Zions Direct at www.auctions.zionsdirect.com
Views: 17090 Zions TV
Warning and Opportunity: U.S. Government Bonds Lose AAA Credit Rating!
U.S. government debt has lost its AA credit rating! Like Greece, Iceland, and Dubai, the runaway spending from our Washington, D.C., politicians has caught up with us.
Views: 138 Money And Markets
Intro to the Bond Market
Most borrowers borrow through banks. But established and reputable institutions can also borrow from a different intermediary: the bond market. That’s the topic of this video. We’ll discuss what a bond is, what it does, how it’s rated, and what those ratings ultimately mean. First, though: what’s a bond? It’s essentially an IOU. A bond details who owes what, and when debt repayment will be made. Unlike stocks, bond ownership doesn’t mean owning part of a firm. It simply means being owed a specific sum, which will be paid back at a promised time. Some bonds also entitle holders to “coupon payments,” which are regular installments paid out on a schedule. Now—what does a bond do? Like stocks, bonds help raise money. Companies and governments issue bonds to finance new ventures. The ROI from these ventures, can then be used to repay bond holders. Speaking of repayments, borrowing through the bond market may mean better terms than borrowing from banks. This is especially the case for highly-rated bonds. But what determines a bond’s rating? Bond ratings are issued by agencies like Standard and Poor’s. A rating reflects the default risk of the institution issuing a bond. “Default risk” is the risk that a bond issuer may be unable to make payments when they come due. The higher the issuer’s default risk, the lower the rating of a bond. A lower rating means lenders will demand higher interest before providing money. For lenders, higher ratings mean a safer investment. And for borrowers (the bond issuers), a higher rating means paying a lower interest on debt. That said, there are other nuances to the bond market—things like the “crowding out” effect, as well as the effect of collateral on a bond’s interest rate. These are things we’ll leave you to discover in the video. Happy learning! Subscribe for new videos every Tuesday! http://bit.ly/1Rib5V8 Macroeconomics Course: http://bit.ly/1R1PL5x Ask a question about the video: http://bit.ly/29Q2f7d Next video: http://bit.ly/29WhXgC Office Hours video: http://bit.ly/29R04Ba Help us caption & translate this video! http://amara.org/v/QZ06/
ALERT! Moody's Places US Government Debt AAA Rating on Review for Possible Debt Downgrade
http://www.stockmarketfunding.com Alert! Moody's Places US Government Debt AAA Rating on Review for Possible Debt Downgrade FROM (AAA Rating) Moody's Investors Service has placed the Aaa bond rating of the government of the United States on review for possible downgrade given the rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on US Treasury debt obligations. On June 2, Moody's had announced that a rating review would be likely in mid July unless there was meaningful progress in negotiations to raise the debt limit. In conjunction with this action, Moody's has placed on review for possible downgrade the Aaa ratings of financial institutions directly linked to the US government: Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks. We have also placed on review for possible downgrade securities either guaranteed by, backed by collateral securities issued by, or otherwise directly linked to the US government or the affected financial institutions. RATIONALE FOR REVIEW The review of the US government's bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, there is a small but rising risk of a short-lived default. Moody's considers the probability of a default on interest payments to be low but no longer to be de minimis. An actual default, regardless of duration, would fundamentally alter Moody's assessment of the timeliness of future payments, and a Aaa rating would likely no longer be appropriate. However, because this type of default is expected to be short-lived, and the expected loss to holders of Treasury bonds would be minimal or non-existent, the rating would most likely be downgraded to somewhere in the Aa range. The specific rating that would be assigned at the conclusion of the review once such a default is cured would depend on (1) the speed with which the default is cured; (2) an assessment of the likely effect on future borrowing costs; and (3) whether there is a change in process for raising the debt limit that would preclude another default. A return to a Aaa rating would be unlikely in the near term, particularly if there were no progress on the third consideration. While the debt limit has been raised numerous times in the past, and sometimes the issue has been contentious, bond interest and principal have always been paid on time. If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that includes long-term deficit reduction. To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years. Moody's does not take a position on what measures should be included in any deficit reduction package. Instead, it is the resultant deficit and debt trajectories that are relevant to the rating and its outlook. RELATED ISSUES In addition to the financial institutions directly linked to the US government, Moody's has also placed on review for possible downgrade pre-refunded municipal bonds (which are invested in government or related securities), certain housing bonds that are supported or guaranteed by the US government, and other municipal ratings that are directly linked to the rating of the US government. Bonds issued by the governments of Israel and Egypt that are guaranteed by the US government were also placed on review for possible downgrade. Structured finance securities that hold government-linked debt as their primary collateral have also been placed on review for downgrade. These include transactions defeased by US Treasury strips, transactions backed by FFELP government guaranteed student loans, and US RMBS backed by government agency mortgages.
How Bond Ratings Work
Trade bonds free for 60 days using TD Ameritrade: http://bit.ly/td-ameritrade Join us in the discussion on InformedTrades: http://www.informedtrades.com/2005065-intro-bond-ratings-how-use-them.html KEY POINTS 1. Bond ratings are a way to assess the default risk of a bond. Default risk is the risk that the bond issuer will not be able to pay back the full coupon and principal obligations of the bond they issued. 2. There are three agencies that collectively account for 90% of the market for credit ratings: Standard & Poor's, Moody's, and Fitch Ratings. Of the three, S&P and Moody's account for 40% each; Fitch is a minority player whose primarily role is to serve as the tie-breaker of sorts when S&P and Moody's issue conflicting ratings. 3. A bond is considered investment grade or IG if its credit rating is BBB- or higher by Standard & Poor's or Baa3 or higher by Moody's. Generally they are bonds that are judged by the rating agency as likely enough to meet payment obligations that banks are allowed to invest in them. A bond's yield is typically inversely related to its rating; in other words, bonds with lower ratings have higher yields. 4. Bond rating agencies have come under considerable criticism in the years since the financial crisis of 2008. Agencies collectively failed to identify credit securities that were at high default risk, and have been sued for their actions. That agencies derive their revenue from governments and corporations that pay them for ratings has also led many to question their integrity and objectivity. 5. In spite of the increase in skepticism regarding the objectivity and competence of the credit ratings agencies, changes in bond ratings can and do impact bond prices, often considerably. As such, investors may wish to factor in ratings into their analysis and portfolio decisions using bond screeners.
Views: 2622 InformedTrades
Bonds - Understanding Rating Agencies
Many people blame the 2008 financial crash on bad bond ratings. Could it happen again? Should you be concerned? Watch this video to learn what ratings agencies look for when determining bond risk. SUBSCRIBE to learn everything you need to know about trading: https://ota.buzz/2JRtxbd SIGN UP for a FREE Half-day class! http://ota.buzz/youtube Want to learn more useful trading and investing tips? Check out these playlists: - Best of: Investing Strategies: https://ota.buzz/2HbqN7U - Best of: Expert Trader Sam Seiden: https://ota.buzz/2Ej8mLp LET'S CONNECT! — https://www.facebook.com/OnlineTradingAcademy/ — https://twitter.com/TradingAcademy — https://www.linkedin.com/company/online-trading-academy/
Debt Crisis of United States of America 2018 Explained in a Simplified Way
Debt Crisis in United States of America, A Simplified way of understanding the whole scenario of the debt crisis, the inevitable collapse of the american Economy. A must watch simple explanation video for understanding the scenario of US Economy, inflation, stagflation, recession etc. for all those who are considering to shift their jobs and businesses to US in coming future, Sorry for the outdated data figures in the video but it will give you a straight and simple idea about the thing. Debt Crisis: http://en.wikipedia.org/wiki/Debt_crisis US Debt Crisis 2013: http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis_of_2013 US debt crisis 2011: http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis_of_2011 Stagflation: http://en.wikipedia.org/wiki/Stagflation Some Featured Thoughts by viewers: David Hung: In order not to pay their debt , The evil U.S government will start wars all over the wold , like they always do in the past , in north Africa , Mid-East , South America & wish to overthrow their biggest creditor China . When U.S government use their borrow-money to build army , weapons & missile to kill human life , they even say they believe in God ,how would God answer this BS ! The most bad thing in the world is that you borrow money and you do not pay back , so you kill the person you borrow money from. Cassio VA : Solutions: 1- Make the bigs companies pay taxes 2- Stop burning money whit military things 3- Turn Communism Emperor Tikacuti : The preparation will be, WWIII and the collapse of the American imperial economy, because the American Empire owes more than 20 trillion dollars, both to the nations of the world and the government. If they continue to borrow money from other nations, other nations will feel threatened and will rise as anti-Americans, because they don't want their money to be stolen and borrowing money from the bank will lead to serious problems, for internal debt, whether banking, IRS, companies, insurances and even health care and whatever they're doing against nations and itself and citizens refuse to pay but spend on materials and products, the fault will not be the government but the people as well, because the American Empire isn't ruled by the government but by the people, who caused the collapse and starting a war against nations for resource like Nazi Germany. WWIII will lead the collapse of the American Empire and Capitalism, ending the Cold War and other problems and that time will come, when the bomb hits. Goler Soft 7: how does the government pay back the us debt by putting the fed printed money in banks all around america? and plus the fed charges interest witch puts the government in more debt. so basicly dats paying debt wit debt. also, how does paying back the debt with the federal reserve money cause inflation when the governments not putting the loaned fed money in the economy just using it on the debt? or mabey the government isnt using it to pay the debt. mabye there just putting it in the ecconomy causing inflation claiming there paying off the debt, but really causing inflation. but why? kalatapie: there are two easy steps in fixing the debt crisis: step 1: increce the taxes on the wealthy people. why? because it is not normal for a man to make more money a day than an american makes a lifetime! stem 2: reduce military spending. because, seriously, the cold war is over. you do not need to spend 20% of your GDP in the military considering that there is no major threat for your country. Demogorgon47 : And when the global financial collapse happens revolution will most likely begin. Millions will die from lack of resources and warfare. People will be calling for the heads of the douchebags that enacted the ridiculous federal reserves that corrupted the whole fucking system to begin with. Reserve banks are the cancer in the system. Loaning the people the nation's currency at interest in a huge fucking mistake. A robbery of the worst kind and it'll bring the whole system crashing down because a few greedy fucks decided to rob EVERYONE world wide. It's a broken system. Either replace it with a resource based economy or hold the greedy fucks accountable. Oh that's right they've got everyone in their pocket so they're untouchable. Fucking bullshit. Why is it no one listens to voice of reason? If people did so maybe we wouldn't be heading towards extinction by greed! My Facebook Page: https://www.facebook.com/AkashVedi.Page My Twitter Page: http://twitter.com/AkashVedi Video : Tequs http://tequs.com Like, Comment and Subscribe to the channel for more interactive updates.
Views: 1838492 Akash Vedi
The Price of a U.S. Credit Rating Downgrade
http://www.downsizinggovernment.org The federal government's debt may soon be downgraded by major credit rating agencies. What would that mean? Video produced by Caleb O. Brown and Austin Bragg
Views: 22751 The Cato Institute
Are U.S. Government Bonds AAA or Junk?…And Who’s Lying?
http://RonPaulLibertyReport.com Streamed live April 27, 2018 The U.S. government is in debt $21 Trillion, an amount that can never be paid. Yet Moody’s and Fitch reaffirmed their top AAA rating on U.S. debt. Why do they do this? Do they have to? Why can’t politicians, the media, CEO’s, or anyone else, ever tell Americans the truth? Liberty Education at http://www.libertyclassroom.com/dap/a/?a=11750 ( history, economics) http://LibertyHowl.com
US Government bonds have been downgrades by Standard & Poors
We talk about the impact of the downgrading of US Government bonds by S&P and look at the implications. Will the interest rate rise in the short run? Unlikely.
Views: 101 Tapen Sinha
Why Did the U.S. Credit Rating Get Downgraded? Standard & Poor's - Financial Services (2011)
The United States debt-ceiling crisis of 2011 was a stage in the ongoing political debate in the United States Congress about the appropriate level of government spending and its consequential impact on the national debt and deficit. The Republican Party, which had retaken the House of Representatives the prior year, demanded that the President negotiate over deficit reduction in exchange for an increase in the debt ceiling, the statutory maximum of money the Treasury is allowed to borrow. Were the United States to broach the debt ceiling and not be able to use other "extraordinary measures", the Treasury would have to either default on payments to bondholders or immediately curtail payment of funds owed to various companies and individuals that had been mandated but not fully funded by Congress. Both situations would likely have led to a significant international financial crisis. On July 31, two days prior to when the Treasury estimated the borrowing authority of the United States would be exhausted, Republicans agreed to raise the debt ceiling in exchange for a complex deal of significant future spending cuts. The crisis did not permanently resolve the potential of future use of the debt ceiling in budgetary disputes, as shown by the subsequent debt-ceiling crisis of 2013. The crisis sparked the most volatile week for financial markets since the 2008 crisis, with the stock market trending significantly downward. Prices of government bonds ("Treasuries"), rose as investors, anxious over the dismal prospects of the US economic future and the ongoing European sovereign-debt crisis, fled into the still-perceived relative safety of US government bonds. Later that week, the credit-rating agency Standard & Poor's downgraded the credit rating of the United States government for the first time in the country's history, though the other two major credit-rating agencies, Moody's and Fitch, retained America's credit rating at AAA. The Government Accountability Office (GAO) estimated that the delay in raising the debt ceiling increased government borrowing costs by $1.3 billion in 2011 and also pointed to unestimated higher costs in later years. The Bipartisan Policy Center extended the GAO's estimates and found that delays in raising the debt ceiling would raise borrowing costs by $18.9 billion. Throughout 2011, Standard & Poor's and Moody's credit rating services issued warnings that US debt could be downgraded because of the continued large deficits and increasing debt. According to the CBO's 2011 long-term budget outlook, without major policy changes the large budget deficits and growing debt would continue, which "would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment -- which in turn would lower income growth in the United States." The European sovereign debt crisis was occurring throughout 2010--2011, and there were concerns that the US was on the same trajectory. In a report issued by the credit rating agency Moody's, analyst Steven Hess suggested that the government should consider getting rid of the limit altogether, because the difficulty inherent in reaching an agreement to raise the debt ceiling "creates a high level of uncertainty" and an increased risk of default. As reported by The Washington Post, "without a limit dependent on congressional approval, the report said, the agency would worry less about the government's ability to meet its debt obligations."[86] Other public figures, including Democratic ex-President Bill Clinton and Republican ex-CBO director Douglas Holtz-Eakin, have suggested eliminating the debt ceiling. http://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis_of_2011
Views: 1138 The Film Archives
Types of Debt Securities
Discover different types of debt instruments, including Government securities, Government agencies, municipal bonds, and corporate bonds. This educational video is part of Zions Direct University's Beginner series. Questions or Comments? Have a question or topic you’d like to learn more about? Let us know: Twitter: @ZionsDirectTV Facebook: www.facebook.com/zionsdirect Or leave a comment on one of our videos. Open an Account: Begin investing today by opening a brokerage account or IRA at www.zionsdirect.com Bid in our Auctions: Participate in our fixed-income security auctions with no commissions or mark-ups charged by Zions Direct at www.auctions.zionsdirect.com
Views: 48647 Zions TV
Credit risk in bonds
Credit risk in bonds I've tried to emphasize interest rate risk when you invest in bonds because many people don't understand this risk even though it's probably the biggest risk facing today's bond investor. But almost everyone understands credit risk. Credit risk is the risk that the issuing company or government can't meet the promised interest or principal payments. US Treasuries face least credit risk In this case, US Treasury bonds and mortgage securities called Ginnie Maes offer the highest credit ratings. These securities are backed by the "full faith and credit" of the US government. Government agency securities After US Treasuries and Ginnie Maes come debt issued by quasi-governmental agencies like the Federal Home Loan Mortgage Corporation also known as Freddie Mac. Although debt issued by these corporations does not carry the explicit backing of the US government, most bond traders believe the government will back up the companies if their bankruptcy is threatened. Blue chip corporations Next comes the debt of large, blue chip corporations like General Electric. This debt is normally called investment grade debt. Debt issued by large corporations is normally rated by independent companies like Moody's, and Standard & Poors. These companies do extensive research into the issuing company's ability to repay their bonds. Hierarchy of claims Before we jump further down into junk bonds, we should spend a little time talking about the hierarchy of claims on a company's assets and see what happens if a company files or is forced into bankruptcy. According to the US Constitution, bankruptcy proceedings are handled by federal law. US bankruptcy laws were rewritten in 1978 to change the traditional pecking order of those who can make claims against a bankrupt company. Lawyers and the IRS are highest Highest on the pecking order is the bankruptcy lawyers. Lawyers write the laws, so it shouldn't be too surprising that they want to get paid for their efforts as they try to dole out the company's assets. Next comes the IRS, then the firm's employees and their pension funds. After them come the company's secured creditors. These creditors have loaned the company money, but the loan is secured by a mortgage on a piece of real property like a building or heavy equipment. Most blue chip debt is unsecured Although secured debt is common for smaller companies, the majority of blue chip corporate debt is unsecured debentures. Here the lender only has the promise that the firm will honor its debt. This is similar to unsecured credit card debt that most consumers carry. However, there are several levels of unsecured debt. So-called senior debt holders are paid off before junior or subordinated debt holders. Unsecured creditors also include the suppliers who provided the company with merchandise. After the junior debt holders come the preferred stockholders. Finally, if there's any money left, the common stockholders receive compensation for their ownership in the company. Chapter 11 and 7 bankruptcy There are two forms of corporate bankruptcy, named for sections in the federal law which govern their policies. One is Chapter 11, and this type appears in the news most often. In this case, the company continues operation, but it receives a temporary reprieve from its creditors while it works out a debt repayment plan. The second is Chapter 7. In this more extreme case, the company is liquidated and assets are sold off to satisfy creditors. A company can be forced into bankruptcy by its creditors if the company fails to meet its obligations. The company also voluntarily can choose to file for bankruptcy. Once in bankruptcy, a federal court plays a major role in the handling of claims. Typical bankruptcy reorganization Although it's difficult to generalize about bankruptcy proceedings, if a company files for bankruptcy, and then later re-emerges as an operating company, the old creditors and shareholders have their claims shifted down one level in the claims hierarchy. For example, the old senior debt holders become junior creditors, the old junior debt holders become stockholders and the old stockholders lose everything or perhaps get some equity warrants. Ratio analysis for credit worthiness To avoid the unpleasantness of bankruptcy, bond investors and independent rating agencies analyze a company's financial condition. Typically, investors look at various ratios to see if the firm is a good risk. One of the most common ratios is the firm's current ratio. Current ratio Times interest earned ratio Debt to equity ratio Copyright 1997 by David Luhman
Views: 1014 MoneyHop.com
Latest Business News: Foreigners Flee From U.S. Government Bonds in April: Treasury
Foreigners flee from U.S. government bonds in April: Treasury Foreign investors dumped U.S. government debt in April and were net sellers of all long-dated U.S. securities for the third consecutive month, the U.S. Treasury said. http://news.yahoo.com/foreigners-flee-u-government-bonds-april-treasury-152924806.html IMF urges repeal of 'ill-designed' U.S. fiscal cuts The International Monetary Fund urged the United States to repeal sweeping federal budget cuts that will be a severe drag on economic growth this year. Instead, the IMF suggests the US to adopt a plan to slow the growth in spending on government-funded health care and pensions, known as "entitlements." http://feeds.reuters.com/~r/news/economy/~3/X25M6O3cmtk/story01.htm JPMorgan's private equity unit to become independent In the latest move by a financial institution to shed risky businesses amid financial reform, JPMorgan Chase & Co said its private equity unit will become independent, and will raise its next investment fund externally rather than through JPMorgan. http://feeds.reuters.com/~r/reuters/businessNews/~3/vq_3V194l-g/story01.htm http://www.wochit.com
Views: 40 Wochit Business
Italy easily sells bonds despite ratings downgrade
http://www.euronews.com/ The Italian government has shown that it is still able to borrow money at affordable rates of interest, despite getting a further thumbs down from the Moody's ratings agency. Just hours after a further downgrade from Moody's, Rome was able to sell 5.25 billion euros worth of government bonds. Friday's cut by the US agency to Baa2, to just two notches above junk status, was criticised by the Italian Industry Minister Corrado Passera. He said: "The Moody's judgement is altogether unjustified and even misleading because it does not take into account all the efforts that our country is making." International demand for Rome's bonds is low but Italian banks are buying them. The bulk of those sold on Friday are due to mature in three years time. The interest rate that Italy had to offer on those was down at 3.6 percent in May, it hit 5.3 percent in June and has now slipped down to 4.65 percent. Moody's said it was lowering Italy's sovereign debt rating because of doubts over the country's long-term resolve to push through much-needed reforms - with the economy forecast to shrink two percent this year - and fears about Spain's problems spreading to Italy. The agency praised Prime Minister Mario Monti's commitment to fiscal reforms and structural consolidation. But warned it could again cut the country's marks if the next Italian government failed to continue along this path. "The negative outlook reflects our view that risks to implementing these reforms remain substantial. Adding to them is the deteriorating macroeconomic environment, which increases austerity and reform fatigue among the population," it said. "The political climate, particularly as the spring 2013 elections draw near, is also a source of implementation risk." The European Commission, which has so far mostly refrained from commenting on rating actions on individual eurozone countries, queried the timing of Moody's downgrade while backing the steps Italy has taken address its structural weaknesses. "I do think one can legitimately and seriously question the timing of it, whether the timing was appropriate," Commission spokesman Simon O'Connor told a regular briefing. Find us on: Youtube http://bit.ly/zr3upY Facebook http://www.facebook.com/euronews.fans Twitter http://twitter.com/euronews
Bond Futures: How to Trade Bond Futures | Bond Futures Trading Strategies tutorial - Jonathan Rose
Let me show the Correct Way to Trade Bond Futures Learn how to Trade Bond Futures. DONT MISS YOUR FREE WEEK https://goo.gl/RXhLnY .This is Bond Futures Trading Strategies tutorial. What is Bond Futures? Although the stock market is the first place in which many people think to invest, the U.S. Treasury bond markets arguably have the greatest impact on the economy and are watched the world over. Unfortunately, just because they are influential, doesn't make them any easier to understand, and they can be downright bewildering to the uninitiated. At the most basic level, a bond is a loan. Just as people obtain a loan from the bank, governments and companies borrow money from citizens in the form of bonds. A bond really is nothing more than a loan issued by you, the investor, to the government or company, the issuer. For the privilege of using your money, the bond issuer pays something extra in the form of interest payments that are made at a predetermined rate and schedule. The interest rate often is referred to as the coupon, and the date on which the issuer must repay the amount borrowed, or face value, is called the maturity date. One wrinkle in the equation, though, is that not all debt is created equal with some issuers being more likely to default on their obligation. As such, credit rating agencies evaluate companies and governments to give them a grade on how likely they are to repay the debt (see "Good, better, best"). Benji Baily and Delmar King, fixed income investment managers at Everence Financial, say ratings generally can be classified as investment grade or junk. "Anything that's considered to be an investment grade, you would have a fairly high probability that you're going to get your money back at maturity," King says. "Of course, the lower you go down the credit spectrum, the more risk there is of default and the possibility that you could have losses. Therefore, the lower the security grade you have, the more yield compensation you should have for taking that default risk." So, if you purchased a 30-year U.S. Treasury bond (currently AA+ from S&P and AAA from Moody's and Fitch) for $100,000 with a coupon rate of 6%, then you could expect to receive $6,000 a year for the duration of the bond and then receive the face value of $100,000 back. At least, that's how a bond would work if you held it to maturity. Rather than hold a bond to maturity, they also can be traded. But, as a bond is traded, interest rates can change, so the overall value of the bond can change. "If you bought a bond that has a 10% coupon and the rest of the market is fine with owning a 1% coupon, then someone is going to love to have that 10% coupon until maturity," Baily says. "Conversely, if you have a 1% bond and everyone else is expecting that the market in general will be at 10%, then you're going to need to pay someone a lot of money to take that 1% bond instead of buying a new 10% bond." Because coupon rates generally are fixed, to adjust for future expectations the price of the bond or note has to move up or down. If yields, the interest or dividends received on a security, go up, the price will fall to accommodate that higher yield; if yields go down, then price has to go up. GRAB YOUR FREE WEEK HERE https://goo.gl/RXhLnY Nayeem Talukder, [15.01.18 06:29] 5 Secret Tips Options Trading: How To Trade Stock Options: https://www.youtube.com/watch?v=-2v-LrBoFWA 5 Secret Tips to Trade Stock Options During Earnings Season - options for beginners https://www.youtube.com/watch?v=awbh33LxYXk How to trade stock options Playlist: https://www.youtube.com/watch?v=awbh33LxYXk&list=PLR_XM0ZsTUySgd3JmlvNv0xosYVz5iAcr SUBSCRIBE FOR STOCK OPTION EDUCATION AND TRADE IDEAS! https://www.youtube.com/channel/UCa5hPmX8-q03fxDYLi9XM7w SUBSCRIBE TO OUR EMAIL LIST http://activedaytrader.com LETS CONNECT http://facebook.com/activedaytrader Email me anytime: [email protected] analysis options for beginners technical analysis options strategies Tending search on youtube: #stockOptions #howtotradestockoptions #tradingStrategies #tradingOptions #BondFutures #BondFuturesStrategies pairs trading jonathan rose
Views: 7451 Jonathan Rose
EU slams US credit rating 'oligopoly'
While the US finds itself in danger of a credit ratings downgrade due to a national debt crisis, a number of European countries have seen their status fall even further. Stand & Poor's, Moody's and Fitch - the three largest US-based credit rating agencies - have been criticised by European policymakers who say they have been too quick to downgrade indebted EU states during the euro zone debt crisis. Rainer Bruederle, the head of German Chancellor Angela Merkel's coalition partners in parliament, has put forward a proposal on Friday to to launch a privately funded, independent European agency to break the dominance of the three main US houses, according to Handelsblatt, a German newspaper. "Trust in the statements of the opinion-oligopoly of the three largest U.S. agencies is one of the reasons that risks in financial markets became known too late," the business daily quoted him as saying. Nadim Baba reports from London, the UK capital.
Views: 3944 Al Jazeera English
Types of Bonds, Bond Ratings
Join the course on introduction to investments on http://symynd.com/. Topic covered: Interest Rates, Corporate Bonds, Government Bonds, Mortgage-Backed Securities, interest & repayment of principal, corporate bonds, municipal bonds, Federal government bonds (a.k.a. Treasury bonds, T-bonds, "Treasuries"), trust indenture (a.k.a. bond indenture, indenture), trustee, protective covenants, convertible bonds (more about convertibles later), inverse relationship of bond prices and interest rates, when interest rates fall, bond prices rise -- when interest rates rise, bond prices fall, bonds versus stocks, risks: interest rate risk, purchasing power risk, business / financial risk, liquidity risk, call risk (prepayment), nominal rate (a.k.a. "coupon rate") versus current yield versus yield to maturity, face value (a.k.a. par value, normally $1,000 denominations), maturity dates, term bonds versus serial bonds versus sinking fund, bonds versus notes, call provision, call premium, put provision (unusual), par value (a.k.a. "par") versus premium versus discount, Treasury Bonds & Notes (versus Treasury Bills), TIPs -- Treasury Inflation-Indexed Obligations, agency bonds (examples: Fannie Mae, Freddie Mac, Ginnie Mae, Sallie Mae), mortgage bonds (a.k.a. mortgage-backed bonds, mortgage-backed securities), collateralized mortgage obligations, municipal bonds (general obligation bonds -- "GO's", revenue bonds, special tax bonds), tax-exempt yield and taxable equivalent yield , corporate bonds, senior bonds versus junior bonds, debentures versus subordinated debentures, income bonds, zero-coupon bond, "junk bonds" (a.k.a. high yield bonds), foreign bonds, bond ratings, bond trading and bond quotes
Views: 1516 symynd
S&P downgrades US credit rating (Dow Jones)
http://www.StockMarketFunding.com S&P downgrades US credit rating (Dow Jones). China tells US "good old days" of borrowing are over. Standard & Poor's cut the U.S. long-term credit rating from top-tier AAA by a notch to AA-plus on Friday over concerns about the nation's budget deficits and climbing debt burden. "US Government Debt AAA" "US Government Debt AA" "US Government Debt downgrade" "us debt downgrade" "S&P downgrades us debt" "S&P downgrades united states debt"S&P US debt downgrade" "us double dip recession" "double dip" "us recession" "US loses AAA rating at S&P" "President Barack Obama" "White House" "Wall Street" "US Government" "AAA credit rating" "US AAA credit rating" " US AA credit rating" "Standard & Poor's downgrade of the U.S. credit rating" "U.S. Federal Reserve" Greece Italy Spain Portugel "economic crisis" G7 Britain, Canada, France, Germany, Italy, Japan and the U.S. "American economy" "central banks" "United States Treasury bonds" "CreditWatch with negative implications" "US bonds" "US treasuries" "united states economy" "economic outlook" "market commentary" "stock market" "economic analysis" "day trading" "swing trading" "market analysis" "Gerald Celente" "Ron Paul" "Peter Schiff" "Alex Jones" "Marc Faber" "Ben Bernake" "Tim Geithner" "gold prices" "silver prices" "stock market analysis" "us economic outlook" "economic collapse"
Views: 1452 FreeOptionTrader.com
BREAKING: U.S. Credit Rating Downgraded by S&P!
My view on the S&P downgrading the U.S. AAA credit rating on Aug. 05th, 2011. S&P downgrades U.S. credit rating for first time http://www.washingtonpost.com/business/economy/sandp-considering-first-downgrade-of-us-credit-rating/2011/08/05/gIQAqKeIxI_print.html
Views: 8053 DEMCAD
Ratings agency Moody's affirms investment grade credit
Ratings agency Moody's affirmed South Africa's government bond long and short term ratings and assigned a negative outlook. The investment grade credit rating affirmation marks an end to the review period that started on 8 March 2016, when Moody's placed the country's ratings under review for possible downgrade. Moody's noted that South Africa is approaching a turning point after several years of falling growth and that the 2016/17 budget and medium term fiscal strategy, will likely stabilise and eventually reduce general government debt.
Views: 111 CGTN Africa
Does U.S. debt matter? | CNBC Explains
U.S. government debt stands at more than $21 trillion. Does it matter? CNBC’s Elizabeth Schulze explains. ----- Subscribe to us on YouTube: http://cnb.cx/2wuoARM Subscribe to CNBC Life on YouTube: http://cnb.cx/2wAkfMv Like our Facebook page: https://www.facebook.com/cnbcinternational Follow us on Instagram: https://www.instagram.com/cnbcinternational/ Follow us on Twitter: https://twitter.com/CNBCi
Views: 308886 CNBC International
Greenspan: "The United States can pay any debt it has because we can always print money to do that"
August 7, 2011 David Gregory: "Are U.S. treasury bonds still safe to invest in?" Alan Greenspan: "Very much so. This is not an issue of credit rating, the United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default." https://www.realclearpolitics.com/video/2011/08/07/greenspan_us_can_pay_any_debt_it_has_because_we_can_always_print_money.html https://www.cnbc.com/id/44051683 http://www.nbcnews.com/id/44050464/ns/meet_the_press-transcripts/t/meet-press-transcript-august "Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. They can discount loans and other assets of banks or other private depository institutions, thereby converting potentially illiquid private assets into riskless claims on the government in the form of deposits at the central bank. That all of these claims on government are readily accepted reflects the fact that a government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit. To be sure, if a central bank produces too many, inflation will inexorably rise as will interest rates, and economic activity will inevitably be constrained by the misallocation of resources induced by inflation. If it produces too few, the economy's expansion also will presumably be constrained by a shortage of the necessary lubricant for transactions. Authorities must struggle continuously to find the proper balance." Alan Greenspan: Central Banking and Global Finance (January 14, 1997) https://www.federalreserve.gov/boarddocs/speeches/1997/19970114.htm "As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational. Moreover, there will always be a market for U.S. government debt at home because the U.S. government has the only means of creating risk-free dollar-denominated assets (by virtue of never facing insolvency and paying interest rates over the inflation rate, e.g., TIPS—Treasury Inflation-Protected Securities)." St. Louis Fed: Why Health Care Matters and the Current Debt Does Not http://www.stlouisfed.org/publications/re/articles/?id=2157
Views: 981 wonkmonk
3 Reasons Why You Should Not Pay Your Debt
Paying off an old collection or charge off will increase your credit score. This is a huge MYTH! Effects of Paying When you pay an older collection account or charge-off account, your credit score most likely will suffer. Think twice before paying off an old collection or charge off. By paying your debt, it renews the date of last activity. The collection company or creditors can now report the account for another 7 years. Everyone knows debt collections are bad for your credit score. Any past due accounts including debt collections have negative effects. These accounts report on your credit report for up to7 years. As accounts age, they have less and less impact on your credit score. Many consumers believe by paying off collections or charge-off accounts, that it will raise their credit scores. It certainly seems logical; however it is far from the truth. If you are concerned about your credit score, paying off debts prior to obtaining any other type of loan or mortgage can greatly hurt your credit score. Ultimately, if it is an older account when paid off (or payments are made on the account), by doing so can be devastating to ones credit score. The recent activity of any derogatory item has a big impact on how it effects your overall credit score. Is the Debt Still Valid? After a certain period of inactivity on an account, a debt becomes time-barred and debt collectors can no longer sue you for it. This period is known as "the statute of limitations on debt" and varies by state. If the statute of limitations has passed, it is illegal for a debt collector or creditor to sue you. You need to be careful in communicating with a debt collector because the debt statute of limitations can easily be restarted by acknowledging that you owe the debt, making a payment, entering a payment plan, making an agreement to pay or making a charge on the account. After 7 Years Collection and charge-off accounts should only remain on your credit report for 7 years. It is important to check your credit reports as the credit bureaus often continue reporting these derogatory accounts over the 7 year limit. If you have any questions regarding collection accounts on your credit reports, call our office today for your complimentary credit consultation. We look forward to hearing from you. 480-502-5554 LEGAL DISCLAIMER: The advice provided is for informational purposes only. It is not to be construed as Legal Counsel or Legal Advice.
Views: 421676 911creditpros
What is the impact of a downgrade in the credit rating of US Treasury securities?
Q&A Session, featuring Ron C. Dugan, CFA, Vice President and Global Investment Strategist at GuideStone Capital Management.
Views: 145 GuideStone
U.S. Credit Downgrade From China's Credit Rating Agency Dagong
The U.S. just had a credit rating downgrade from Dagong china's Credit Rating Agency. The fact that the U.S. Dollar is so fragile was listed as a point of concern. The also echoed the statements of moodys saying tax cuts will put more pressure on debt obligations.
Views: 3594 Silver Report Uncut
Won't A Credit Downgrade Raise The Government's Interest Rate?
Amar Reganti, former Deputy Director of the Office of Debt Management at the U.S. Department of the Treasury, discussing the results of a downgrade by credit rating agencies on the debt of a government with a sovereign currency. He has a particularly unique perspective because he was actually working at the Treasury Department at the time that the United States was downgraded. The conventional logic goes like this: a borrower is associated with the risk they might not pay back, their credit risk. Creditors will evaluate this risk, and adjust the interest rate they charge borrowers accordingly: if the risk is high, the lender will want to be compensated with a higher interest rate. So if your debt gets too large or a credit agency downgrades your debt, this lowers the evaluation of your creditworthiness, and should result in increased borrowing costs, meaning higher interest rates it must pay to borrow. In fact, not only is this the logic, but you can actually see it happen: when businesses get downgraded, or individuals get their credit score lowered, their costs increase. Heck, it even happened to Greece! And the danger is that as interest rates go up, interest costs go up, further weighing on revenue. Eventually the country might get to the point where it's tax revenue isn't even enough, and it's forced to borrow to cover the cost of interest, and at that point it's the kiss of death: the debt will explode up and the country will be forced to default. Goodbye. Or is it? See, something interesting happened in the US after it got downgraded. And the same thing happened in Japan, and in the UK: its interest rate went DOWN, not up. In fact, even as Japan has an unprecedented run-up in debt, at 245% of GDP as of January 2017, it's interest rates have been trending only downward. What's going on here? In fact, there's an important difference between a household, business or Greece, vs. the US and Japan: the US and Japan issue their own currency, and only have debt in that currency. That means they can never become unable to pay, and to make good on the promise on the debt. Investors know this. If they buy a US Treasury bond, they're not 'lending money to somebody who needs it to spend.' They are swapping their currency, a government issued asset, back to the government in exchange for a different asset, a Treasury bond. A Treasury bond is the safest, most liquid form for US dollars to exist in, and they pay interest! This creates a high demand for them, that won't go away. That being the case, the central bank has all the power over all the interest rates, being the monopoly issuer of the currency. It can set its target rate anywhere it wants, and it can target any rate along the yield curve to be any rate it wants, no matter what market investors say. This is what life is like if you're the monopolist. In fact, even in the absence of the central bank targeting a long-term interest rate, the long-term rates tend to move along with the short-term rate that the central bank does directly target. This is due to arbitrage (the 'expectations hypothesis of the term structure'), which keeps the rates closely linked. See another former Treasury Department insider explain why there will always be demand for US Treasury, here: https://www.youtube.com/watch?v=EMEhE-WJFQA Learn a little more about Japan's interest rate targeting: http://bilbo.economicoutlook.net/blog/?p=34830 Watch the whole talk here: https://www.youtube.com/watch?v=EyBhU19pD3k Follow Deficit Owls on Facebook and Twitter: https://www.facebook.com/DeficitOwls/ https://twitter.com/DeficitOwls
Views: 693 Deficit Owls
Cash U.S. Government Securities vs. Treasury Futures - Part II (Jul 2012, 54:26)
Frederick Sturm, Director, CME Group. www.advantagefutures.com @FuturesNews [email protected]
Views: 303 AdvantageFutures
U.S. Credit Rating Downgraded
Calling the recent deficit-reduction deal inadequate, Standard & Poor's downgraded the U.S. long-term sovereign credit rating to AA+ from its top rank of AAA. CNNMoney reports. -~-~~-~~~-~~-~- Please watch: "Wood Stoves and Fire places are being banned" https://www.youtube.com/watch?v=ZOLU-a0wbWk -~-~~-~~~-~~-~-
Views: 3119 PastorDowell
Ratings agency Moody's affirms investment grade credit
Ratings agency Moody's affirmed South Africa's government bond long and short term ratings and assigned a negative outlook. The investment grade credit rating affirmation marks an end to the review period that started on 8 March 2016, when Moody's placed the country's ratings under review for possible downgrade. Moody's noted that South Africa is approaching a turning point after several years of falling growth and that the 2016/17 budget and medium term fiscal strategy, will likely stabilise and eventually reduce general government debt.
Views: 344 CGTN Africa
Explaining Bond Prices and Bond Yields
​In this revision video we work through some numerical examples of the inverse relationship between the market price of fixed-interest government bonds and the yields on those bonds. ​Government bonds are fixed interest securities. This means that a bond pays a fixed annual interest – this is known as the coupon The coupon (paid in £s, $s, Euros etc.) is fixed but the yield on a bond will vary The yield is effectively the interest rate on a bond. The yield will vary inversely with the market price of a bond 1.When bond prices are rising, the yield will fall 2.When bond prices are falling, the yield will rise - - - - - - - - - MORE ABOUT TUTOR2U ECONOMICS: Visit tutor2u Economics for thousands of free study notes, videos, quizzes and more: https://www.tutor2u.net/economics A Level Economics Revision Flashcards: https://www.tutor2u.net/economics/store/selections/alevel-economics-revision-flashcards A Level Economics Example Top Grade Essays: https://www.tutor2u.net/economics/store/selections/exemplar-essays-for-a-level-economics
Views: 50331 tutor2u
Krannert Professor of Economics on Debt Ceiling and Bond Credit Rating
Krannert School of Management Interim Dean and Professor of Economics, Jerry Lynch, explains how the debt ceiling could potentially impact the United States' bond rating. Lynch also discusses the potential for US default and the threat of inflation or hyperinflation.
Views: 1036 Purdue University
Markets Mayhem: Asia stocks plummet on US rating downgrade
Asian stocks tumbled early on Monday, kicking of what is a string of torrid trading around the globe. It follows last week's rout and is on the back of America getting its credit rating cut, as well as the Eurozone's debt wound that refuses to heal. RT's Priya Sridhar is in Asia's third largest economy, India, with the latest outlook.
Views: 25900 RT
Shock Wave Coming: 'Gold & currencies basket to substitute US dollar'
Higher borrowing costs, weakening business and consumer confidence as well as slimmer chances of recovery - it's the potential ripple effect for the United States, after its top-tier AAA credit rating was cut by one notch. Standard & Poor's took the unprecedented move of dropping America's ranking to AA+ in its outlook. White House officials are on the defensive - saying there's a two-trillion-dollar mistake. S&P admitted that, but is sticking with its decision, which it says is objective. It's despite the last-minute debt deal which narrowly rescued the country from default. But the damage was already done, as the political haggling undermined investors trust. Economist Max Fraad Wolff says brace yourself for a stock market rollercoaster on Monday. RT on Twitter: http://twitter.com/RT_com RT on Facebook: http://www.facebook.com/RTnews
Views: 47251 RT
Manager's Update: AAA Bond Rating
Gilbert, Arizona is pleased to announce that Fitch Ratings has upgraded our 2016 Gilbert Water Resource Municipal Property Corporation, Arizona bonds from AA+ to AAA. Fitch says the upgrade “reflects the systems rapidly declining debt burden” and that the town’s ability to continue to “manage the area’s rapid growth will be the key to maintaining the high AAA rating.
Views: 61 Gilbert Digital
Is the AAA Rating of U.S. Bonds at Risk?
All Things Money #19 Part 2: David Blain of D. L. Blain & Co., discusses the rating risk of U.S. bonds and the rest of the global bond market. He also begins a discussion of recent changes to the tax code.
Moody's Lowers China Outlook over Local Debt and Lending Risks
China's burgeoning local government debt and shady underground lending banks continue to pose a risk to the country's economy. Today, Moody's Investors Services lowered its outlook for the Chinese economy from positive to stable. In a statement, Moody's said high borrowing by China's local government and growing bank lending were sources of concern. These were the same reasons given by Fitch Ratings last week, when it cut China's long-term currency credit rating from AA-minus to A-plus. According to the head of China's National Audit Office, China's local and central governments owed up to 18 trillion yuan, or around $3 trillion US dollars at the end of 2012. Moody's said Chinese authorities have not done enough to reduce the risks associated with local government contingent liabilities by improving transparency. Other reasons for lowering China's economic outlook include a, quote, "significantly greater-than-expected slowdown in economic growth." China's official GDP for the first quarter of this year missed market expectations, and also fell from the previous quarter. Moody's kept its rating for China's government bonds at AA3. That rating isn't expected to go up over the next 12 to 18 months. The agency said while structure reforms are expected to improve credit, the scope and pace isn't enough to justify a ratings upgrade. Moody's also said China's credit ratings would face pressure from a deterioration in government finances, coupled with a rise in social unrest. The agency warned against the risk of shadow banking, saying authorities need to ensure it doesn't destabilize the financial system. Subscribe to NTDonChina ☛ http://www.youtube.com/subscription_c... For more news and videos visit ☛ http://ntd.tv Follow us on Twitter ☛ http://twitter.com/NTDTelevision Add us on Facebook ☛ http://on.fb.me/s5KV2C
Views: 526 NTDonChina
China threatens US over "debt limit" "gov shutdown"?
China, the biggest foreign creditor of -READ- the United States, -READ-: has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.. http://www.independent.co.uk/news/world/americas/get-your-fiscal-house-in-order-china-warns-us-as-asias-expresses-concern-for-13tn-of-investments-8864935.html The Chinese Vice Foreign Minister, Zhu Guangyao, told America's deadlocked politicians that "the clock is ticking" and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.. "We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States," Mr Zhu told reporters in Beijing. "This is the United States' responsibility," he added.. The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching "debt ceiling" deadline. Yet rather than indicating a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was "time for us to stand and fight" over the budget. He added that a default was "the path we're on". American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.. In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.. These vast foreign exchange holdings are a by-product of China's closed financial system and persistent current account surplus, which means that most foreign currency that enters the country accumulates with the central bank. The central bank then invests the money in normally "safe" dollar assets. The vast dollar reserves are also a legacy of China's policy in recent decades of artificially holding down the value of its currency, the renminbi, in order to boost the overseas sales of its politically influential export industry.. However, economists have criticised the popular idea that China could exert political or economic leverage over Washington by threatening to sell its dollar investments, since such a drastic shift would ultimately serve to undermine the paper value of Beijing's own vast investment portfolio. Nevertheless, China's creditor position and its status as the world's second largest economy gives its voice some authority in Washington and Mr Zhu made it clear that private representations had already been made. "The US is clearly aware of China's concerns about the financial stalemate and China's request for the US to ensure the safety of Chinese investments," he said.. Since the global financial crisis, which led to a sharp depreciation in the value of the dollar against the renminbi, the authorities in Beijing have been concerned about the fact that so much of their national reserves are held in the form of the American currency. China has been promoting the idea of a new reserve currency to replace the greenback, with some analysts suggesting that the renminbi could one day take its place.. Mr Zhu stressed that it was vital, not only for China but the wider global economy, for America to resolve its budget impasse. "Safeguarding the debt is of vital importance to the economy of the US and the world," he said. Referring to a similar deadlock in 2011, which led to a downgrade of the US AAA credit rating by the Standard & Poor's agency, Mr Zhu said: "We hope the United States fully understands the lessons of history".. The concerns over the stability of the dollar come at a time of geo-political flux. Barack Obama has sought to "pivot" his foreign policy to Asia to counter China's growing military influence. But the shutdown has forced the US President to cancel his visit to Asia to attend a summit.. NORTHCOM to DHS preparing or "civil unrest". "Martial law in the streets if we don't sign the bail out" Congress. Exec orders for "governors council" to "rural council" ..enjoy
What is HIGH YIELD DEBT? What does HIGH YIELD DEBT mean? HIGH YIELD DEBT meaning & explanation
What is HIGH YIELD DEBT? What does HIGH YIELD DEBT mean? HIGH YIELD DEBT meaning - HIGH YIELD DEBT definition - HIGH YIELD DEBT explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors. Sometimes the company can provide new bonds as a part of yield which can only be redeemed after its expiry or maturity. The holder of any debt is subject to interest rate risk and credit risk, inflationary risk, currency risk, duration risk, convexity risk, repayment of principal risk, streaming income risk, liquidity risk, default risk, maturity risk, reinvestment risk, market risk, political risk, and taxation adjustment risk. Interest rate risk refers to the risk of the market value of a bond changing due to changes in the structure or level of interest rates or credit spreads or risk premiums. The credit risk of a high-yield bond refers to the probability and probable loss upon a credit event (i.e., the obligor defaults on scheduled payments or files for bankruptcy, or the bond is restructured), or a credit quality change is issued by a rating agency including Fitch, Moody's, or Standard & Poors. A credit rating agency attempts to describe the risk with a credit rating such as AAA. In North America, the five major agencies are Standard & Poor's, Moody's, Fitch Ratings, Dominion Bond Rating Service and A.M. Best. Bonds in other countries may be rated by US rating agencies or by local credit rating agencies. Rating scales vary; the most popular scale uses (in order of increasing risk) ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, with the additional rating D for debt already in arrears. Government bonds and bonds issued by government-sponsored enterprises (GSEs) are often considered to be in a zero-risk category above AAA; and categories like AA and A may sometimes be split into finer subdivisions like "AA-" or "AA+". Bonds rated BBB- and higher are called investment grade bonds. Bonds rated lower than investment grade on their date of issue are called speculative grade bonds, or colloquially as "junk" bonds. The lower-rated debt typically offers a higher yield, making speculative bonds attractive investment vehicles for certain types of portfolios and strategies. Many pension funds and other investors (banks, insurance companies), however, are prohibited in their by-laws from investing in bonds which have ratings below a particular level. As a result, the lower-rated securities have a different investor base than investment-grade bonds. The value of speculative bonds is affected to a higher degree than investment grade bonds by the possibility of default. For example, in a recession interest rates may drop, and the drop in interest rates tends to increase the value of investment grade bonds; however, a recession tends to increase the possibility of default in speculative-grade bonds.
Views: 142 The Audiopedia
California State Government Debt - The Facts
This video presents an overview of the State of California's current debt situation. Learn about California's State Bond ratings, the amount of California's Bond Debt, where bond money is being spent and more. VIDEO CONTENTS: 1. (1:12) General Fund G.O. Bond Interest & Redemption Costs 2. (2:12) ( General Fund G.O. Bond Interest & Redemption Costs (Chart) 3. (2:49) California’s Task Force on Bond Accountability and Issuance of Bond Debt by Purpose 4. (3:50) State of California’s Current Credit Ratings 5. (4:57) California Municipal Bonds Rating History 6. (5:26) California Debt and Investment Advisory Commission Debt Line Music arranged by Bill Baker :-)
Views: 752 San Bruno Beacon
Why The Ratings Outlook Is Mixed For U.S. GARVEE Bonds
In the past year, bonds backed by direct federal payments for state and local highway and transit programs (known as government anticipation revenue vehicles, or GARVEE, bonds) have had their share of ups and downs, generally related to the federal government's fortunes. Standard & Poor's rates 70% of these bonds in the 'AA' category. However, 40% of the bonds we rate carry negative outlooks. Moreover, we recently revised the outlook to negative on 11 of the 15 bonds rated 'AA'. In this CreditMatters TV segment, Standard & Poor's Analytical Manager Peter Murphy explains what's behind our mixed outlook in 2013. Topics include the "Moving Ahead for Progress in the 21st Century Act" (MAP-21), which extends the Federal-Aid Highway Program funding, and changes to federal flow securitization methodology.
Views: 24 S&P Global Ratings
Investing Basics: Bonds
Bonds are one of the most common investments, but to many investors they’re still a mystery. In this video you’ll learn the basics of bonds and how they might be used by traders looking to preserve capital and pursue extra income.
Views: 166356 TD Ameritrade
What is CREDIT RATING AGENCY? What does CREDIT RATING AGENCY mean? CREDIT RATING AGENCY meaning - CREDIT RATING AGENCY definition - CREDIT RATING AGENCY explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely interest payments and the likelihood of default. An agency may rate the creditworthiness of issuers of debt obligations, of debt instruments, and in some cases, of the servicers of the underlying debt, but not of individual consumers. The debt instruments rated by CRAs include government bonds, corporate bonds, CDs, municipal bonds, preferred stock, and collateralized securities, such as mortgage-backed securities and collateralized debt obligations. The issuers of the obligations or securities may be companies, special purpose entities, state or local governments, non-profit organizations, or sovereign nations. A credit rating facilitates the trading of securities on a secondary market. It affects the interest rate that a security pays out, with higher ratings leading to lower interest rates. Individual consumers are rated for creditworthiness not by credit rating agencies but by credit bureaus (also called consumer reporting agencies or credit reference agencies), which issue credit scores. The value of credit ratings for securities has been widely questioned. Hundreds of billions of securities that were given the agencies' highest ratings were downgraded to junk during the financial crisis of 2007–08. Rating downgrades during the European sovereign debt crisis of 2010–12 were blamed by EU officials for accelerating the crisis. Credit rating is a highly concentrated industry, with the "Big Three" credit rating agencies controlling approximately 95% of the ratings business. Moody's Investors Service and Standard & Poor's (S&P) together control 80% of the global market, and Fitch Ratings controls a further 15%.
Views: 6349 The Audiopedia
30-Year US Treasury Bonds - Bear flag in the making (28 Sep 2017)
Bear flag in the monthly time frame.
Views: 26 Alex Yeo
S&P downgrades Italy's bond rating
Italy's top bankers rushed off to the finance ministry to talk strategy after Standard and Poors lowered the country's bond rating from A plus to A. Anna Matranga reports.
Views: 171 CBS
Rep. Huizenga on the Credit Rating Downgrade
WASHINGTON (AP) -- President Barack Obama sought to distance himself Saturday from the bad news of the nation's first-ever credit-rating downgrade, but lawmakers and presidential candidates showed no such reticence -- trading salvos over who's at fault and why. The president, spending the weekend at Camp David, left it to press secretary Jay Carney to say it's clear Washington "must do better" in tackling soaring deficits and other economic woes. A statement from Carney said talks that produced Tuesday's $2 trillion compromise on raising the U.S. borrowing limit had been too drawn-out and "divisive." But the statement didn't directly address Friday's move by Standard & Poor's to drop U.S. government debt from AAA to AA+, the next level down. While telegraphed by S&P last month, the downgrade still delivered a potentially serious blow to the nation's struggling recovery -- raising the prospect of higher interest rates and fresh falls in stocks after the big selloff of the last two weeks. S&P told investors the deficit accord "falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
Views: 1176 WOOD TV8
U.S. Government News Byte: Foreigners Flee From U.S. Government Bonds in April: Treasury
Foreigners flee from U.S. government bonds in April: Treasury Foreign investors dumped U.S. government debt in April and were net sellers of all long-dated U.S. securities for the third consecutive month, the U.S. Treasury said. http://news.yahoo.com/foreigners-flee-u-government-bonds-april-treasury-152924806.html Edward Snowden, NSA Leaker, Not Welcome In The United Kingdom The British government has warned airlines around the world not to allow Edward Snowden, who leaked information on top-secret U.S. government surveillance programs, to fly to the United Kingdom. A travel alert, dated Monday on a Home Office letterhead, said carriers should deny Snowden boarding because "the individual is highly likely to be refused entry to the UK." http://www.huffingtonpost.com/2013/06/14/edward-snowden-nsa-not-welcome-in-uk_n_3439754.html Rights Group Challenges U.S. Phone Surveillance Program The American Civil Liberties Union said it sued top U.S. government officials to challenge the constitutionality of the NSA's telephone surveillance program, saying it violates rights to free speech and privacy. http://us.rd.yahoo.com/finance/news/rss/story/SIG=15823ldf3/*http%3A//us.rd.yahoo.com/finance/news/topfinstories/SIG=135tpp32n/*http%3A//finance.yahoo.com/news/rights-group-challenges-u-phone-surveillance-program-195735559.html?l=1 http://www.wochit.com
Views: 40 Wochit News
Getting junked  Who rates countries' debt and why it matters !
A major ratings agency has downgraded Greek debt to junk status, further damaging the country's efforts to avoid default and raising doubt over the overall health of the euro. France 24 explains how credit rating agencies work and why they matter. Greek debt is currently worth "junk", the major ratings agency Standard and Poor's told investors on Tuesday. The agency also downgraded Portugal's rating to A-. The financial slur marked the first time a eurozone member lost investment-grade rating since the currency's 1999 debut.Greece cried foul at the downgrade, saying the S&P's move did not correspond with the real data. But few investors were listening to Athens. A dip in market confidence led European and then Asian stocks to plunge Tuesday and Wednesday and sent the euro to one-year lows against the dollar. While Portuguese bonds are still investment grade, some market observers think a junk rating will soon infect Portugal. "Contagion will spread to Portugal, to Spain and to other countries and may lead to a second dip in the world recession," warned Ali Fatemi, a professor at the American Graduate School of Business and Economy in Paris. While a rating expresses one opinion about the quality of a credit issuer, the reaction to the Greek downgrade is evidence that ratings can have sweeping consequences for local and global economies. So who are these agencies and why do their opinions matter so much? Making the grade A credit rating agency, or CRA, is a company that gives its opinion about an institution's ability to pay back loans. The largest and most important CRA's are the US-based companies Standard and Poor's, Fitch and Moody's, which are overseen by the Securities and Exchange Commission in their assignment of credit ratings. The institutions they rate include corporations, local governments and states that issue debt-like securities, such as bonds. The CRA's assign credit ratings, based on tiers that are meant to reflect a company or government's creditworthiness. The junk rating refers to the BB+ rating by S&P. This is the highest speculative grade (the best of risky investments) in S&P's letter-rating system. The highest rating, AAA, reflects an "extremely strong capacity to meet financial commitments", according to S&P, while the lowest D rating is issued for institutions that fail to pay their financial commitments. Greece's current BB+ grade is six notches below the AAA grade. S&P's downgrading of Greece and Portugal tells investors what they might expect if they are holding bonds issued by these counties. A lower rating does not automatically trigger a sell-off of bonds, since investors look at many aspects of a company or country's investment potential. And a high rating does not guarantee that a company or country it will not default on loans. The US-dominated CRA's have been criticized for making high ratings based on the willingness to incorporate US ideas of best business practices and for the lack of transparency in their ratings. But countries can do little to curb their power. Downgrades have the inevitable effect of making potential bond buyers put away their wallets or for bond owners to trade them. This effect is a significant blow to a country like Greece, which will face added pressure from the EU and IMF to balance its budget as a condition for receiving a critical financial aid package. By Luke SHRAGO (video) FRANCE 24 (text)