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Sovereign Ratings, Default Risk and Markets: The Moody's Downgrade Aftermath!

Musings on Markets

I was on a family vacation in August 2011 when I received an email from a journalist asking me what I thought about the S&P ratings downgrade for the US. Moodys has been rating corporate bonds since 1919 and started rating government bonds in the 1920s, when that market was an active one.

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In Search of Safe Havens: The Trust Deficit and Risk-free Investments!

Musings on Markets

In fact, the standard practice that most analysts and investors follow to estimate the risk free rate is to use the government bond rate, with the only variants being whether they use a short term or a long term rate. where I looked at the possibility that we live in a world where nothing is truly risk free.

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Market Bipolarity: Exuberance versus Exhaustion!

Musings on Markets

We started the year with significant uncertainty about whether the surge in inflation seen in 2022 would persist as well as about whether the economy was headed into a recession. The Markets in the Third Quarter Coming off a year of rising rates in 2022, interest rates have continued to command center stage in 2023.

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Country Risk: A 2022 Mid-year Update!

Musings on Markets

It has been my practice for the last two decades to take a detailed look at how risk varies across countries, once at the start of the year and once mid-year. Country Risk: Default Risk and Ratings For investors, the most direct measures of country risk come from measures of their capacity to default on their borrowings.

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Data Update 3: Inflation and its Ripple Effects!

Musings on Markets

By the end of 2021, it was clear that this bout of inflation was not as transient a phenomenon as some had made it out to be, and the big question leading in 2022, for investors and markets, is how inflation will play out during the year, and beyond, and the consequences for stocks, bonds and currencies.

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Data Update 3 for 2023: Inflation and Interest Rates

Musings on Markets

If 2022 was an unsettling year for equities, as I noted in my second data post, it was an even more tumultuous year for the bond market. The rise in rates transmitted to corporate bond market rates, with a concurrent rise in default spreads exacerbating the damage to investors.

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Data Update 2 for 2023: A Rocky Year for Equities!

Musings on Markets

It is the nature of stocks that you have good years and bad ones, and much as we like to forget about the latter during market booms, they recur at regular intervals, if for no other reason than to remind us that risk is not an abstraction, and that stocks don't always win, even in the long term. at the start of that year.

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