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Bonds in sentence

2285 examples of Bonds in a sentence

In short, QE – lowering long-term interest rates by buying long-term bonds and mortgages – won’t do much to stimulate business directly.
But no one should be fooled, even if the Fed holds the bonds to maturity.
During the global financial crisis, even the safety of bank deposits and government bonds was in doubt for some investors.
Whereas equities have dividends, bonds have coupons, and homes provide rents, gold is solely a play on capital appreciation.
The time to buy gold is when the real returns on cash and bonds are negative and falling.
Fifth, some argued that highly indebted sovereigns would push investors into gold as government bonds became more risky.
The first would erupt with a successful speculative attack on a large eurozone country’s bonds, immediately jeopardizing the single currency’s survival.
Second, creditors who stayed in – by swapping old obligations either for new Brady bonds or for local equity – typically did very well.
And the recent spike in the interest-rate spread on Italian government bonds should remind optimists that, with sovereign debt so high, many things can go wrong at any time.
Developing-country governments should also encourage the conversion of such debts to GDP-linked or other types of indexed bonds.
GDP-linked bonds, with coupons and principal that rise and fall in proportion to the issuing country’s GDP, promise to solve many fundamental problems that governments face when their countries’ economies falter.
And, once GDP-linked bonds are issued by a variety of countries, investors will be attracted by the prospect of high returns when some of these countries do very well.
Now an authoritative open-source online handbook just published by the Centre for Economic Policy Research, Sovereign GDP-Linked Bonds: Rationale and Design, explains how governments can do this.
I have been advocating something like GDP-linked bonds for 25 years.
Sovereign GDP-Linked Bonds does just that.
Governments issue GDP-linked bonds to raise funds, just as corporations issue shares.
By issuing such bonds, governments pledge to pay in proportion to the resources they have, measured by their countries’ GDP.
The price-to-GDP ratio of GDP-linked bonds is essentially analogous to the price-to-earnings ratio of corporate shares.
As Sovereign GDP-Linked Bonds argues, the issuance of GDP-linked bonds will create “fiscal space” – a cushion for exigencies – for some countries.
Issuing GDP-linked bonds is akin to buying insurance against economic distress.
And they can achieve the ne plus ultra of diversification by holding GDP-linked bonds from around the world.
We have almost no examples of successful GDP-linked bonds for the same reason we did not see laptop computers until the late 1980s.
What is the seniority ranking of GDP-linked bonds relative to other sovereign debt?
Should GDP-linked bonds be issued in the national currency or in a reserve currency?
As Sovereign GDP-Linked Bonds points out, inflation-indexed debt is even more vulnerable to government cheating, because the monetary incentive for the government is to underreport inflation, which is in line with keeping up appearances.
Debt instruments similar to GDP-linked bonds have been tried, but only when it is already too late: as an emergency component of a post-default restructuring process.
The biggest step forward will come when advanced countries issue GDP-linked bonds in relatively normal times.
A return of real long-term bond yields to their historic level would involve a loss of about 30% for investors in 30-year bonds and proportionately smaller losses for investors in shorter-duration bonds.
Historical experience implies that normalization would raise long-term interest rates by about two percentage points, precipitating substantial corrections in the prices of bonds, stocks, and commercial real estate.
On April 24, the yield on ten-year US Treasury bonds broke 3% for the first time since 2014.
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