What Is Happening with Bonds?

All of a sudden, it seems, the long-placid bond market has lurched into action.  Prices have dropped, and as is the way of bond math, yields have risen.  The 10-year treasury note, for instance, has seen its yield more than double, rising from 0.7 percent last fall toward 1.75 percent recently.  Much of what seems to have …

COVID-19 Diary Number 8 (July 14, 2020)

It seems that many people have begun to see the market rally as an opportunity to get out whole, or nearly so, after the frightening losses of late March. They despaired three months ago when stock prices went off a cliff, and now that prices have regained much of the lost ground, they wonder if they …

COVID-19 Diary Number 2 (April 6, 2020)

Though no one can yet say how the virus will continue to develop in the U.S., and therefore how the markets will go, a review of the past few weeks can allow this conclusion (with apologies to Winston Churchill at the end of the Battle of Britain): This is not the end or even the …

Bonds: What Are They and How Do They Work?

The Basics  This post provides essential background on bonds.  A bond is simply a loan from the buyer of the bond to its issuer. When an established company or a government needs to borrow, it doesn’t go to a commercial bank, as an individual or small business would, it hires an investment bank to issue bonds …