The Bond Market 12/11/2008 14:42
我在自己学习作笔记过程中 oops 。Based on Essentials of Investments.

Is composed of longer-term borrowing or debt instuments, including T-notes and bonds, corporate bonds, municipal bonds, mortgage securities, and federal agency debt.

1. T-notes and Bonds: T-notes maturities range up to 10 years, while T-bonds are issued with maturities ranging from 10 to 30 years. Both are issued in denominations of $1000 or more. Both make semiannual interest payments called coupon payment.

2. TIPS (Treasury Inflation Protected Securities). The principal amount on these bonds is adjusted in proportion to increases in the Consumer Price Index.

3. Federal Agency Debt: gov agencies issue their own secuirites to finance their activities.
Example: The major mortgage-related agencies are the Federal Home Loan Bank (FHLB), the Federal National Morrtgage Association (FNMA, or Fannie Mae), the Government National Mortgage Association (GNMA, or Ginnie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC, ir Freddie Mac).
The last 3 were organized to provide liquidity to the morgage market. Until establishment of the pass-through securities sponsored by these government agencies, the lack of secondary market in mortages made mortage maketes depend on local rather than naitional credit availability. It was the most important financial innovations fo the 1980s. 就是中国人讽刺人说的“太有材了”
Although the debt of federal agecies is not explicitly insured by the Fedgov, it is widely assumed that gov will assist an agency. - considered extremely safe assets.

4. International Bonds

5. Municipal Bonds (munis): issued by state and local governments. They are similar to T-bonds and corporate bonds, except their interest income is exempt from federal income tax. The interest income is also exempt from state and local taxation in the issuing state. Has to pa capital gains taxes.
(1) General obligation bondsL are backed by the 'full faith and credit' (ie, taxing power). (2) revenue bonds are issued to finance particular projects and are backed wither by the revenues from the project or by the municipal agency operating the project. eg. mass turnpike, industrial development bond.
r*(1-t)=Rm (taxible return*(1-tax bracket)=tax-free rate

6. Corporate Bonds: are the means by which private firms borrow money directly from the public. Default Risk differentiates it from the T-bonds.
(1) secured bonds: backed by a specific collateral in the event of bankruptch;
(2) unsecured bonds, called debentures, have no collateral; subordinated debentures have a lower priority claim facing bankruptcy.
Corporate bonds sometimes come with options: callable bonds, convertible bonds etc.
They are rated - Moody's, Standard & Poor's, and Fitch. Bonds with ratings above BAA(Moddy's or Fitch) or BBB (S&P) are deemed "investment grade". Lower rated bonds are called high-yield or junk bonds.

7. Mortgage and Mortgage-backed securities:
Mortgage-backed pass-through securities were introduced by the government Ginnie Mae in 1970. The US gov ensures timely payment of principal and interest even if the borrower defaults on the mortgage. Tush, investors can buy and sell GNMA like any other bond.

Later Fannie Mae and Freddie Mac have become popular. By 2006, $3.8 trillion of outstanding mortgages were securitized into mortgage-back secuiries > $3.1 trillion of coporate bond and closer to $4.6 tillion market in Treasure secuities.

Features of Corporate Bonds:
1. callable or deferred callable bonds: Are issued with higher coupons and promised yields to maturity than noncallable bonds.
2. Convertible bonds: bondholder is given the option to convert to a stipulated number of stocks. For this option, holder accept a lower coupon rate.

Bond price and yields are inversly related.
Treasurey bills are US government-issued zero-coupon bonds with original maturities of up to one year.
Treasury STRIPS are longer term default-free zero-coupon bonds. prices of zero-coupon bonds rise exponentially over time, providing a rate of apprecation equal to the interest rate.


Common Stocks: residual claim and limited liability.
Peferred Stocks: with chars between CS and Bonds. Nonvoting shares in a corp usually paying a fixed stream of dividens.
Dow: priced weighted index, while the others are market-valued weighted.

1.
理财大道上没有闲云野鹤。

先悼念一下。 我哭
Nike at 12/11/2008 15:16 快速引用
Nike :
理财大道上没有闲云野鹤。

先悼念一下。 我哭


哎,我就知道你要出来笑话我。
我知道学了也不会用,学了过几天就忘了。

所以:
1。 我记在这里,证明我曾经学过。 Laughing
2。虽然不会用,但了解概念也好啊 oops 总比我原先眼前一抹子黑好吧?

其次
3。我还抱有幻想,从这里做起,也许经年以后,偶最终能把咱的统计分析能力用在计算投资上?
wildcrane at 12/11/2008 15:24 快速引用
Nike :
理财大道上没有闲云野鹤。

先悼念一下。 我哭


悼念啥? 打你

闲云野鹤偶也要与时具近嘛(好比乔儿要自个儿找婆家) 感动
wildcrane at 12/11/2008 15:27 快速引用
学过是不需要证明的。
rogerlee at 12/11/2008 15:29 快速引用
rogerlee :
学过是不需要证明的。


it supposed to be a joke wink .

严肃地说,有好几个用途:
1。为了看过一边书就记住
2。为了考试
3。为了以后忘了可以顺手来翻一下
4。为了让别人也一起学
5。为了让人为自己懂的人来讨论
6。为了让有的人嘲笑我

Laughing happy
wildcrane at 12/11/2008 15:35 快速引用
Nike :
理财大道上没有闲云野鹤。

先悼念一下。 我哭


狂笑 狂笑 狂笑 你还是直接找婆家得了. 不需要理论分析, 继续做闲云家鹤.
breezy at 12/11/2008 15:55 快速引用
你这种学习精神我还是很 崇拜

不为学的那点知识,open&相对纯净的心态很好 support
emory at 12/11/2008 15:58 快速引用
support 1 and 2
for 3. from small sample, not possible wink
and no need to know the theory.

wildcrane :
Nike :
理财大道上没有闲云野鹤。

先悼念一下。 我哭


哎,我就知道你要出来笑话我。
我知道学了也不会用,学了过几天就忘了。

所以:
1。 我记在这里,证明我曾经学过。 Laughing
2。虽然不会用,但了解概念也好啊 oops 总比我原先眼前一抹子黑好吧?

其次
3。我还抱有幻想,从这里做起,也许经年以后,偶最终能把咱的统计分析能力用在计算投资上?
simple at 12/11/2008 16:21 快速引用
T-Bone steak is very delicious.


xiaoqiang at 12/11/2008 16:27 快速引用
xiaoqiang :
T-Bone steak is very delicious.




tongue tongue tongue
吃饭去了。一下午就看了几页。
wildcrane at 12/11/2008 16:55 快速引用
oops oops 打的好。 happy

Another T-Bone:



wildcrane :
Nike :
理财大道上没有闲云野鹤。

先悼念一下。 我哭


悼念啥? 打你

闲云野鹤偶也要与时具近嘛(好比乔儿要自个儿找婆家) 感动
Nike at 12/11/2008 18:21 快速引用
Nike :
oops oops 打的好。 happy

Another T-Bone:





一进来就看见这个,正好帮忙节食啦 Laughing
persoone at 12/11/2008 18:43 快速引用
persoone :
Nike :
oops oops 打的好。 happy

Another T-Bone:





一进来就看见这个,正好帮忙节食啦 Laughing


Laughing 吃饱了得更难受啊。
wildcrane at 12/11/2008 20:25 快速引用
wildcrane :
persoone :
Nike :
oops oops 打的好。 happy

Another T-Bone:





一进来就看见这个,正好帮忙节食啦 Laughing


Laughing 吃饱了得更难受啊。


Laughing Laughing 号称前秃的x感,可是这个。。。
persoone at 12/11/2008 21:59 快速引用
下周四考试。
出去玩儿了一圈之后,把一切都忘得烟消云散。


wildcrane :
我在自己学习作笔记过程中 oops 。Based on Essentials of Investments.

Is composed of longer-term borrowing or debt instuments, including T-notes and bonds, corporate bonds, municipal bonds, mortgage securities, and federal agency debt.

1. T-notes and Bonds: T-notes maturities range up to 10 years, while T-bonds are issued with maturities ranging from 10 to 30 years. Both are issued in denominations of $1000 or more. Both make semiannual interest payments called coupon payment.

2. TIPS (Treasury Inflation Protected Securities). The principal amount on these bonds is adjusted in proportion to increases in the Consumer Price Index.

3. Federal Agency Debt: gov agencies issue their own secuirites to finance their activities.
Example: The major mortgage-related agencies are the Federal Home Loan Bank (FHLB), the Federal National Morrtgage Association (FNMA, or Fannie Mae), the Government National Mortgage Association (GNMA, or Ginnie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC, ir Freddie Mac).
The last 3 were organized to provide liquidity to the morgage market. Until establishment of the pass-through securities sponsored by these government agencies, the lack of secondary market in mortages made mortage maketes depend on local rather than naitional credit availability. It was the most important financial innovations fo the 1980s. 就是中国人讽刺人说的“太有材了”
Although the debt of federal agecies is not explicitly insured by the Fedgov, it is widely assumed that gov will assist an agency. - considered extremely safe assets.

12月1号的The New Yorker上有一片很好的文章,说明为什么去年Fed and Treasurey 必须救Freddie and Fannie - 如果不就会严重影响美国政府的信誉。

4. International Bonds

5. Municipal Bonds (munis): issued by state and local governments. They are similar to T-bonds and corporate bonds, except their interest income is exempt from federal income tax. The interest income is also exempt from state and local taxation in the issuing state. Has to pa capital gains taxes.
(1) General obligation bondsL are backed by the 'full faith and credit' (ie, taxing power). (2) revenue bonds are issued to finance particular projects and are backed wither by the revenues from the project or by the municipal agency operating the project. eg. mass turnpike, industrial development bond.
r*(1-t)=Rm (taxible return*(1-tax bracket)=tax-free rate

6. Corporate Bonds: are the means by which private firms borrow money directly from the public. Default Risk differentiates it from the T-bonds.
(1) secured bonds: backed by a specific collateral in the event of bankruptch;
(2) unsecured bonds, called debentures, have no collateral; subordinated debentures have a lower priority claim facing bankruptcy.
Corporate bonds sometimes come with options: callable bonds, convertible bonds etc.
They are rated - Moody's, Standard & Poor's, and Fitch. Bonds with ratings above BAA(Moddy's or Fitch) or BBB (S&P) are deemed "investment grade". Lower rated bonds are called high-yield or junk bonds.

7. Mortgage and Mortgage-backed securities:
Mortgage-backed pass-through securities were introduced by the government Ginnie Mae in 1970. The US gov ensures timely payment of principal and interest even if the borrower defaults on the mortgage. Tush, investors can buy and sell GNMA like any other bond.

Later Fannie Mae and Freddie Mac have become popular. By 2006, $3.8 trillion of outstanding mortgages were securitized into mortgage-back secuiries > $3.1 trillion of coporate bond and closer to $4.6 tillion market in Treasure secuities.

Features of Corporate Bonds:
1. callable or deferred callable bonds: Are issued with higher coupons and promised yields to maturity than noncallable bonds.
2. Convertible bonds:
wildcrane at 1/11/2009 14:51 快速引用
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