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InThe New Masters of Capital, Timothy J. Sinclair examines a key aspect of the global economy-the rating agencies. In the global economy, trust is formalized in the daily operations of such firms as Moody's and Standard & Poor's, which continuously monitor the financial health of bond-issuers ranging from private corporations to local and national governments. Their judgments affect unimaginably large sums, approximately $30 trillion in outstanding debt issues, according to a recent Moody's estimate. The difference between an AA and a BB rating may cost millions of dollars in interest payments or determine if a corporation or government can even issue bonds. Without bond rating agencies, there would be no standard means to compare risks in the global economy, and international investment would be problematic. Most observers assume that the agencies are neutral and scientific, and that they interpret their role in narrowly economic terms. But these agencies, by their nature, wield extraordinary power and exert massive influence over public policy. Sinclair offers a highly accessible account of these institutions, their origins, and the rating processes they use to judge creditworthiness. Illustrated with a wide range of cases, this book offers a fresh assessment of the role of an often-overlooked institution in the dynamics of modern global capitalism.

We estimate sovereign bond spreads of 28 emerging economies over the period January 1998-December 2011 and test the ability of the model in generating accurate in-sample predictions for emerging economies bond spreads. The impact and significance of country-specific and global explanatory variables on bond spreads varies across regions, as well as economic periods. During crisis times, good macroeconomic fundamentals are helpful in containing bond spreads, but less than in non-crisis times, possibly reflecting the impact of extra-economic forces on bond spreads when a financial crisis occurs. For some emerging economies, in-sample predictions of the monthly changes in bond spreads obtained with rolling regression routines are significantly more accurate than forecasts obtained with a random walk. Rolling regression-based bond spread predictions appear to convey more information than those obtained with a linear prediction method. By contrast, bond spreads forecasts obtained with a linear prediction method are less accurate than those obtained with random guessing.

Using a panel of 30 emerging market economies from 1997 to 2007, this paper investigates the determinants of country risk premiums as measured by sovereign bond spreads. Unlike previous studies, the results indicate that both fiscal and political factors matter for credit risk in emerging markets. Lower levels of political risk are associated with tighter spreads, while efforts at fiscal consolidation narrow credit spreads, especially in countries that experienced prior defaults. The composition of fiscal policy matters: spending on public investment contributes to lower spreads as long as the fiscal position remains sustainable and the fiscal deficit does not worsen.

The coming financial apocalypse and what government and individuals can do to insulate themselves against the worst shocks In this controversial book a noted adherent of Austrian School of Economics theories advances the thesis that the United States is fast approaching the end stage of the biggest asset bubble in history. He describes how the bursting of the bubble will cause a massive interest rate shock that will send the US consumer economy and the US government—pumped up by massive Treasury debt—into bankruptcy, an event that will send shockwaves throughout the global economy. Michael Pento examines how policies followed by both the Federal Reserve and private industry have contributed to the impending interest rate disaster and highlights the similarities between the US and European debt crisis. But the book isn't all doom and gloom. Pento also provides well-reasoned solutions that, government, industry and individuals can take to insulate themselves against the coming crisis. * Paints an alarmingly vivid picture of the massive interest rate shock which soon will send consumers and the government into bankruptcy * Backed by a wealth of historical and economic data, Pento explains how the bubble was created and what the U.S. can do to mitigate the impending crisis * Provides investors with sound strategies for protecting themselves and their assets against the coming financial apocalypse * Explains why retirees, in particular, will be at risk as real estate prices decline, pensions weaken, and the bond bubble bursts

A completely updated edition of the guide to modern bond analysis First published in 1972, Inside the Yield Book revolutionized the fixed-income industry and forever altered the way investors looked at bonds. Over forty years later, it remains a standard primer and reference among market professionals. Generations of practitioners, investors, and students have relied on its lucid explanations, and readers needing to delve more deeply have found its explication of key mathematical relationships to be unmatched in clarity and ease of application. This edition updates the widely respected classic with new material from Martin L. Leibowitz. Along the way, it skillfully explains and makes sense of essential mathematical relationships that are basic to an understanding of bonds, annuities, and loans—in fact, any securities or investments that involve compound interest and the determination of present value for future cash flows. The book also includes a new foreword. * Contains information that is more instructive, important, and useful than ever for mastering the crucial concepts of time, value, and return * Combines the clear fixed-income insights found in the original edition with completely new knowledge to help you navigate today's dynamic market * Includes over one hundred pages of new material on the role of bonds within the total portfolio In an era of calculators and computers, some of the important underlying principles covered here are not always grasped thoroughly by market participants. Investors, traders, and analysts who want to sharpen their ability to recall and apply these fundamentals will find Inside the Yield Book the perfect resource.

Financing sources for urban construction have garnered significant attention globally. Among various financing methods, the urban construction investment bond (UCIB) is unique to China. The UCIB credit spread, which represents the compensation for credit risk, has become a focal point for researchers. However, owing to shortcomings of previous approaches, few scholars have accurately assessed the impact of implicit government guarantees on credit spreads. This study introduces an innovative approach that uses orthogonal decomposition to extract proprietary information from credit ratings, reflecting implicit government guarantees. After accounting for bond factors, local government financing vehicle factors, and macroeconomic conditions, the implicit government guarantee substantially reduces the UCIB's credit spread. This conclusion remains robust when controlling for investor attention, regional factors, or duration.

Inspired by the distinguished regulated photochemical and photophysical properties of 2-(2′-hydroxyphenyl)benzazole derivatives, in this work, the novel bis(2′-benzothiazolyl)hydroquinone (BBTHQ) fluorophore is explored, looking at its photo-induced behaviors associated with different substituted atomic electronegativities, i.e., BBTHQ-SO, BBTHQ-SS and BBTHQ-Se compounds. From the structural changes, infrared (IR) vibrational variations and simulated core-valence bifurcation (CVB) indexes for the dual hydrogen bonds for the three BBTHQ derivatives, we see that low atomic electronegativity could be conducive to enhancing hydrogen bonding effects in the S1 state. Particularly, the O4-H5⋯N6 of BBTHQ-SO and the O1-H2⋯N3 of BBTHQ-SSe could be strengthened to be more intensive in the S1 state, respectively. Looking into the charge recombination induced by photoexcitation, we confirm a favorable ESDPT trend deriving from the charge reorganization of the dual hydrogen bonding regions. By constructing the potential energy surfaces (PESs) along with the ESDPT paths for the BBTHQ-SO, BBTHQ-SS and BBTHQ-Se compounds, we not only unveil stepwise ESDPT behaviors, but also present an atomic electronegativity-regulated ESDPT mechanism.

The Eleventh Amendment is one of the most obscure and sharply debated parts of the United States Constitution. The interpretation of this seeminly simple clause has troubled the Supreme Court at crucial periods in American history, and continues to excite sharp debate in the Court today. John V. Orth reconstructs the fascinating but little-known past of the Eleventh Amendment and connects it to pressing modern issues to provide new insight into the history of judicial interpretation.

This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007-09, we find evidence of a shift away from pre-crisis standards of best funding practices competitive auctions of debt instruments with a fixed coupon, long maturity and local currency denomination (DLTF). Exploiting the cross-country panel data dimension of the data, we conclude that the crisis and related changes in the macroeconomic environment and investor sentiment can account for a significant proportion of the deviation. The negative effect of the crisis on DLTF debt issuance was especially pronounced in high deficit and high debt euro area countries, and has forced governments to assume additional risk.