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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Understanding Real and Pseudo-Real Corporate Bond Rates |
Minyanville - July 6, 2011 - By Howard Simons
The most important thing to note is that low corporate bond rates are not signaling the end of the world or anything close to it.
One of the more vexing problems facing both economists and casual pedestrians in Las Vegas alike is deciding what is and is not real. If we simply subtract a measure of inflation based on a price index, we miss out on the whole psychology of inflation and its role in affecting investment decisions (see The Abstract CPI: Going Beyond the Numbers of Inflation)and its role in affecting investment decisions (see . Moreover, all reported measures of inflation are backward-looking and the allegedly forward-looking TIPS market tends to follow, not lead, other indicators (see Are Expected Inflation and the Yield Curve Related?).
You might be wondering why this is an investment problem. The answer is simple: If you, in defiance of Polonius’ dictum, either are borrowing or lending, you have to decide whether the interest rate involved adequately reflects expected inflation. Borrowers hope it does not; lenders hope that it does, and that, my friends, is why we have a market.
Pseudo-Real Rates
Most analysts solve the problem by ignoring it; the more personable out of this group then enter political life. The conventional approach is to take a nominal interest rate, such as the Moody’s average corporate bond rate, subtracting the one-year trailing rate of inflation from it, and hoping people forget a one-year trailing rate is an arbitrary backward-looking subtrahend from the forward-looking minuend of corporate bond rates. I dub the result a “pseudo-real” corporate rate in honor of assorted pseudo-intellectuals I have known.
What does it look like? While I can take the series back to the end of World War II, the CPI measures after the removal of post-war price controls and then the suppression of long-term interest rates into the Korean War distort the data badly. The chart below starts in the early 1950s; the continuous average of the pseudo-real rate begins in April 1953.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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