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Watch "The Bond Market Explained for Beginners" on YouTube

Discussion in 'Library and Editorials' started by BarnacleBob, Jan 30, 2014.



  1. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Simplified explaination....

     
    Last edited by a moderator: Dec 26, 2015
  2. Ahillock

    Ahillock A nobody Mother Lode

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    BB, thanks. That does a good job of explaining rates and what happens when they go up or down.

    Just wanted to tag along and mention that the Mike Maloney video does a great job explaining the connection between banks and government and how the process works between the US Treasury and the Fed.

    [video=youtube_share;iFDe5kUUyT0]http://youtu.be/iFDe5kUUyT0[/video]
     
    Goldhedge and BarnacleBob like this.
  3. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Corporate Bonds explained.....

     
    Last edited by a moderator: Dec 26, 2015
  4. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Excellent Two Part Series:

    Buying Bonds at Issue and holding to Maturity Explained




    Buying and Selling Bonds on the Secondary Market Explained

     
    Last edited by a moderator: Dec 26, 2015
  5. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    BONDS:

    In finance, a bond is an instrument of indebtedness of the bond issuer to the holders. It is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest (the coupon) and/or to repay the principal at a later date, termed the maturity date. [1] Interest is usually payable at fixed intervals (semiannual, annual, sometimes monthly). Very often the bond is negotiable, i.e. the ownership of the instrument can be transferred in the secondary market. This means that once the transfer agents at the bank medallion stamp the bond on the second market the bond[2]

    Continued:

    http://www.wikipedia.org/wiki/Bond_(finance)
     
  6. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    What is a Repo/Reverse Repo Explained

    This short vid (13 min) not only explains what a Repo is but also what & how the Repo markets operate.... The collapse of Lehman & MFGlobal is explained along with the hypothecation/rehypothecation & collateral schemes... In a word, this vid exposes the "real"
    systemic risks that the system faces...

    https://www.youtube.com/watch?v=sbPByb-NXdQ&feature=youtube_gdata_player
     
    Last edited: Jan 31, 2014
  7. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Explaining the U.S. Tri-Party Repo Market

    A recent New York Fed study, “Key Mechanics of the U.S. Tri-Party Repo Market,” provides a primer on the issues and key mechanics that have contributed to the market’s fragility and proved an obstacle to industry reform efforts.

    In the report, the authors explain how the collateral allocation and “unwind” processes pose systemic weakness and are hindering reform efforts. These problems stem in part from the intervention by dealers to allocate collateral and their reliance on intraday financing to unwind, or settle, expiring repos.

    http://www.newyorkfed.org/newsevents/news/research/2012/rp121001.html

    Key Mechanics of the U.S. Tri-Party Repo Market

    During the 2007-09 financial crisis, it became apparent that weaknesses existed in the design of the U.S. tri-party repo market that could rapidly elevate and propagate systemic risk. This article describes key mechanics of the market, focusing on two that have contributed to its weaknesses and impacted market reform efforts: the collateral allocation and “unwind” processes. The authors explain that collateral allocation in the tri-party repo market involves considerable dealer intervention, which can slow settlement processing. The length of time required to allocate collateral has in fact been a significant obstacle to market reform. Another impediment to reform is the unwind process, or the settlement of expiring and continuing repos that occurs before new ones can be settled and continuing ones can be “rewound.” The intraday funding required as a result of the unwind process creates potentially perverse dynamics that increase market fragility and financial system risk. Indeed, a reengineering of the tri-party repo settlement process to be much less reliant on intraday credit is a main goal of current market reform. The authors argue that streamlining the collateral allocation process and eliminating the time gap associated with the unwind could minimize market risk and assist in the reform efforts.

    PDF full article

    http://www.newyorkfed.org/research/epr/2012/1210cope.html
     
  8. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  9. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  10. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Collateral Types Accepted for Futures, Options, Forwards, OTC FX & Commodity Swaps

    CME Clearing accepts a wide range of collateral for deposit into trading accounts, including U.S. dollars, select foreign currencies, U.S. Treasuries, select foreign sovereign debt, asset-backed securities, and agency bonds.

    Acceptable performance bond deposits by customers of Clearing Member Firms are subject to CME Rule 930.C. The lists of acceptable collateral for both 4d and Cleared Swaps Customer Accounts both pertain exclusively to deposits made by clearing member firms to meet their obligations at CME Clearing.

    Click link for collateral specs:

    http://www.cmegroup.com/clearing/financial-and-collateral-management/
     
  11. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  12. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Whats safer than bank, pays interesr and also provides instant liquidity on demand? ANSWER: A Fed Reserve Reverse Repo!

    A large depositor loans cash to the Fed, the Fed loans the depositor a UST as collateral for the cash, and also pays the depositor 3 bps on the reverse repo....

    Not only does the Fed safely store your cash, but they also pay you interest and provide you with collateral.... What a deal for big depositors!

    http://wallstreetexaminer.com/forums/index.php?showtopic=1077629#entry1164262
     

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