Musings on Markets

AUGUST 15, 2023

I was reminded of that paper a few weeks ago, when Fitch downgraded the US, from AAA to AA+, a relatively minor shift, but one with significant psychological consequences for investors in the largest economy in the world, whose currency still dominates global transactions. For an investment to be risk free then, it has to meet two conditions.

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CFO News Room

JANUARY 11, 2023

Country Risk: Currency and Cost of Capital. In my last post, I noted that concerns about inflation have played a big role in pushing up the US ten-year treasury bond rate from 1.51% on Jan 1, 2022, to 3.02% on June 30, 2022.

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Musings on Markets

SEPTEMBER 27, 2022

There is a market-based estimate of inflation that comes from the US treasury market, where a comparison of yields on a treasury bond with that on a inflation-protected treasury bond of equivalent maturity provides a measure of expected inflation.

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CFO News Room

JANUARY 14, 2023

Inflation: The Full Story. I wrote my first post on this blog in 2008, and inflation merited barely a mention until 2020, though it is an integral component of investing and valuation.

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Musings on Markets

JULY 17, 2023

In my third post at the start of 2023, I looked at US treasuries, the long-touted haven of safety for investors. In 2022, they were in the eye on the storm, with the ten-year US treasury bond depreciating in price by more than 19% during the year, the worst year for US treasury returns in a century.

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Musings on Markets

JULY 13, 2022

Country Risk: Currency and Cost of Capital As a final part to this post, to see the shifts in country risk that we have seen in 2022, let’s start with an assessment of risk free rates. That increase in interest rates is not restricted to the US dollar, as local currency government bond rates have risen around the world.

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Musings on Markets

MAY 6, 2022

Inflation: The Full Story I wrote my first post on this blog in 2008, and inflation merited barely a mention until 2020, though it is an integral component of investing and valuation. As treasury rates have risen, markets also seem to have been more wary about risk, and how it is being priced.

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Musings on Markets

JANUARY 24, 2024

Government Bond/Bill Rates in 2023 I will start by looking at government bond rates across the world, with the emphasis on US treasuries, which suffered their worst year in history in 2022, down close to 20% for the year, as interest rates surged. The Fed Effect: Where's the beef? The Fed Effect: Where's the beef?

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Treasury Currencies Marketing Economics 52

PYMNTS

FEBRUARY 15, 2019

The currency isn’t going to work,” the executive said. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”. Moreover, that lag time, apart from being annoying, added to the opacity of the pricing, since currency exchange rates fluctuate.

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PYMNTS

DECEMBER 11, 2019

If a B2B vendor is able to standardize the way it presents invoices, and offer flexibility by supporting payments made in either the buyer or seller’s local currencies, the cash flow between buyer and supplier becomes smoother for both sides. Kohli offered the example of two business partners trading between the U.S. and Turkey.

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CFA Institute

DECEMBER 5, 2018

“Most people tell me that long-run equity valuation data is meaningless," says Russell Napier. "I I think they’re wrong.”.

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Musings on Markets

JANUARY 9, 2021

To illustrate, consider a practice in valuation, where analysts are trained to add a small cap premium to discount rates for smaller companies, on the intuition that they are riskier than larger companies. It is true that the Turkish company will face more risk because of its location, but that is an issue separate from currency.

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Valuation Currencies Numbers Corporate Finance 52

Barry Ritholtz

AUGUST 16, 2022

If you’re all interested in macro investing, trend following, commodities, currencies, fixed income, various types of quantitative strategies, and most important of all, risk management, you’re going to find this conversation to be absolutely fascinating. RITHOLTZ: And those were Treasuries. TROPIN: Right. TROPIN: Yeah.

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PYMNTS

FEBRUARY 29, 2016

Hitting the milestone, Citi’s Treasury and Trade Solutions said, means businesses’ banking needs are evolving. 42 percent in cost-savings could potentially hit banks if they adopt Ripple’s distributed ledger network and XRP digital currency to fulfill cross-border payments for their clients, according to Ripple.

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Future CFO

DECEMBER 7, 2020

Teoh shared with us her thoughts on some of the gender-related challenges at work and how to overcome them, advice on how to deal with the new normal as a finance executive, and how she reimagines borderless digital currencies as a “point junkie”. Sereen Teoh, CFO, BIG Loyalty. FutureCFO: Can you share with me your finance career journey?

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CFO Financial Planning and Analysis (FP&A) Leadership Finance 52

Musings on Markets

JANUARY 20, 2021

Thus, if a 10-year corporate bond has a yield of 3.00% and a 10-year government bond, in the same currency and with no default risk, has a yield of 1.00%, the difference is termed the default spread and becomes a measure of the price of risk in the bond market. If you buy into this measure of equity risk premiums, consider its limitations.

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CFO News Room

JANUARY 17, 2023

Neither index is particularly representative, and currency effects contaminate both, but they tell the story of devastation in the two markets. In the graph below, I start with two traditional havens for US investors, the US dollar and treasury bonds: Trade-weighted dollar & US 10-year T.Bond Rate. Economic Consequences.

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Musings on Markets

MARCH 19, 2022

Flight to Safety and Collectibles As in any crisis, there was a rush to safety, accentuated by wealthy Russians trying to move their wealth to safe havens, with safety defined not just in terms of currency, but also in terms of being beyond the reach of US and European regulators and legislators.

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CFO News Room

JANUARY 24, 2023

After all, we get our restaurant choices from Yelp reviews, our movie recommendations from Rotten Tomatoes, and we have even built crypto currencies around the notion of crowd-checking transactions. Rather than replicate that data, my macroeconomic datasets relate to four key variables that I use in corporate finance and valuation.

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Musings on Markets

JANUARY 8, 2022

After all, we get our restaurant choices from Yelp reviews, our movie recommendations from Rotten Tomatoes, and we have even built crypto currencies around the notion of crowd-checking transactions. Rather than replicate that data, my macroeconomic datasets relate to four key variables that I use in corporate finance and valuation.

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Valuation Corporate Finance Currencies Finance 99

PYMNTS

NOVEMBER 3, 2020

The $20 trillion in corporate payments done through paper checks represents a staggeringly large greenfield opportunity – and there is any number of ways to modernize B2B interactions (and corporate treasury activities in lockstep). And though valuations may be stretched, fundamentals are indeed sound.

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Musings on Markets

JULY 25, 2023

S&P, Moody's and Fitch, in addition to rating companies for default risk, also rate governments, and they rate them both on local currency debt, as well as foreign currency debt. I know that the currency choice is the source of angst for many analysts, and I think unnecessarily so. I have my reasons.

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PYMNTS

NOVEMBER 24, 2020

In today’s top news, point-of-sale tech startup Toast is valued at $8 billion after a share purchase, and PayPal’s CEO says it’s only a matter of time before central banks launch digital currencies. PayPal’s Schulman: Consumers Moving To Digital Currency In Droves. PayPal’s Schulman: Consumers Moving To Digital Currency In Droves.

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CFO News Room

JANUARY 12, 2023

The first is the return that can be earned on guaranteed investments , i.e., US treasury bills and bonds, for instance, if you are a investor in US dollar, since it is a measure of what someone who takes no or very low risk can expect to earn. There are two macro factors that will come into play, and both are in play in markets today.

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Musings on Markets

JULY 1, 2022

The first is the return that can be earned on guaranteed investments , i.e., US treasury bills and bonds, for instance, if you are a investor in US dollar, since it is a measure of what someone who takes no or very low risk can expect to earn. There are two macro factors that will come into play, and both are in play in markets today.

Marketing 99

Marketing Investments Profit and Loss Numbers 99

Barry Ritholtz

NOVEMBER 8, 2022

CHANCELLOR: And look — yeah, but then if you look at the valuation of the market at that time, the market was — the U.S. CHANCELLOR: And look — yeah, but then if you look at the valuation of the market at that time, the market was — the U.S. They’re actually just buying long dollars, treasuries.

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Barry Ritholtz

OCTOBER 17, 2023

Then the volatility and, and the valuation makes an enormous difference. Balance 00:32:05 [Speaker Changed] Stocks and bonds or stocks 00:32:07 [Speaker Changed] And bonds, stocks and bonds and others where you can hold commodities and currencies and things in this. And here we are about to start the fourth quarter of 2023.

Investments 52

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Barry Ritholtz

DECEMBER 20, 2022

It’s just a fascinating conversation about looking at the world from both bottoms up and top-down, as well as thinking about what valuations are like, how likely are macro events, the impact you’re getting not just the return on capital, but as famously said in fixed income, a return of your capital. Treasury, the OFAC restrictions.

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Restructuring Investments Marketing Banking 64

Barry Ritholtz

FEBRUARY 13, 2023

But since you mentioned getting return on the risk you take, how do you think about duration when the three-month Treasury is more or less the same or better than the 10-year? Now, we’re shifting to more international places like China, Europe, et cetera, that are really growing, and that valuations are cheaper. RIEDER: Yeah.

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Musings on Markets

JULY 24, 2024

Currency Effects You may find it odd that I have spent so much of this post talking about country risk, without bringing up currencies, but that was not an oversight. It is true that riskier countries often have more volatile currencies that depreciate over time, but this more a symptom of country risk, than a cause.

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Barry Ritholtz

NOVEMBER 7, 2023

And, and here you referenced this in the book, but their business model now with Fed funds over 5%, you could get Riskless treasuries just about 5%. Put it in Riskless Treasuries. It seemed like not riskless, but now Yeah, you just put it in treasuries, earn 5%. A closed shop that was a currency exchange.

Numbers 64

Numbers Profit and Loss Banking Finance 64

E78 Partners

APRIL 3, 2025

Hedge Currency and Inflation Risks A trade war could weaken trading partners currencies and stoke U.S. Work with your treasury team to hedge forex exposure and secure fixed-rate financing before rates climb further. Build a watchlist, but temper valuations for trade-war volatility.

Currencies 59

Currencies Valuation Treasury Finance 59

Barry Ritholtz

APRIL 8, 2025

And so when we, you know, kind of came into January of 2025, we were starting to talk to folks about, look at where the dollar is versus virtually every other currency super strong. When there are no term premiums in the, in the United States Treasury curve, it’s telling you the same thing.

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Mergers and Acquisitions (M&A) Investments Profit and Loss Numbers 59

Barry Ritholtz

NOVEMBER 25, 2024

00:21:21 [Speaker Changed] So this story came out that, oh, value is defensive because it has this valuation buffer to it 00:21:28 [Speaker Changed] In that one example. And instead of replacing a house, you’re replacing exposure like the s and p 500 or treasuries, where historically it’s been really hard to beat the market.

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Leverage Investments Marketing Math 59

Musings on Markets

FEBRUARY 6, 2025

Second, they are in local currencies, and in nominal terms. The Currency Effect As you can see comparing the local index and dollar returns, the two diverge in some parts of the world, and the reason for the divergence is movements in exchange rates.

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