A British parliamentary report slammed Barclays bank on Saturday for its "disgraceful" actions that led to a rate-rigging scandal.
Libor, the London Interbank Offered Rate, could be scrapped altogether and replaced with an interest rate that is set using actual trades, according to a review set up by the UK government.
updated: Wed Jul 18 2012 23:32:00
Christine Romans on how the libor rate scandal could affect credit cards, mortgages, car loans and more.
Barclays bank took out large UK newspaper ads Saturday to say sorry to "all Barclays customers and clients" in the wake of a rate-rigging scandal which has hammered its reputation.
updated: Tue Jul 10 2012 07:43:00
Former Barclays CEO Bob Diamond defies expectations by defending his former employer. CNN's Jim Boulden reports.
Former Barclays bank chief executive Bob Diamond will voluntarily give up bonuses worth $31 million after he resigned in the wake of a rate-rigging scandal, the bank said Tuesday.
updated: Thu Jul 05 2012 07:25:00
Treasury Select Committee member David Ruffley reflects on Bob Diamond's testimony before Parliament.
Barclays former boss Bob Diamond was in the spotlight this week when he was questioned by British parliament's 13-strong Treasury Committee, but the rate-fixing scandal which lost him his job looks set to reach far further afield.
Barclays CEO Bob Diamond and COO Jerry del Missier have resigned in the wake of the interest rate-fixing scandal that has rocked the bank.
updated: Tue Jul 03 2012 11:34:00
Ralph Silva of the Silva Research Network discusses Bob Diamond's resignation as CEO of Barclays.
Barclays on Monday announced the resignation of its chairman, Marcus Agius, in the widening scandal surrounding the bank's manipulation of interbank lending rates in 2008 and 2009.
updated: Mon Jul 02 2012 03:56:00
CNN's Richard Quest talks to Matthew Hancock who says Barclays CEO Bob Diamond may face calls for resignation.
Marcus Agius will resign as chairman of Barclays on Monday, in the hope that his departure will take the sting out of mounting criticism from politicians and shareholders over the bank's role in the price-fixing of interbank lending rates.
updated: Sun Jul 01 2012 18:58:00
Reports say Barclay's chairman Marcus Agius will step down soon. CNN's Richard Quest has more.
1994 was great for movie fans. "Pulp Fiction." "The Shawshank Redemption." "Forrest Gump." But bond investors definitely would rather forget that year.
After three years of rapidly unwinding holdings in banks that share the euro currency, U.S. money market funds have dipped back in.
I thought I was clever. Earlier this year I had over half of my 401k assets in cash. I know that investors are terrible at timing the market and I'm way too young not to be fully invested, but I can't get over the fact that stocks look expensive right now.
I'm thinking of stashing cash for emergencies into a Treasury Inflation Protected Securities (TIPS) mutual fund rather than CDs or a money-market account. The return is better and the risk doesn't seem to be much higher. What do you think of this plan? -- Ronnie Colvin, Madison, Alabama
While you needed a Costco-size supply of Dramamine to survive the stock market's choppy ride to nowhere both last year and over the past decade, you required no such relief when it came to your bonds -- or at least one type of bond.
Unless you are one of those preternaturally glass is half-empty people who goes out on a nice, sunny day and complains about the light shining in your eyes, it is really difficult to find a lot of bad news in the December jobs report.
European stocks rose Friday as leaders unveiled plans for a fiscal union at their high profile summit in Brussels. But continuing concern from bond investors sent most European bond yields higher.
European bond yields rose Wednesday after a German bond auction flopped, undermining trust in eurozone government debt.
European bond yields climbed Tuesday, with Italian yields surpassing a key threshold, setting off alarms in markets around the world as investors again worry about how the eurozone will solve its debt crisis.
With the economy wobbling, what's the best way to tell whether the stock market is headed for a complete meltdown or poised for a roaring rally? Simple: Watch the spreads. No, not the latest lines from Vegas oddsmakers. Rather, experts point to three key metrics in the credit markets that have historically given investors a good sense of the risk environment ahead.
Junk bonds lived up to their name this summer, but now investors just can't get enough of them.
Investors apparently have a finite capacity when it comes to panicking.
Greece's debt crisis may be an ocean away, but it's seeping into dozens of U.S. cities and towns thanks to troubled Franco-Belgian bank Dexia.
Investors became so nervous in the past two months that they're not willing to gamble on risky junk bonds anymore -- despite the lucrative promise of high yields.
As the European debt crisis heated up, managers of American money market funds started pulling money out of European banks, with the French banks feeling the biggest impact.
The sovereign debt problems in Europe have roiled financial markets around the world.
Investors are still more than willing to buy the federal government's debt, but they might not be so kind to America's cities and towns.
Though you no longer have to worry about the havoc a debt-ceiling default could wreak on your finances, another threat lingers for Americans: The fallout from any future downgrade of U.S. government debt.
Investors in the bond market are quickly losing patience with what is seen as an epic failure of leadership in Washington over the nation's finances.
As lawmakers are busy trying to reach a compromise to get the nation's fiscal house in order, bond market experts are keeping a close eye on how tax reform will play out as part of the plan to reduce the federal deficit.
The bond market has begun to look more and more like a seller's market, and experts don't expect that to change anytime soon.
Just when it looked as if the stock market was starting to calm down late last year, Treasury and municipal bonds got the yips. And just when it seemed like those jitters had largely passed, commodity prices took a big belly flop in April. Your nerves may be getting frayed by now. Which part of your portfolio will come unglued next?
The muni bond market is showing signs of life but experts caution that it may be too early to call a full blown recovery.
The municipal bond market has been showing some signs of life, with yield-hungry investors showing an appetite for state and local government debt.
Inflation fears are everywhere these days thanks to surging commodity prices.
The municipal bond market is finally starting to recover from a severe winter slump, and some experts say the outlook for state and local government debt is sunnier than ever.
Wall Street can't get of enough junk bonds, with investors snapping up record amounts in recent months. But the market may have reached its tipping point.
For bond fund investors, there's little good news. The decades-long decline in interest rates, which pumped up returns, has hit rock bottom. Inflation and higher rates must loom ahead -- and when rates rise, bond prices fall. Is there anything you can do besides accept a future of lousy returns?
The municipal bond market is headed for its worst quarter in a decade, as investors fear cash-strapped states and cities across the country are on the brink of default, and local governments slow debt issuance.
As investors fear cash-strapped states and cities across the country are on the brink of default and local governments slow debt issuance, the municipal bond market is heading for its worst quarter in a decade.
I'm a senior citizen with ample monthly income and have about $20,000 maturing in a CD. Would it be wise for me to put this extra money into a highly rated high-yield municipal bond fund to secure a little more tax-free interest than I'd get in a new CD? -- Joyce M., Seagoville, Texas
Always wanted to own a little piece of your local incinerator? Well you might be out of luck.
State and local governments across the country are struggling under the weight of their budget woes.
Junk bonds have had a stellar couple of years, and it's not over yet.
More investors appear to be betting that the United States' ever-rising debt load is going to get worse and are working to protect themselves against it.
Government bond prices fell Tuesday as stocks rallied on strong corporate earnings and a positive manufacturing report.
Just as fears about a heavy sell off in the municipal bond market seemed to be easing, Standard & Poor's issued a warning that this year could bring a potential surge in the number of downgrades of bonds issued by state and local governments.
Why have municipal bond funds been taking such hits in recent weeks? And what should investors do about it? -- Frank Manfredo, Brentwood, N.Y.
Municipal bonds continued to sell off this week, as worried investors fled the market, and the media continued to churn out stories about state and local governments struggling with severe budget shortfalls.
Normally, investors gorge on bonds only when they're scared out of their wits -- typically because they've taken such a beating in stocks that they can't bear the thought of losing one more cent.
States and localities are about to kiss a vital source of funds goodbye.
Before looking ahead to 2011, you may need a moment to recover from 2010's wild ride. Sure, the Standard & Poor's 500 index is up 8% so far this year. But along the way the stock market plunged 16% from April to July, then rebounded 9% in September -- the biggest gain for that month in more than 70 years.
updated: Sun Nov 14 2010 18:27:00
In May, Gov. Arnold Schwarzenegger discussed plans for California's budget.
Corporate bonds have been on a tear since the market collapse of 2008, as investors sought refuge from a tumultuous stock market.
Treasury yields moved slightly higher Wednesday after investors showed robust demand in the last auction in the Treasury's offering of $100 billion in newly-printed U.S. debt this week. The yield on the benchmark 10-year note rose to 2.50% from 2.46% late Tuesday. The yield on the 30-year bond edged up to to 3.68%. The 5-year note yielded 1.28%, while the 2-year note's yield edged up to 0.44%.
Question: I consider myself a good 401(k) citizen. I contribute the max, get the company match and have an age-appropriate level of stocks in my account. But one of the bond funds in my plan has a 10-year average return of about 9%, which is better than almost every stock fund. So I'm wondering whether I'd be better off just putting all my money into that bond fund. Would that make sense? -- Dan, Southfield, Mich.
Bond investors and traders continue to be lured to high-yielding junk bonds as ultra-safe U.S. Treasurys waft in a tight range.
Question: I'm within five years of retirement and currently have about 35% of my investments in bond funds. With rising interest rates a likely scenario, how do I stay diversified without exposing myself to a "bond bubble"? -- John Clay, East Helena, Montana
Investors lined up around the block last week to get a piece of Johnson & Johnson's newest debt offerings, even though the yields were small enough to fit on a Q-tip. Ditto for new debt from IBM, Wal-Mart and a host of other investment-grade corporations.
Question: I'm 26 years old and keep my money, about $300,000, in a savings account because I can't handle the volatility of the stock market. Until the recession hit, I was earning at least 4%. But now I'm getting a pathetic 1%. What's the smartest way for me to get a decent return? -- Daniel, Brooklyn, New York
If the ongoing budget woes of the nation's cities and states don't make you nervous, perhaps it should.
As manias go, this one is different. Your neighbors aren't coming up to you at cocktail parties bragging about making a killing in bonds. No one is flipping fixed income for quick profit. And no talk-radio guru is shouting that bonds will be the only investment left standing after the next financial Armageddon.
The corporate bond market is in the middle of a slump as the appetite for riskier assets has once again dwindled.
Question: I'm 37 years old and currently have about $175,000 in my retirement accounts, including $15,000 in my Roth. I also have a taxable brokerage account with about $15,000 in savings as my safety net, to which I contribute about $400 a month. I'm confident I'm on target in my retirement accounts, but hate that my cash is just sitting there in my brokerage account. I'd like a relatively conservative investment that will allow me to keep my cash liquid in case I need it. Any suggestions? -- Leo, Oakland, Calif.
The bond rally of 2008 to 2010 has been epic, but alas, all signs are that it has peaked. Investors plowed $303 billion into U.S. bond mutual funds over the 12 months ending March 31 (compared to a $9.6 billion outflow for U.S. stock funds). Normally stodgy U.S. corporate investment-grade bond prices have jumped 19%, extending their longest rally since 2003. "From a longer-term investor's viewpoint, that is not good news," says Dan Fuss, who manages the $19 billion Loomis Sayles Bond Fund and has been investing in fixed income for 52 years. Prices are up and yields have fallen. That leaves fixed-income investors in a quandary: Suffer with a puny 3.4% yield on 10-year U.S. Treasuries or buy pricey corporate bonds that are susceptible to inflation and rising U.S. interest rates. Even fixed-income guru Bill Gross of Pimco cautions that bonds have seen their best days.
Treasury prices rallied and yields slipped Tuesday as confidence in the global economy dropped and investors flocked to the safety of the bond market.
Treasurys rose Monday as stocks ended lower, the euro sank and fears about the global economic recovery persisted.
Treasurys rallied Tuesday as stocks closed lower, the euro tumbled and investors digested conflicting economic data from the government.
Treasurys gave up gains late Monday as stocks rebounded and the euro recovered from earlier losses.
Treasurys were mostly higher Thursday as stocks ended lower and the euro declined, boosting the appeal of safe haven bonds.
Andrew Mellon, the banking icon, once famously said: "Gentleman prefer bonds." The implication being that bonds, while less perhaps less sultry than equities, will generate a predictable return for investors, and not put their investments at serious risk of capital impairment. Ostensibly the latter part is true: bonds sit higher up in the capital structure of and therefore have more downside protection. If a company performs poorly and its stock goes down, stockholders get nothing. On the other hand, if a company can't pay off bonds it's issued, investors could end up at least owning the company and its assets.
Treasurys rose Wednesday as concerns about Greek debt sparked demand for U.S. debt.
Treasury prices fell Thursday following the sale of $13 billion in 30-year bonds and as concerns about Greek debt eased.
Even bond managers are questioning the wisdom of buying bonds now.
Question: My wife and I have $25,000 in a money market account earning almost nothing in interest. We would like to place $20,000 in some kind of an account that will give us a better return. This is our emergency money, so we'd like to invest it in something fairly safe. We also need to be able access the funds if necessary. I've had suggestions to invest in bonds, CDs and another money market account. Do you have any suggestions or recommendations? --Ted Graham, Grandville, MIchigan
The waiting, as Tom Petty once sang, is the hardest part. And fortunately for investors, who've been eagerly anticipating the latest take on the economy from the Federal Reserve, the waiting is over.
Question: I'm 65, retired and have about 50% of my portfolio in a bond index fund. I'm thinking of switching to a short-term bond fund. Do you think that's a good idea? --Judy, Flowery Branch, Georgia
Making money in bonds used to be so simple: All you had to do was put your dough into U.S. Treasuries and watch it rise. Had you held your entire portfolio in U.S. government issues -- which have a minuscule chance of default because they're backed by the full faith and credit of Uncle Sam -- you'd have earned an annualized return of 8.5% over the past two decades. That's about half a percentage point a year ahead of the stock market and three points above their historical average.
The flight-to-safety crowd could be in for a bumpy landing.
Question: My wife and I have two small kids and we're saving for a house that we'd like to buy within the next two years. We've got a significant pot of cash (more than $100,000) that we almost invested before the market tanked, but thankfully did not. I'm now wondering, however, whether I should invest some or all of it to grow our house fund more quickly or whether I should just keep this money liquid. What do you think? -- Dave, Boston, Mass.
Question: I'm 26 and want to set up a diversified portfolio for retirement. I'm almost totally invested in stocks, but I know that I should put some money into bonds. I really don't understand how they work, however, and I don't feel comfortable investing in something I don't understand. For example, I think I get the basic idea of a bond, but when I see bond yields fluctuate, I get confused. Aren't they supposed to have a consistent interest rate? --John, Portchester, New York
Treasurys were mixed Friday as investors digested this week's record auctions and eyed gains in more risky markets.
Treasurys were mixed Thursday, with the 10-year note edging lower following a $16 billion auction of 30-year bonds that was met with lackluster demand.
Treasurys were mixed Tuesday after the most recent auction in this week's record $81 billion offering of U.S. debt drew strong demand.
Treasury prices mostly fell Monday, with the 10-year note holding modest gains, as the government prepares to sell $81 billion worth of debt this week and as stock markets advanced, undermining demand for safe haven assets.
The government is finding no shortage of willing buyers for its debt as the shaky economy continues to spur demand for safe haven assets.
Bond prices fell Wednesday after the Federal Reserve released its latest report showing signs of a stabilizing economy.
You already know that to protect yourself against stock market meltdowns, you should devote more of your portfolio to bonds as you age. But as you may have discovered recently, the downside protection you get can vary dramatically depending on the type of bonds you own.
Question: My wife and I keep $20,000 in a passbook savings account as an emergency reserve. What's driving me crazy is that we're getting only 60 cents a month in interest. I like the security of the account and the immediate access, but 60 cents a month on 20 grand???? How can I do better? --Dale F., Waldorf, Maryland
Treasurys held gains Wednesday after the most recent phase of this week's $78 billion offering of U.S. debt received above-average demand.
Treasurys fell Monday after the government received strong demand for its sale of $7 billion worth of 10-year Treasury Inflation Protected Securities.
Stocks took a beating Thursday and didn't recover much Friday following the news that the job market took another turn for the worse in September.
Treasurys were mixed Tuesday, with the 30-year bond rising following a surprise drop in consumer confidence, while shorter-term debt was pressured by concerns about the Federal Reserve's interest rate policy.
Question: I just heard that the federal government is no longer insuring money market accounts for their $1 per share value. Is that correct? --Terry, Las Vegas, Nevada
Question: I'm 63 and planning to retire in three years. I'm considering investing in high-yield bond funds because they generate good income. Do you think I should do this and, if so, what percentage of my portfolio allocation should I devote to high-yield funds? --Frank, Groveport, Ohio
It looks as if China still can't get enough of one of America's finest exports: our debt.
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