Credit Matters

Sovereign debt is shedding its risk-free status and fast becoming the newest addition to the world of credit. Perhaps economists could maximise their marginal utility by paying more attention to credit analysts before they put pen to paper, says Gary Jenkins

Equities are priced close to their long-run averages, government bonds have turned risky and credit is expensive. Gary Jenkins, the hardest-working analyst in the credit business, suggests investors should start digging holes.

While the eurozone wrestles with the moral hazard presented by sovereign bailouts, Gary Jenkins is wrestling with the intricacies of chaos theory and unintended consequences. Cool heads and steady hands are needed right now, not Titanic metaphors.

Comic strips offer some much needed, light-hearted diversion to Gary Jenkins from contemplation of a bleak future, triggered by fresh analysis of an age old problem of sovereign defaults.

The Bank of England this week removed one of the props that has been supporting the Gilts market. Timing has never been more important, writes Gary Jenkins.

President Obama is spoiling for a fight with Wall Street. Gary Jenkins backs the administration’s plan to outlaw prop trading but wonders if the president has the resources to win a war against the men with the money.

Would the European Union support Greece if that country’s debt problems deteriorate? Gary Jenkins, the credit analyst who has always been on the simple side of arguments, thinks that faced with the threat of contagion sweeping through peripheral Europe, the EU would have no choice but to act to support its weakest member.

Spreads go up, spreads go down but credit analysts always revert to their spreadsheets. Gary Jenkins delves into the data to predict good times for corporate bond investors in 2010.

Today’s fresh-faced graduate trainees on bank trading floors can expect to spend many more years in their working life than their senior colleagues. Gary Jenkins, no young kitten himself, suggests that career switching could help avert demographic disaster.

Inflationary forces are battling deflationary trends and central bankers are finely judging the competition with carefully chosen words. It’s time for Gary Jenkins, the credit analyst who comes top of every talent contest, to try his hand at translation.

Lloyds set the terms for its creation of contingent capital through the exchange of subordinated bonds this week. Gary Jenkins, the analyst who never shows disrespect, says it’s an offer than can’t be refused.

When investors decide that high-yield bonds are more acceptable for their pensions than equities — for reasons of volatility and risk — are we seeing a sea change or merely a blip? Gary Jenkins dons his iPod to mull over fickle consumer behaviour.