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As volatile market conditions continue and seem to be accelerating on a daily basis, questions are being increasingly raised regarding the risks posed to investors and the relationship of margin to those risks. Investors who sign a margin agreement can borrow up to 50% of the purchase price of marginable investments (the exact amount varies […]
With historically low interest rates before the recent market crash, corporate debt has skyrocketed. According to the Federal Reserve Bank of St. Louis, Nonfinancial Corporate Business Debt has eclipsed $6.5 Trillion. Low interest rates have given rise to “zombie corporations.” A “zombie corporation” only generates enough revenue to service its own debt, and as a result, […]
US companies will soon lose their coveted top-quality credit ratings, sending their debt tumbling into the rating category known as “junk.” A cut in rating below investment-grade — marked by the threshold between triple B and double B — indicates a stern warning from the likes of Moody’s and S&P Global for companies to improve […]
With the influx in volatility and the arrival of the U.S. stock market’s first Bear Market in more than a decade, those trading on margin may be exposed to forced liquidations and/or margin calls following the market’s recent, aggressive selloff. Broker-dealers require those trading on margin to maintain as collateral a specified percentage of qualified […]
H2O Asset Management’s bond funds have lost nearly half their value in a matter of weeks, after the London-based fund manager experienced another day of severe losses on Thursday. H2O, a subsidiary of French bank Natixis that managed about €30bn of assets at the start of the year, has emerged as one of Europe’s highest-profile […]