How To Calculate Bond Quotes

Why do I trust you?” Gal asks. My blood runs cold. But Gal’s tone isn’t cruel or calculating. It’s hopeful. Warming. He’s on to something. “Maybe you don’t trust me—I wouldn’t blame you if you didn’t, after everything—but I trust you with my life. I know I can trust you because you throw your life on the line to save me. Time and time again, no matter how little I deserve it. You’ve sacrificed everything for me.

Why are women so ungenerous to other women? Is it because we have been tokens for so long? Or is there a deeper animosity we owe it to ourselves to explore? A publisher...couldn't understand why women were so loath to help each other.... The notion flitted through my mind that somehow, by helping..., I might be hurting my own chances for something or other -- what I did not know. If there was room for only one woman poet, another space would be filled.... If I still feel I am in competition with other women, how do less well-known women feel? Terrible, I have to assume. I have had to train myself to pay as much attention to women at parties as to men.... I have had to force myself not to be dismissive of other women's creativity. We have been semi-slaves for so long (as Doris Lessing says) that we must cultivate freedom within ourselves. It doesn't come naturally. Not yet. In her writing about the drama of childhood developments, Alice Miller has created, among other things, a theory of freedom. in order to embrace freedom, a child must be sufficiently nurtured, sufficiently loved. Security and abundance are the grounds for freedom. She shows how abusive child-rearing is communicated from one generation to the next and how fascism profits from generations of abused children. Women have been abused for centuries, so it should surprise no one that we are so good at abusing each other. Until we learn how to stop doing that, we cannot make our revolution stick. Many women are damaged in childhood -- unprotected, unrespected, and treated with dishonesty. Is it any wonder that we build up vast defences against other women since the perpetrators of childhood abuse have so often been women? Is it any wonder that we return intimidation with intimidation, or that we reserve our greatest fury for others who remind us of our own weaknesses -- namely other women? Men, on the other hand, however intellectually condescending, clubbish, loutishly lewd, are rarely as calculatingly cruel as women. They tend, rather, to advance us when we are young and cute (and look like darling daughters) and ignore us when we are older and more sure of our opinions (and look like scary mothers), but they don't really know what they're doing. They are too busy bonding with other men, and creating male pecking orders, to pay attention to us. If we were skilled at compromise and alliance-building, we could transform society. The trouble is: we are not yet good at this. We are still quarrelling among ourselves. This is the crisis feminism faces today.

Fiat-money! Let the State 'create' money, and make the poor rich, and free them from the bonds of the capitalists! How foolish to forego the opportunity of making everybody rich, and consequently happy, that the State's right to create money gives it! How wrong to forego it simply because this would run counter to the interests of the rich! How wicked of the economists to assert that it is not within the power of the State to create wealth by means of the printing press!- You statesmen want to build railways, and complain of the low state of the exchequer? Well, then, do not beg loans from the capitalists and anxiously calculate whether your railways will bring in enough to enable you to pay interest and amortization on your debt. Create money, and help yourselves.

Economics should help us rise above fear and greed. It should not exploit these feelings. Economic science should be about how one turns a social vision into a modern economic system. It should be a tool to create opportunities for human and social development. Not just address our fears as they are expressed as demand in the market. It should be devoted to concrete questions that are important for humanity. Not to abstract analyses of hypothetical choices. It should see people as reasonable beings. Not as wagons hooked to the consequences of an unavoidable, coercive rationality. It should see people as embedded in society. Not as individuals whose core never changes and who float in a vacuum at an arm’s length from each other. It should see relationships as fundamental for us to even be able to individuate ourselves. Not as something that can be reduced to competition, profit, loss, buying low, selling high and calculating who won. It should see a person as someone who acts according to her bonds with others. Not just out of self-interest and the denial of all context and power relationships. It should not see self-interest and altruism as opposites – because it should no longer view the surrounding world as something that is in opposition to one’s self.

During his time working for the head of strategy at the bank in the early 1990s, Musk had been asked to take a look at the company’s third-world debt portfolio. This pool of money went by the depressing name of “less-developed country debt,” and Bank of Nova Scotia had billions of dollars of it. Countries throughout South America and elsewhere had defaulted in the years prior, forcing the bank to write down some of its debt value. Musk’s boss wanted him to dig into the bank’s holdings as a learning experiment and try to determine how much the debt was actually worth. While pursuing this project, Musk stumbled upon what seemed like an obvious business opportunity. The United States had tried to help reduce the debt burden of a number of developing countries through so-called Brady bonds, in which the U.S. government basically backstopped the debt of countries like Brazil and Argentina. Musk noticed an arbitrage play. “I calculated the backstop value, and it was something like fifty cents on the dollar, while the actual debt was trading at twenty-five cents,” Musk said. “This was like the biggest opportunity ever, and nobody seemed to realize it.” Musk tried to remain cool and calm as he rang Goldman Sachs, one of the main traders in this market, and probed around about what he had seen. He inquired as to how much Brazilian debt might be available at the 25-cents price. “The guy said, ‘How much do you want?’ and I came up with some ridiculous number like ten billion dollars,” Musk said. When the trader confirmed that was doable, Musk hung up the phone. “I was thinking that they had to be fucking crazy because you could double your money. Everything was backed by Uncle Sam. It was a no-brainer.” Musk had spent the summer earning about fourteen dollars an hour and getting chewed out for using the executive coffee machine, among other status infractions, and figured his moment to shine and make a big bonus had arrived. He sprinted up to his boss’s office and pitched the opportunity of a lifetime. “You can make billions of dollars for free,” he said. His boss told Musk to write up a report, which soon got passed up to the bank’s CEO, who promptly rejected the proposal, saying the bank had been burned on Brazilian and Argentinian debt before and didn’t want to mess with it again. “I tried to tell them that’s not the point,” Musk said. “The point is that it’s fucking backed by Uncle Sam. It doesn’t matter what the South Americans do. You cannot lose unless you think the U.S. Treasury is going to default. But they still didn’t do it, and I was stunned. Later in life, as I competed against the banks, I would think back to this moment, and it gave me confidence. All the bankers did was copy what everyone else did. If everyone else ran off a bloody cliff, they’d run right off a cliff with them. If there was a giant pile of gold sitting in the middle of the room and nobody was picking it up, they wouldn’t pick it up, either.” In

The adjective “efficient” in “efficient markets” refers to how investors use information. In an efficient market, every titbit of new information is processed correctly and immediately by investors. As a result, market prices react instantly and appropriately to any relevant news about the asset in question, whether it is a share of stock, a corporate bond, a derivative, or some other vehicle. As the saying goes, there are no $100 bills left on the proverbial sidewalk for latecomers to pick up, because asset prices move up or down immediately. To profit from news, you must be jackrabbit fast; otherwise, you’ll be too late. This is one rationale for the oft-cited aphorism “You can’t beat the market.” An even stronger form of efficiency holds that market prices do not react to irrelevant news. If this were so, prices would ignore will-o’-the-wisps, unfounded rumors, the madness of crowds, and other extraneous factors—focusing at every moment on the fundamentals. In that case, prices would never deviate from fundamental values; that is, market prices would always be “right.” Under that exaggerated form of market efficiency, which critics sometimes deride as “free-market fundamentalism,” there would never be asset-price bubbles. Almost no one takes the strong form of the efficient markets hypothesis (EMH) as the literal truth, just as no physicist accepts Newtonian mechanics as 100 percent accurate. But, to extend the analogy, Newtonian physics often provides excellent approximations of reality. Similarly, economists argue over how good an approximation the EMH is in particular applications. For example, the EMH fits data on widely traded stocks rather well. But thinly traded or poorly understood securities are another matter entirely. Case in point: Theoretical valuation models based on EMH-type reasoning were used by Wall Street financial engineers to devise and price all sorts of exotic derivatives. History records that some of these calculations proved wide of the mark.

Explaining their allure, Milken said, “The opportunity to be true to yourself in high-yield bonds is great. It is not like buying a stock. With a stock, its value is generally dependent upon investors’ collective perceptions of the future. No matter how much research you have done regarding a particular stock, you don’t have a contract as to what the future price will be. But with a high-yield bond there is a date certain in the future when it matures, and if you hold it to maturity and your analysis is correct, you will be correct in your calculation of your yield—and you do have a contract as to future price. One is certain if you’re right. The other is not.

I can explain this more easily by an example. Suppose the one-year interest rate is 5 percent and the two-year interest rate is 10 percent. This is a very steep yield curve. Suppose you want to put $100 in savings away for two years. You can either (1) lock in 10 percent for two years, or (2) lock in 5 percent for one year, and wait to see what rate you can earn during the second year. Which would you do? If you lock in 10 percent for two years, and the one-year interest rate stays the same at 5 percent, you are better off. But if you lock in 10 percent for two years, and the one-year interest rate soars to 50 percent, you are worse off. What is the one-year break-even rate? In other words, how much would one-year rates need to increase before you earned the same return with either strategy? The answer—about 15 percent—is the one-year forward rate for one year. That is, the current yield curve is predicting, based on current trading between one and two year bonds, that in one year 15 percent will be the one-year rate. The actual rate in one year might be 15 percent, or it might not. The 15 percent rate is implied by current rates. There are elaborate formulas for calculating all the forward rates for every maturity and for deriving an entire forward curve, but the analysis is no more difficult than the above example.

We have seen what significance, given socialism, the wealth of human needs acquires, and what significance, therefore, both a new mode of production and a new object of production obtain: a new manifestation of the forces of human nature and a new enrichment of human nature. Under private property their significance is reversed: every person speculates on creating a new need in another, so as to drive him to fresh sacrifice, to place him in a new dependence and to seduce him into a new mode of enjoyment and therefore economic ruin. Each tries to establish over the other an alien power, so as thereby to find satisfaction of his own selfish need. The increase in the quantity of objects is therefore accompanied by an extension of the realm of the alien powers to which man is subjected, and every new product represents a new potentiality of mutual swindling and mutual plundering. Man becomes ever poorer as man, his need for money becomes ever greater if he wants to master the hostile power. The power of his money declines in inverse proportion to the increase in the volume of production: that is, his neediness grows as the power of money increases. The need for money is therefore the true need produced by the economic system, and it is the only need which the latter produces. The quantity of money becomes to an ever greater degree its sole effective quality. Just as it reduces everything to its abstract form, so it reduces itself in the course of its own movement to quantitative being. Excess and intemperance come to be its true norm. Subjectively, this appears partly in the fact that the extension of products and needs becomes a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites. Private property does not know how to change crude need into human need. Its idealism is fantasy, caprice and whim; and no eunuch flatters his despot more basely or uses more despicable means to stimulate his dulled capacity for pleasure in order to sneak a favour for himself than does the industrial eunuch – the producer – in order to sneak for himself a few pieces of silver, in order to charm the golden birds, out of the pockets of his dearly beloved neighbours in Christ. He puts himself at the service of the other’s most depraved fancies, plays the pimp between him and his need, excites in him morbid appetites, lies in wait for each of his weaknesses – all so that he can then demand the cash for this service of love. (Every product is a bait with which to seduce away the other’s very being, his money; every real and possible need is a weakness which will lead the fly to the glue-pot. General exploitation of communal human nature, just as every imperfection in man, is a bond with heaven – an avenue giving the priest access to his heart; every need is an opportunity to approach one’s neighbour under the guise of the utmost amiability and to say to him: Dear friend, I give you what you need, but you know the conditio sine qua non; you know the ink in which you have to sign yourself over to me; in providing for your pleasure, I fleece you.) This estrangement manifests itself in part in that the sophistication of needs and of the means (of their satisfaction) on the one side produces a bestial barbarisation, a complete, crude, abstract simplicity of need, on the other; or rather in that it merely reproduces itself in its opposite. Even the need for fresh air ceases to be a need for the worker. Man returns to a cave dwelling, which is now, however, contaminated with the pestilential breath of civilisation, and which he continues to occupy only precariously, it being for him an alien habitation which can be withdrawn from him any day – a place from which, if he does ||XV| not pay, he can be thrown out any day.

[Aza Raskin] designed something that distinctly changed how the web works. It's called 'infinite scroll.' Older readers will remember that it used to be that the internet was divided into pages, and when you got to the bottom of one page, you had to decide to click a button to get to the next page. It was an active choice. It gave you a moment to pause and ask: Do I want to carry on looking at this? Aza designed the code that means you don't have to ask that question any more. ...It downloads a chunk of status updates for your to read through ...when you get to the bottom, it will automatically load another chunk for your to flick through. ...'At the outset, it looks like a really good invention,' he told me. He believed he was making life easier for everyone. He had been taught that increased speed and efficiency of access were always advances. his invention quickly spread all over the internet ...But then Aza watched as the people around him changed. They seemed to be unable to pull themselves away from their devices, flicking through and through and through, thanks in part to the code he had designed. He found himself infinitely scrolling through what he often realised afterwards was crap, and he wondered if he was making good use of his life. ...Aza sat down and did a calculation. At a conservative estimate, infinite scroll makes you spend 50 percent more of your time on sites like Twitter. (For many people, Aza believes, it's vastly more.) Sticking with this low-ball percentage, Aza wanted to know what it meant, in practice, if billions of people were spending 50 percent more time on a string of social media sites. When he was done, he stared at the sums. Every day, as a direct result of his invention, the combined total of 200,000 more total human lifetimes - every moment from birth to death - is now spent scrolling through a screen. These hours would otherwise have been spent on some other activity. When he described this to me, he sounded a little stunned. That time is 'just completely gone. It's like their entire life - poof. That time, which could have been used for solving climate change, for spending time with their family, for strengthening social bonds. For whatever is it that makes their life well-lived. It's just...' He trailed off.

Come on, I mean it, tell me, how does it work?' said Maxentius-Drontio. 'I am interested, and not just because I am bored.' 'Hmm, calculating potential for targeted, induced social embarrassment.' The magos stopped, stock-still. Something clicked in his chest. 'Risks acceptable. Bond with me. Pass me that size nine molecular manipulator, please, in order to initiate emotional pairing,' said Fe.

A 360-day year also made the calculation of interest very convenient. Indeed, even today, the calculation for corporate and municipal bond interest accruals is based on a 360-day year. It is tempting to think of the Sumerian administrative year as a kind of idealized, cleaner, improved year—a year as mathematicians and administrators might like it, as opposed to time as defined by astronomical reality. In short, the Sumerians invented a model of time that would serve well as a framework for analyzing periodic economic phenomena. It was also a development of remarkable hubris; the assertion of human’s time over natural time.

However, a small flaw developed in this market that had dire consequences years later. No one added the coupon accrued interest to their Repo transactions. Coupon accrued interest is the interest that accrues on a bond between semi-annual coupon payment dates. Basically, a bond accrues a little bit of interest each day. The value of a bond increases each day by that small amount of one day’s worth of coupon interest. In the 1950s Repo market, in order to keep things simple, Repo transactions were priced with just the principal amount of the trade. The bond’s Repo price was calculated by simply multiplying the bond’s par amount by the market price. No one added on the accrued interest. Picture this: It’s the 1950s and you don’t have a mainframe computer, calculator, or even a phone that makes basic calculations. Yes, there were hand calculations and tables that the back-office used to calculate yields and bond prices, but can you imagine how long that takes? At the time, it made back-office work just a lot easier by leaving the coupon accrued interest off of the trade. This had dire consequences down the road.

Figuring out how to allocate your assets doesn’t need to be difficult. Obviously, as my grandmother liked to remind me, you don’t want to keep all your eggs in one basket. But how do you know what proportion of your nest egg should be invested in equities vs. fixed-income securities? There are all sorts of ways to calculate this. For my part, I prefer the following simple rule of thumb. Take your age and subtract it from 110. The number you get is the percentage of your assets that should go into equities; the remainder should go into bonds or other fixed-income investments.

Seven years ago tonight, every dream I ever had came true. That's not something too many men get to claim. I'm very lucky, blessed, whichever you believe. Probably a lot of both. Tonight marks the anniversary of my debut performance at Ceasars Palace." On his cue, the crowd whipped into congratulary rapture. Blindsided by his recollection, Isavel was motionless. That's what he recalls happening on this date? "Indulgent, lazy, self-centered... jerk!" she said, grabbing her purse, thinking she'd climb over the seat. "I'm going home!" Before she could turn, hositing herself over, a spotlight landed on her. In the darkened arena Aidan and Isabel were face-to-face. He stared. The same way he did years ago in his pickup truck, holding tight to her wrist, the same way he did on the dance floor at the gala. The same way he did in the moment she left him. "If you can believe it," he said, still staring, "something even more important happened that day. As dreams of fame and fortune go, this topped everything. I've always know that." Then, in a softer voice: "And I'm a fool because I should have never given up." Even from her vantage point, Isabel could see the gulp roll through his throat. "It's my great privilege this evening to introduce my wife, Isabel Royce." He gestered to the box. Isabel responded by sinking to her seat. "What's he talking about?" she hissed to Mary Louise. "We're divorced!" From her right, Tanya nudged her. It was like being on a palace balcony, Isabel offering a deer-in-the-headlights wave to the subjects, a thoroughly baffled look at Aidan. In return, he smiled at her clear confusion. "My wife ..." Why is he calling me that? There was a mixed reaction, lots of gasps, some applause, and the disappointed groans from female fans. "She's done me the tremendous honor of making a rare appearance at one of my shows. Seven years ago, she agreed to marry me. At the time, my life was more trouble than promise. We were two scared kids who had nothing but each other. Really, it was all I needed. We were married in true Vegas fashion." Hoots and hollers echoed, his glance dropping to the stage floor. Sharing this was making the performer uncomfortable. He pushed on. "While most women would have been satisfied with a ring ... " His long fingers fluttered over the snake. "This was Isabel's idea of a permanent bond." It drew a wave of subtle laughter, Isabel included. "Do you remember how the story went?" he said, speaking only to Isabel in a crowd of thousands. "As long as I had it, I'd never be without you. Turns out, it wasn't a story, it was the absolute truth. Lately though," he said, turning back to his public narrative, "circumstance, some serious, some calculated, has prevented me from getting my wife's attention. So tonight I resorted to an old performer's trick, a captive audience. I planned this moment, Isabel, knowing you'd be here. Regardless of anything you may believe, I meant what I said on our wedding night, in the moment I said it. I love you. I always have.

Hence, after this foreshortened discussion of the major considerations, we once again enunciate the same basic compromise policy for defensive investors—namely that at all times they have a significant part of their funds in bond-type holdings and a significant part also in equities. It is still true that they may choose between maintaining a simple 50–50 division between the two components or a ratio, dependent on their judgment, varying between a minimum of 25% and a maximum of 75% of either. We shall give our more detailed view of these alternative policies in a later chapter. Since at present the overall return envisaged from common stocks is nearly the same as that from bonds, the presently expectable return (including growth of stock values) for the investor would change little regardless of how he divides his fund between the two components. As calculated above, the aggregate return from both parts should be about 7.8% before taxes or 5.5% on a tax-free (or estimated tax-paid) basis. A return of this order is appreciably higher than that realized by the typical conservative investor over most of the long-term past. It may not seem attractive in relation to the 14%, or so, return shown by common stocks during the 20 years of the predominantly bull market after 1949. But it should be remembered that between 1949 and 1969 the price of the DJIA had advanced more than fivefold while its earnings and dividends had about doubled. Hence the greater part of the impressive market record for that period was based on a change in investors’ and speculators’ attitudes rather than in underlying corporate values. To that extent it might well be called a “bootstrap operation.” In

It’s not remotely likely, but then neither is anything. If the force of gravity were even slightly weaker, stars wouldn’t be dense enough to cross the Coulomb barrier and start thermonuclear fusion. It would be a completely dark universe. If gravity were slightly stronger, stars would burn too hot and fast, and there would be no life. If the attractive force between electrons and atomic nuclei were too weak, electrons couldn’t orbit; if it were too strong, atoms couldn’t bond with each other. Either way, there would be no molecules. There are more than thirty such parameters that must have almost the precise values that they do in order to permit a universe with life. The odds of that happening have been calculated to be one to the negative 230—that is to say, one chance in a number that has 229 zeros after it. Randomly finding a specific grain of sand on the first try among all the grains on earth would be millions of millions of times more likely than the universe existing. And yet here we are.