Search results for: consumer debt

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Interest rates in a highly indebted economy

In a highly indebted economy, there is no fixed cap on the level of interest rates. Any increase in interest rates must be consistent with tolerable debt service ratios, the existing stock of debt and private sector savings.

Tagged with: Economy, Fixed Income, Investing, Markets

Political and fiscal reality finally trump willingness in Puerto Rico

The Puerto Rican government’s willingness to pay debt service on time and in full was finally overcome by economic and fiscal realities. The shift from impairing only some public corporation [i.e., Puerto Rico Electric Power Authority (PREPA)] debt to all Commonwealth debt was probably inevitable given the unwillingness to make draconian spending cuts, a lack of economic growth and dwindling liquidity across the entire Puerto Rican government complex, including the Government Development Bank (GDB).

Tagged with: Columbia Funds, Economy, Fixed Income, Muni Perspectives, Muni Perspectives Blog, Municipal Bonds

Harnessing Fixed-Income Returns Through The Cycle

There are four unique, major fixed-income risks – duration, credit, inflation and currency – and different fixed-income investments respond to them differently. Applying a full understanding of the four risks to a fixed-income portfolio may yield a better risk-return outcome.

| | Tagged with: Asset Allocation, Fixed Income, Interest Rates, Investing, Portfolio Strategies

A big bite of the Apple?

We believe that the investment-grade universe has an adequate capital structure that balances shareholders and debtholders, suggesting the credit cycle is in the middle of the expansion stage. While Apple’s rise in debt has significantly outpaced its earnings growth, this is an appropriate capital structure for a maturing company.

Tagged with: Investing

Apparel retail doldrums

Since 2011, consumer spending has been below average overall, and spending on retail apparel has been especially poor. A host of factors, from shifting consumer priorities to poor inventory control have forced apparel retailers to compete on price, and sales and profitability have suffered dramatically.

Tagged with: U.S. Economy

Is Europe heading for Japanese-style deflation?

Although there are many differences that should ensure that the eurozone does not follow Japan‘s fate, policymakers will need to act forcefully if the risk of deflation intensifies. While the euro area appears to be on track to avert deflation in the short term, many euro countries are “one crisis away from deflation.”
The European Central Bank (ECB) claims to be ahead of the game, but policy needs to be more pro-active.

Tagged with: Global Economy, Investing

How will California’s drought affect water utility revenue bonds?

California is in its fourth year of drought, one of the worst in the past century. Key factors when assessing credit quality of water utilities are water supply sources and rate flexibility.

Tagged with: Municipal Bonds, U.S. Economy

Ramifications of Republican romp

Republicans exceeded expectations across the board, gaining control of the Senate and picking up significant net new seats in the House as well as in state capitols. We aren’t expecting the GOP to embark on a politically self-destructive path regarding debt limits and potential government shutdowns.

Tagged with: Equities, Investing, Markets

Detroit bankruptcy — One year later

Ability is not the same as willingness to pay. Political pressures continue to influence the Bankruptcy process, potentially to the detriment of bondholders and leaving politically-connected stakeholders more equal than others.

Tagged with: Fixed Income, New Tax Regime

The Greek tragedy unfolds

Although a Greek default and exit would be uncharted territory, the ownership structure of Greek debt has shifted considerably, and this should limit contagion within the wider eurozone. We suspect that the realization that the eurozone is no longer irrevocable would not be merely shrugged off by markets, particularly in the periphery.

Tagged with: Global Economy
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About Us

Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. With more than 2,000 people, including over 450 investment professionals based in North America, Europe and Asia, we manage $506 billion†† of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.

††In U.S. dollars as of March 31, 2015. Source: Ameriprise Q1 Earnings Release. Includes all assets managed by entities in the Columbia and Threadneedle groups of companies. Contact us for more current data.