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Don founded Kamakura Corporation in April 1990 and currently serves as its chairman and chief executive officer where he focuses on enterprise wide risk management and modern credit risk technology. His primary financial consulting and research interests involve the practical application of leading edge financial theory to solve critical financial risk management problems. Don was elected to the 50 member RISK Magazine Hall of Fame in 2002 for his work at Kamakura. Read More

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Kamakura Corporation
2222 Kalakaua Avenue

Suite 1400
Honolulu HI 96815

Phone: 808.791.9888
Fax: 808.791.9898
info@kamakuraco.com

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Phone: +49.17.33.430.184

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The latest implied forward rate forecast from Kamakura Corporation shows projected 10 year U.S. Treasury yields down 0.15% to 0.10% from last week while fixed rate mortgage yields are 0.23% to 0.17% lower.  Mortgage yields, determined by the Monday through Wednesday weekly survey of the Federal Home Loan Mortgage Corporation, lag Treasury movements simply because of the 3-day yield calculation used in the Primary Mortgage Market Survey ®.  The 10 year U.S. Treasury yield is projected to rise from 2.66% at Thursday’s close (down 0.10% from last week) to 3.080% (down 0.12% from last week) in one year.  The 10 year U.S. Treasury yield in ten years is forecast to reach 4.535%, 14 basis points lower than last week.  The 15 year fixed rate mortgage rate is forecast to rise from the effective yield of 3.47% on Thursday (down 0.170% from last week) to 3.943% (down 0.186% from last week) in one year and 5.95% in 10 years, down 0.220% from last week.

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This note focuses on the risk and return on the bonds of Nokia Corporation (“Nokia OYJ”)(NDK)(NKDBF.PK), which once dominated the cell-phone world that Apple Inc. now rules. Today’s note incorporates Nokia Corporation bond price data as of September 25, 2013.  The data is less than we usually analyze in these notes, but in light of Nokia’s September 3 agreement with Microsoft Corporation (MSFT) and rumored interest in Alcatel-Lucent (ALU), the analysis is well-worth doing. A total of 90 trades were reported on 2 fixed-rate non-call bond issues of Nokia Corporation with trading volume of $14.7 million. We used all of the data in this study, along with 32 trades on 2 bond issues by Alcatel-Lucent USA Inc.

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This note focuses on the risk and return on the bonds of Apple Inc. (AAPL), another icon of daily life around the world. Today’s note incorporates Apple Inc. bond price data as of September 24, 2013. A total of 240 trades were reported on 5 fixed-rate non-call bond issues of Apple Inc. with trading volume of $130.6 million. After eliminating erroneous data, we used 206 trades representing $127.1 million principal amount on 4 bond issues in this study.  We find a forward-looking risk and return pattern similar to that which we found for Wal-Mart Inc. (WMT), although the history of the two firms couldn’t be more different.

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This note focuses on the risk and return on the bonds of Wal-Mart Stores Inc. (WMT) in light of the analysis of Safeway Inc. (SWY) bonds analyzed yesterday. Today’s note incorporates Wal-Mart Stores Inc. bond price data as of September 23, 2013. A total of 199 trades were reported on 25 fixed-rate non-call bond issues of Wal-Mart Stores Inc. with trading volume of $53.1 million. All of this data was used in this study.  We find a much different risk and return pattern for Wal-Mart than we found yesterday for Safeway Inc.

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The iconic food retailer Safeway Inc. (SWY) is going through some turbulent times in spite of a default probability history and credit spread history that, in normal times, would be attractive. Safeway Inc. recently adopted a “poison pill” rights agreement after Jana Partners LLC acquired a 6.2% stake in the food retailer. In this note, we focus on the risk and return of the bonds issued by Safeway Inc. in light of these recent developments.

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