Ken Kapner

Inflation The press is abuzz with inflation news. Since the great recession, inflation has been extremely low, primarily registering below the Federal Reserve’s target of 2%. Recently though, inflation has increased above the Fed’s target with the Consumer Price Index coming in at over 5% for two straight months. The Fed has indicated that they […]

The Evolution of Student Loans The new administration and the hyperbole around socialism has led many pundits to discuss the student loans that are on the U.S. Government’s balance sheet. There are currently over $1.5 trillion of student loans outstanding. These loans can be categorized as either government backed/originated or private student loans. This article looks […]

In July 2020, GFMI delivered a virtual seminar on Modern Monetary Theory (MMT). One of the questions posed to the audience was “Does too much money in the financial system, as measured by the monetary base, M1 or M2, cause inflation?” Nearly 70% of the respondents believed it did. This perspective aligns with the more […]

Over the last year, there has been a lot pf press regarding negative yield curves and the ability of an inverted curve to predict a recession. There are other indicators that market practitioners use to foretell a recession, such as the ISM purchasing managers’ report and consumer sentiment. Now there is a new kid on […]

Negative convexity is a feature often found in callable bonds and mortgage backed securities. For this blog, the focus will be on agency MBS. Its source is the embedded option that allows for prepayment of principal prior to final maturity. This blog will examine negative convexity, how portfolio managers can hedge the risk associated with […]

The Capital Markets are part of the global financial system that brings together investors and borrowers. Technically, the word capital implies a longer term, but the timing of when “short-term” actually becomes “long-term” has become a bit of a gray area. Generally speaking, short-term refers to money markets, or for a text book definition, less […]

There were a lot of reasons for the 2008 credit crisis. Some of these included poor underwriting on personal mortgage loans, investors not doing their due diligence on investments, individuals lying on their mortgage applications, and government interference, to name just a few. Another cause resulted from credit rating agencies giving Collateralized Debt Obligations (CDOs) […]

In our LIBOR Schmibor article series, I introduced SOFR (See https://www.gfmi.com/articles/libor-schmibor-whats-next-sofr-part/). SOFR issuance continues to expand including the potential use in adjustable rate mortgages. (To view a user’s guide for SOFR, go to https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2019/Users_Guide_to_SOFR.pdf.) In this article, we intend to explore futures on SOFR, specifically 3-month SOFR futures (SFR) and compare this to 3-month Eurodollar […]

Technology has changed how the capital and financial markets operate. It is easy to identify some of these changes under the banner of Fintech (Financial Technology) including electronic trading, blockchain, peer to peer lending, robo-advisors, and crowdfunding. But what about capital markets and financial training? Technology has also made extensive inroads versus the traditional classroom […]

Interest rate swaps denominated in US dollars (an agreement between two counterparties to exchange a fixed rate of interest for a floating rate of interest for a specific period of time calculated on a notional principal amount) have been in existence since the early 1980s, and most commonly have been priced historically with a floating […]

GFMI’s Newest Article The history of marijuana is one fraught with varying degrees of acceptance, illegality, utility, and recreation. As noted in GFMI’s most recent article, Marijuana Related Businesses (MRBs): High Hopes for a Fast-Growing Industry: In the United States, ten states have legalized pot for recreational use, 33 allow it for medicinal applications, and […]

In late 2017, GFMI’s President and CEO, Ken Kapner, wrote an article about the London Interbank Offered Rate (LIBOR), which is used by capital markets participants as the rate by which they would lend each other money. For a variety of reasons, including the realization that the rate was being manipulated, banks, governments, and other […]