Word: rising
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Dates: during 1960-1969
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...crisis has been long building. In a current book, The Price of Money, Sidney Homer and Richard Johannesen date the bear market in bonds from 1946, when high-quality corporate debentures sold at interest rates of 2.45%. But the rise in rates and the concurrent drop in bond prices have speeded up enormously since the current inflation began in 1965-and especially this year. Last week, for example, the New Jersey Turnpike Authority sold $137 million worth of bonds at a tax-free interest yield of 7%, compared with a 5⅞ yield on bonds that it had sold four...
...buyers of bonds and mortgages, are being drained of cash by loans that they must make to policyholders who cannot get credit so cheaply elsewhere. But the bond-mortgage slump reflects even more the ravages of inflation. Corporations, for example, are hurrying to build new plants before construction costs rise even further (see following story), and are selling huge quantities of new bonds to raise the cash. This month U.S. corporations will try to market $1.2 billion worth of new bonds, their heaviest December financing in history...
...spite of President Nixon's tireless warnings that businessmen who bet on persistent inflation are bound to lose, the bets are still being placed. Wholesale commodity prices continued to rise at an estimated 4.8% annual rate in November. The index will almost certainly move up again this month because higher prices for nickel and lead were posted last week...
...rise in nickel prices had been expected, but the increase from $1.03 per Ib. to $1.28 was the largest in this century. Inco rested its case for the steep rise as much on its plan to spend $600 million for expansion by 1973 as it did on the wage increases. Even without the strike-induced shortage, the world demand for nickel has been outpacing supply, and the imbalance could continue for several years...
...they had better invest before prices go up still more. During this year's third quarter, according to the National Industrial Conference Board, capital budgets of the nation's 1,000 largest manufacturers went up at an annual rate of 3.7%. That was not as big a rise as the 13% increase in the second quarter, but a rise nonetheless. Before businessmen bet less, the Administration will have to show them more convincing evidence that they are going to lose the game...