Lebanese bonds: stable but vulnerable

As the world markets, mature and emerging, went through the turbulent transition from low rates by the Federal Reserve to “a measured and consistent rise,” most bond markets suffered. In fact all bond markets suffered. The reverberations of each pronouncement by Federal Reserves chieftain, Alan Greenspan, are felt all over, in commodities, equities, but most importantly, in fixed income securities. This is a universal occurrence, except for Lebanon. Lebanon has been outstanding at being exceptional in almost every conceivable measure over its history. In this case, while the entire curve of interest rates gyrated all over the world, Lebanese bonds remained unmoved. In fact, expecting a big hike in Lebanese Republic rates (move down in price), I called some of my contacts a day after some inflation numbers in the US rattled every market from Kuala Lumpur to Sao Paolo. Guess what? Lebanon bonds were unchanged. It is important to