Mark to market in high yield debt

Companies will need to refinance an estimated $4 trillion of bonds over the next five years, about two-thirds of all their outstanding debt, according to Wells Fargo Securities. This has investors concerned because rising rates means it will cost more to pay for unprecedented amounts of borrowing, which could push balance sheets toward a tipping point. And on top of that, many see the economy slowing down at the same time the rollovers are peaking.

A rollover happens because you underestimated the pay off on you deal. Thus fewer deposits are available for the loans needed. See? 

The idea is that you get a loan, do some sneaky thing to raise productivity, the get in your early deposit before it is due. That causes the currency banker lose a bit of money.  This is correct, pretending otherwise causes crowded loan queue at roll over.

Do not pretend to compound, rather utilize asynchronous interest charges, as needed, to match the loan and deposit queues. Thus the currency banker is always the first to mark to market. The currency  banker has one mission, make ratios work reasonably well, and its tradebook is the optimum observable, loan/deposit ratio.  The WalMart shopper keep that ratio, then relative pricing implies relative scarcity. I suspect Coinbase knows how to do this.

Central banker is a three queue match, but works great in the sandbox. We got both the world's best math and best mathematicians. Jump in.