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This chapter examines momentum in the corporate bond market using a comprehensive data set that includes bonds with different characteristics and provisions. We find that momentum exists in a wide range of corporate bonds. The momentum effect is more significant for callable bonds and lower-rated bonds. This effect cannot be explained by standard risk factors and liquidity in the bond market. Bond momentum prevails over time and remains strong even after the corporate bond market becomes more transparent and liquid with establishment of TRACE. The high magnitude of momentum profits casts doubt that they can be explained by risk-based theories.

In his autobiography, Chen Shui-bian (1999, p. 40) condemned the Koumintang's (KMT's) corruption and praised the Democratic Progressive Party (DPP) for being free from money politics and corruption. The DPP fought the 1992 Legislative Yuan election campaign effectively on an anticorruption platform and used the same strategy in subsequent elections. If Chen Shui-bian had criticized the KMT for its involvement with “black gold” politics and had won the 2000 presidential election on his anticorruption platform, why was he and his family found guilty of corruption after his second term of office? The short answer is that even though he had promised to curb corruption, President Chen himself had succumbed to corruption after assuming office. In June 2002, Keesing's Contemporary Archives cited a poll in Taiwan that indicated that more respondents had perceived the DPP to be more corrupt than the KMT (Copper, 2006, p. 14).