Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, September 19, 2013
The QE Taper That Wasn't / Interest-Rates / Quantitative Easing
By: Peter_Schiff
The Fed's failure today to announce some sort of tapering of its QE program, despite the consensus of an overwhelming percentage of economists who expected action, once again reveals the degree to which mainstream analysts have overestimated the strength of our current economy. The Fed understands, as the market seems not to, that the current "recovery" could not survive without continuation of massive monetary stimulus. Mainstream economists have mistaken the symptoms of the Fed's monetary expansion, most notably rising stock and real estate prices, as signs of real and sustainable growth. But the current asset price bubbles have nothing to do with the real economy. To the contrary, they are setting up for a painful correction that will likely be worse than the one we experienced five years ago.
Wednesday, September 18, 2013
US Treasury Bonds Corrective Rally Could Forecast / Interest-Rates / US Bonds
By: Gregor_Horvat
I hate to say this again, but major pairs on the FX market place still have a very unclear price action and no direction at all on the intra-day basis. It’s probably “calm before the storm” ahead of highly anticipated FOMC press conference of the last few years, when Bernanke could announce tapering. Statement will be out at 18:00GMT and press conference will be scheduled 30 minutes later. So until then we may not see a lot of price action today.
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Friday, September 13, 2013
Which Way Will the US Federal Reserve Jump? / Interest-Rates / US Bonds
By: Submissions
Adam Green writes: The next 2-day monthly conference meeting of the US Federal Reserve is scheduled to begin on Tuesday, 17th September. Speculation has now been rampant for months about when the Fed will commence tapering its influential stimulus policies and what impact such actions would have on the financial markets. This article sets out to define the most likely possibilities. Read full article... Read full article...
Wednesday, September 11, 2013
Bond Markets Are No Longer Safe Havens From Stock Market Risks / Interest-Rates / US Bonds
By: EWI
Bond yields spike to a 2-year high
Two months ago, Federal Reserve Chairman Ben Bernanke said he was puzzled by the upward surge in Treasury yields. And bond yields are even higher now, reaching a two-year high on August 15.
But the rise in bond yields - and the concomitant drop in bond prices since they move inversely to yields - is no surprise to EWI analysts. EWI's June 2012 Special Report on bonds noted: "If rates do begin to rise as we expect, most observers will probably be fooled. Bulls on the economy may take the new trend as a sign of economic expansion."
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Wednesday, September 11, 2013
No Bond Market Vigilantes Or Vultures Need Apply / Interest-Rates / International Bond Market
By: Raul_I_Meijer
With media and technology becoming faster and more pervasive at a rapid clip, it shouldn't perhaps be a big surprise to see the ease with which war-mongering news flashes come to dominate the story of the day. But maybe this should be received with an increasing dose of skepticism, maybe we should today, even more than before, try to figure out who benefits from one story dominating all major headlines, as if all other things going on are only of secondary importance, especially since new technologies allow those headlines to become so much more pervasive, coming in at an ever faster rhythm, that they are today's true bombardments.
Wednesday, September 11, 2013
Why the Fed Needs to Taper Now in Spite of Weak Jobs Report / Interest-Rates / US Interest Rates
By: InvestmentContrarian
George Leong writes: The Federal Reserve will need to make a big decision soon, prior to its Federal Open Market Committee (FOMC) meeting in mid-September, regarding the continuation of its monetary policy. Before Friday’s non-farm payrolls report, the decision was somewhat easy to make on the heels of positive economic data and a good second-quarter gross domestic product (GDP) reading. The initial claims for the most recent week were the lowest since before the recession.
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Wednesday, September 11, 2013
How This Week’s Fed Meeting Could Impact Your Portfolio / Interest-Rates / US Interest Rates
By: InvestmentContrarian
Sasha Cekerevac writes: All eyes are on this week’s important Federal Reserve meeting, in which many analysts expect that the Federal Reserve will decide to begin to lower its $85.0-billion-per-month asset purchase program.
But things might not be that easy, since the report on job creation released last Friday is showing signs of deceleration.
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Sunday, September 08, 2013
David Stockman on his Book and the Bailouts / Interest-Rates / Credit Crisis Bailouts
By: MISES
Mises Institute: In the book, you oppose Bernanke’s view of the Great Depression, which you point out relies heavily on the views of Milton Friedman.
David Stockman: Bernanke has cultivated this idea that he is a brilliant scholar of The Great Depression, but that’s not true at all. What Bernanke did was basically copy Milton Friedman’s misguided and very damaging theory that the Federal Reserve didn’t expand its balance sheet fast enough by massive open market purchases of government debt during the Great Depression. Bernanke therefore claimed that monetary stringency deepened and lengthened the depression, but in fact interest rates plummeted during the crucial 1930-1933 period: credit contracted due to genuine and widespread insolvencies in the agricultural districts and industrial boom towns, causing bank deposits to shrink as a passive consequence. So Bernanke had cause and effect upside down — a historical error that he replicated with reckless abandon in response to the bursting of the housing and credit bubble in 2008.
Sunday, September 08, 2013
The Fed Has Wasted Trillions and the US Will Default / Interest-Rates / US Debt
By: Graham_Summers
The facts are now becoming abundantly clear, that the forecast we’ve maintained for well over two years has been validated: the US is in a DE-pression and both Washington and the Federal Reserve have wasted trillions of Dollars.
The reality is that what’s happening in the US today is not a cyclical recession, but a one in 100 year, secular economic shift.
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Saturday, September 07, 2013
PIMCO's Gross: Fed Will Still Taper After Jobs Report / Interest-Rates / Quantitative Easing
By: Bloomberg
PIMCO's Bill Gross appeared on "Bloomberg Surveillance" today, telling host Tom Keene: "I think Bernanke and company are committed to a taper...It will be taper lite as opposed to a strong tapering." Transcript below.
Gross on today's jobs report being the new normal:
"Yes, it sure was. And I guess the revision of last month was the biggest shocker. And the fall, of course, as you mentioned in terms of the participation rate from 63.4 to 63.2. You know, the unemployment rate is down, for those that focus on the unemployment rate, it is 7.3 percent. They would simply suggest we are closer to tapering and closer to a fed funds increase at some point. But I would suggest otherwise, that it is really a weaker economy as evidenced by today's report."
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Tuesday, September 03, 2013
Bond Markets Offer No Protection From Stock Market Risk / Interest-Rates / US Bonds
By: EWI
Bond yields spike to a 2-year high
Two months ago, Federal Reserve Chairman Ben Bernanke said he was puzzled by the upward surge in Treasury yields. And bond yields are even higher now, reaching a two-year high on August 15.
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Thursday, August 29, 2013
Higher Interest Rates - Bond Vigilantes Hold Upper Hand Over Central Banks / Interest-Rates / International Bond Market
By: Gary_Dorsch
Whenever former Fed chief Alan Greenspan was praised for delivering a clear message on US- monetary policy, he used to reply, "I guess I should warn you. If I turn out to be particularly clear, you've probably misunderstood what I've said." On June 7th, Greenspan set off the alarm bells on Wall Street by telling viewers of CNBC that the time had arrived for the Fed to begin tapering its $85-billion a month bond buying binge, even if the US-economy isn't ready for it. "The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve, - that everybody agrees is excessive, - the better," he said in a "Squawk Box" interview. "There is a general presumption that we can wait indefinitely and make judgments on when we're going to move. I'm not sure the market will allow us to do that."
Wednesday, August 28, 2013
The Global QE Exit Crisis, Guidance Schmidance / Interest-Rates / Quantitative Easing
By: John_Mauldin
In last week's Outside the Box, which included a paper from the San Francisco Federal Reserve on the effectiveness of quantitative easing, I wrote, "What [authors] Cúrdia and Ferrero are really saying is that the latest round of QE, massive as it has been, has not had all that much effect on the economy, and that other factors should be taken into account. I'm sure this thesis is somewhat controversial, and I look forward to seeing what QE proponents like David Zervos over at Jefferies have to say about it."
Monday, August 26, 2013
Will the Last Person to Exit the Treasury Market Please Turn Out the Lights / Interest-Rates / US Bonds
By: Michael_Pento
Wall Street and Washington love to spread fables that facilitate feelings of bliss among the investing public. For example, recall in 2005 when they inculcated to consumers the notion that home prices have never, and will never, fall on a national basis. We all know how that story turned out. Along with their belief that real estate prices couldn't fall, is one of their favorite conciliatory mantras that still exists today. Namely, that foreign investors have no choice but to perpetually support the U.S. debt market at any price and at any yield.
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Sunday, August 25, 2013
The Truth about the Real Size of the US National Debt / Interest-Rates / US Debt
By: Pravda
Everyone got used to the largest officially announced U.S. national debt of 16 trillion dollars. Moreover, despite the dire predictions, the global economy seems to be more or less stable, and recently liberal media have been happily reporting GDP growth in the United States and the European Union. However, it is not all that great.
Saturday, August 24, 2013
U.S. Treasury Bonds Are Oversold / Interest-Rates / US Interest Rates
By: Sy_Harding
Has there ever been an asset class bombarded by such intense negativity in such a short period of time? Fed Chairman Bernanke’s warning in May that the Fed would soon begin to ‘taper’ its QE bond-buying stimulus program brought ‘The End of Bonds’ headlines out in force. And bond investors responded.
Friday, August 23, 2013
Shorting U.S. Treasury Bonds, Your No1 Choice for Big Gains / Interest-Rates / US Bonds
By: Money_Morning
Keith Fitz-Gerald writes: As I'm writing this, halfway through Wednesday's session, stocks are in danger of closing in the red for a fifth straight day. And this is all you'll hear about today.
Yet bonds are telling you the real story.
In fact, at this point, they are the next best thing to the Holy Grail if you've got the right perspective and understand what's happening.
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Friday, August 23, 2013
Major Bond Market Top, Dangerous Myths About Rising Yields / Interest-Rates / US Bonds
By: EWI
Myth 1 of 3: Bond Yields Are Rising Due to the Fed's Insinuation at Tapering
Editor's note: The following article is the first in a series of three, reprinted with permission from market-leading financial forecasting firm Elliott Wave International. To read the full three-part report now, follow this link and download it for free
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Wednesday, August 21, 2013
Dangerous Myths About Rising U.S. Treasury Bond Yields / Interest-Rates / US Bonds
By: EWI
Myth 1 of 3: Bond Yields Are Rising Due to the Fed's Insinuation at Tapering
Editor's note: The following article is the first in a series of three, reprinted with permission from market-leading financial forecasting firm Elliott Wave International. To read the full three-part report now, follow this link and download it for free
Read full article... Read full article...
Wednesday, August 21, 2013
What Has QE Actually Accomplished? / Interest-Rates / Quantitative Easing
By: John_Mauldin
The market is obsessed with “tapering.” The assumption is that all the “juice” in the economy is somehow the product of the Federal Reserve's actions. The headline on the front page of the Wall Street Journal today reads “Fear of Fed Retreat Roils India.” I suppose one has to come up with some kind of reason to explain the convergence of emerging equity markets and those of the US. My friend Dan Greenhaus over at BTIG sent out this ugly graph (if you are an emerging-market investor) this morning: