Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, August 13, 2013
How to Play the Coming Bond Market Crash / Interest-Rates / International Bond Market
By: Investment_U
Alexander Green writes: You know it’s coming. Every experienced investor who is paying attention knows it’s coming. I’m talking about the upending of bonds that will take place in the months and years ahead. However, there is a smart, low-risk way to play it… and earn a decent return.
Let’s start with the basics. Picture a seesaw with interest rates on one side and bond prices on the other. When interest rates go down, investment-grade corporates and Treasuries go up. When interest rates go up, these same bonds go down.
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Wednesday, August 07, 2013
Bank of England 0.5% Interest Rates for 7% Unemployment, to Result in 7% Inflation, Ongoing Savings Theft / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
"We won't even begin to think about raising interest rates until we see the unemployment rate go to 7%" - Mark Carney. With that the new Governor of the Bank of England did away with over 4 years of Mervyn Kings smoke and mirrors propaganda of temporary emergency low interests of just 0.5%, and money printing of £500 billion, the consequence of which is theft of purchasing power from savings and worker wages by means of high real inflation, transferring this stolen wealth to the bankrupt banking crime syndicate, and the government so that it can continue to maintain vested interest voting blocks, by bribing the electorate with debt and printed money that is not backed by any economic activity.
Wednesday, August 07, 2013
The Federal Reserve Relies on a Flawed Economic Model / Interest-Rates / Quantitative Easing
By: Casey_Research
By Lacy H. Hunt, Ph.D., Economist
In May 22 testimony to the Joint Economic Committee of Congress, Fed Chairman Ben Bernanke issued another of many similar positive interpretations of central bank policy. Yet again, he continued to argue that quantitative easing has decreased long-term interest rates and produced other benefits. He called economic growth "moderate," a term that he has often used without acknowledging that the Fed's forecasts have repeatedly been far above the mark. Within less than two months—or by the time of the July FOMC meeting—the Fed had downgraded the economic growth to "modest," tacitly acknowledging that program of open-ended $85 billion purchases of government and federal agency security purchases had failed to boost economic activity.
Wednesday, August 07, 2013
Debt, Income and Economy - Trying To Stay Sane In An Insane World / Interest-Rates / Global Debt Crisis 2013
By: James_Quinn
“I mean—hell, I been surprised how sane you guys all are. As near as I can tell you’re not any crazier than the average asshole on the street.” – R.P. McMurphy – One Flew Over the Cuckoo’s Nest
"Years ago, it meant something to be crazy. Now everyone's crazy." - Charles Manson
"In America, the criminally insane rule and the rest of us, or the vast majority of the rest of us, either do not care, do not know, or are distracted and properly brainwashed into acquiescence." - Kurt Nimmo
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Sunday, August 04, 2013
If You're Worried About Rising Interest Rates, Look at This Chart / Interest-Rates / US Interest Rates
By: DailyWealth
David Eifrig writes: "Don't fight the Fed."
You can hear that phrase on bond-trading desks throughout Wall Street. It's a warning to investors and traders. Don't try to outthink the central bank or anticipate its next moves...
Friday, August 02, 2013
Fed Says “No Way” to QE Tapering / Interest-Rates / Quantitative Easing
By: InvestmentContrarian
George Leong writes: At the Federal Reserve meeting this past Wednesday, Chairman Ben Bernanke confirmed the bond buying would continue as economic growth was only modest and jobs remain an issue.
In other words, the Federal Reserve is planning to keep the money-printing press in full operation.
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Friday, August 02, 2013
Detroit Bankruptcy Could Shake Muni Bonds to the Core / Interest-Rates / US Bonds
By: Money_Morning
Shah Gilani writes: Detroit went bankrupt, but so what?
Its own decades-long gross political mismanagement, corruption and incompetence pushed the city over the cliff into bankruptcy.
Why should we care?
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Thursday, August 01, 2013
FOMC Meeting See's Fed Backtrack on QE Taper Talk / Interest-Rates / Quantitative Easing
By: Money_Morning
Gary Gately writes: The Federal Open Market Committee (FOMC) meeting ended today (Wednesday) with word that the Fed plans to the stay the course on QE for now, backtracking from earlier hints it might begin tapering this fall.
"For all those looking for clear guidance on when quantitative easing will end, well, you will have to wait a little longer," Joel Naroff, president and chief economist at Naroff Economic Advisors Inc., wrote in a research note. "Indeed, there may have been some walking backwards today."
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Thursday, August 01, 2013
Bernanke’s Gift - Tempering the Taper Tantrum / Interest-Rates / Quantitative Easing
By: Michael_J_Kosares
WASHINGTON (MarketWatch) — The Federal Reserve on Wednesday slightly downgraded its economic outlook but gave no hint about its plans for its $85 billion-a-month asset purchase program. The statement released after a meeting of the Fed’s policy making committee said that the economy was expanding at a “modest” pace, a change from the “moderate” pace seen in June. The Fed also noted that the rise in mortgage rates was a concern. It also said that persistently low inflation was a risk. There was only one dissent, by Kansas City Fed President Esther George.
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Wednesday, July 31, 2013
Bernanke the Candyman as Detroit Declares Bankruptcy / Interest-Rates / Quantitative Easing
By: John_Mauldin
By Grant Williams
Who can take tomorrow
Dip it in a dream
Separate the sorrow
And collect up all the cream?
The candyman, the candyman can
The candyman can 'cause he mixes it with love
And makes the world taste good.
And the world tastes good 'cause the candyman thinks it should.
– "The Candyman", Willy Wonka and the Chocolate Factory
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Tuesday, July 30, 2013
What to Expect From the Fed FOMC Meeting: Looking for QE Clues / Interest-Rates / Quantitative Easing
By: Money_Morning
Gary Gately writes: Don't expect a definitive answer from this week's Federal Open Market Committee (FOMC) meeting on when the Fed will begin tapering its massive quantitative easing program.
Instead, the focus will be on the FOMC's statement, which will be scoured for clues about when scaling back QE3 could begin.
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Saturday, July 27, 2013
Despite Declining Deficit, Foreigners Aren’t Bailing Us Out, So the Fed Will Keep QE Going / Interest-Rates / Quantitative Easing
By: Casey_Research
By Bud Conrad, Chief Economist
The basic imbalance driving our economy is the government deficit, which spun out of control as a result of the Credit Crisis of 2008/9. But the sequester, improving tax base, lower interest rate, and elimination of stimulus spending have caused the big government deficit, while still extreme, to drop to half its previously nosebleed levels.
Wednesday, July 24, 2013
Eight More U.S. Cities on the Verge of Bankruptcy / Interest-Rates / US Debt
By: Money_Morning
Detroit is the largest municipal default in the history of the US. The city owes $9.2 billion in pensions, $1.9 billion to creditors and is $18.5 billion in debt.
The city's infrastructure is collapsing. Almost half of its streetlights are not working and aren't being repaired.
The average time for Detroit police to respond to an emergency is just under an hour. Crime has spiked. Many in the city have resorted to carrying firearms for their personal protection.
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Wednesday, July 24, 2013
After 32 Years Bond Bull Market is Officially Dead / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes: I'm announcing that the 32-year bull market in bonds is officially dead. Be prepared for the consequences from rising interest rates in 2014. They could be catastrophic for bond market investors.
Higher bond rates look enticing, like they'll provide you with more income. But as interest rates move up, the value of bonds goes down. It's an inverse relationship. The value of your fixed-income portfolio could be devastated if rates rise rapidly beginning next year. Start protecting your portfolio today.
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Tuesday, July 23, 2013
What the Detroit Bankruptcy Means for Municipal Bonds / Interest-Rates / US Bonds
By: Money_Morning
David Zeiler writes: You can't blame investors in municipal bonds for being worried about how the Detroit bankruptcy will affect the muni market - it's by a factor of four the largest municipal bankruptcy in U.S. history.
Last Thursday Detroit filed for Chapter 9 bankruptcy to seek relief for $18 billion in debt obligations, a debt driven primarily by years of soaring public pension obligations and shrinking tax revenue.
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Monday, July 22, 2013
The End of QE - What Ben Bernanke Is Really Saying / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
Ever wonder what Bernanke is saying? Well, it boils down to this: at the same time that Jimmy Carter says the US doesn't have a functioning democracy, Ben Bernanke says the US doesn't have a functioning economy.
Unfortunately, people understand what Carter says, though they may not agree with him, but they do not understand what Bernanke says, and that has nothing to do with agreeing with him or not. Moe likely it has something to do with the illusionary oracle qualities once attributed to his predecessor Alan Greenspan, whenever no-one had a clue what he was saying. In reality, Ben Bernanke will turn out to be the biggest scourge on American society since the same Alan Greenspan, but that's not how he's seen; instead, just like Greenspan, he's idolized. What's wrong with this picture is that Bernanke's words and actions are interpreted in the press exclusively by people who live in the part of society that stands to profit from them, let's call it "the financial world". That they are but a very small part of society easily gets lost in translation.
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Monday, July 22, 2013
Dangerous Excess - QE Fiscal Easing Past And Present / Interest-Rates / Quantitative Easing
By: Andrew_McKillop
THE ASSIGNAT BUBBLE AND QE
One of our problems is easy to state but very dramatic. There are no real precedents for what is called Quantitative Easing as it is practiced since 2008. Central bankers such as Bernanke, Draghi, Carney and their partners in almost all other countries are engaged in The Great Experiment.
Unfortunately, based on all past history, the chance of it not ending badly or very badly, is minimal.
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Thursday, July 18, 2013
Bernanke Testimony Sends Mixed Signals on QE3 / Interest-Rates / Quantitative Easing
By: Money_Morning
Gary Gately writes: Call it Ben Bernanke's Alan Greenspan moment.
As his predecessor as Federal Reserve chairman had often done, Bernanke sent decidedly mixed and unclear signals today (Wednesday) in testimony before Congress.
The Bernanke testimony, in prepared remarks delivered to the House Financial Services Committee, provided nothing close to a definitive answer on whether the Fed would scale back quantitative easing in September.
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Thursday, July 18, 2013
How to Succeed in the Low-Yield Inflationary Bond Market Matrix / Interest-Rates / US Bonds
By: Money_Morning
Robert Hsu writes: In the 1999 sci-fi film, "The Matrix," the mentor Morpheus turns to the protagonist Neo and says, "Do you think that's air you're breathing now?"
The quote has become somewhat of a modern classic movie line, as the words serve to enlighten Neo that all is not what it seems in the world he perceives.
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Wednesday, July 17, 2013
U.S. Treasury Bond Market Mirror Cracks / Interest-Rates / US Bonds
By: John_Mauldin
Michael Lewitt is one of my favorite credit analysts. If I want to know what is happening in the credit markets, one of my first calls is to Michael. He has been doing deep dives into some rather esoteric markets as well as traditional bonds over the course of his career, and he really understands what is happening under the surface.
In the latest issue of The Credit Strategist, which Michael has given me special permission to pass on to you as today's Outside the Box, he gets our attention right off the bat by comparing the recent big move in the benchmark 10-year Treasury yield to a comparable two-month move in 1994, a year that, as he says, was "generally viewed as Armageddon for bond investors." But in percentage terms, the 1994 move was only 20% over that period while the recent move was 40%.
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