Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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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Wednesday, July 17, 2013
Municipal Bonds: While Others Bail, It Might Be a Good Time to Buy / Interest-Rates / US Bonds
By: Money_Morning
Gary Gately writes: Investors have been bailing out of beleaguered municipal bonds in droves, worried that higher interest rates will drive down the prices of the bonds.
About two weeks ago, weekly net outflows from muni bond mutual funds and ETFs soared to a record $4.53 billion, Lipper data shows.
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Monday, July 15, 2013
Wading Through the Bond Market Bloodbath / Interest-Rates / US Bonds
By: Money_Morning
Robert Hsu writes: If you're an investor who has been following a traditional income-style portfolio allocation that includes a lot of U.S. Treasury bonds, then you are likely having a very uncomfortable summer.
Indeed, since the Federal Reserve's "taper" narrative was first introduced to Wall Street by Chairman Ben Bernanke on May 22, there's been a virtual bloodbath in the bond market.
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Friday, July 12, 2013
How to Play the U.S. Treasury Bond Market Rout / Interest-Rates / US Bonds
By: Investment_U
Alexander Green writes: This week Goldman Sachs forecast that 10-year Treasury yields would reach 3% by the end of this year and 4% by 2016. Of course, Goldman doesn’t have a crystal ball, and neither do we.
But the bloom is clearly off the rose. Ben Bernanke’s announcement last month that the Fed intends to end its $85 billion a month bond-buying program by the middle of next year has turned the $11.9 trillion U.S. Treasury bond market upside down. The 10-year yield has soared from 1.76% at the end of 2012 to a recent high of 2.75%.
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Wednesday, July 10, 2013
How High Will U.S. Interest Rates Go? / Interest-Rates / US Interest Rates
By: Michael_Pento
To best answer the question as to where U.S. Treasury yields are headed in the next quarter or two, it is important to know where they would be without the manipulation of our central bank, where they would be in a growing economy and, also, absent the threat from an imminent collapse of a major foreign currency. The current yield on the Ten-Year Note is 2.6%, up from 1.6% less than two months ago. True, that rate has surged of late but it is still far below its 40-year average of around 7%. But just prior to the beginning of the Great Recession (in fall of 2007) the yield on the Ten-Year Note was 4%--140 basis points higher than today.
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Tuesday, July 09, 2013
Meredith Whitney on Muni Bonds and Red State-Blue State Migration / Interest-Rates / US Bonds
By: Money_Morning
Frank Marchant writes: In 2010 Meredith Whitney made an earth shattering statement during a CBS's "60 Minutes" interview that rocked the municipal bond investment world.
"There is not a doubt in my mind that you will see a spate of municipal-bond defaults,"said Meredith Whitney on Dec 19. She continued, "You could see 50 sizable defaults, and 50 to 100 sizeable defaults, more. This will amount to hundreds of billions of dollars' worth of defaults."
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Sunday, July 07, 2013
Mortgage Backed Securities Clobbered and U.S. Treasury Yields Soar Following Job Numbers / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Curve Watchers Anonymous notes that treasury yields surged higher and mortgage backed securities (MBS) had a steep selloff following purportedly good job numbers.
Beneath the surface, the economy actually shed 326,000 full-time jobs.
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Friday, July 05, 2013
When the Fed Might Start Tapering QE / Interest-Rates / Quantitative Easing
By: Money_Morning
Frank Marchant writes: Although you might think the markets simply respond any time Ben Bernanke sneezes, his "cold cycle" is not one of the indicators that will spell the slowing and eventual cessation of the printing press at the Fed.
There actually is a mathematical formula used by the Federal Reserve to determine when to stop the presses.
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Thursday, July 04, 2013
How to Make Money in Bull or Bear Bond Markets / Interest-Rates / International Bond Market
By: Investment_U
Steve McDonald writes: Though painful, the recent sell-off in bonds has had three positive effects on the bond market:
First, it reinforced the fact that the bond market’s movements are mechanical and predictable.
Second, it drove up rates on all bonds to more reasonable levels.
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Wednesday, July 03, 2013
How to Take Advantage of the U.S. Bond Market Panic / Interest-Rates / US Bonds
By: Profit_Confidential
Michael Lombardi writes: Investors beware: the bond market is treading in very rough waters. The sell-off we have seen of U.S. bonds might just lead to more troubles ahead for the bond market. Just take a look at the chart below:
Monday, July 01, 2013
U.S. 30 Year Treasury Bonds – A Rally To Sell? / Interest-Rates / US Bonds
By: Michael_Noonan
Trading opportunities arise every day, however, quality trades that offer an edge do not.
We use developing market activity, as depicted in charts, to find trade potentials with a
defined limited risk and greater reward potential. 30 Year Bonds appear to be advertising
weakness and a shorting opportunity.
When seeking trades, we use the “If, Then,” approach. IF the market does this, THEN we do that. The latter is acted upon only if the former requirements are met. Following this scenario, there is no guesswork or predicting involved, and the emotional element is not in play, either. Discipline is required, but it leads to more profitable trading potentials, so it is worth the effort.
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Saturday, June 29, 2013
The Critical Trend Towards Higher Interest Rates Has Begun / Interest-Rates / International Bond Market
By: DeepCaster_LLC
“’The Fed can continue to spew out QE until the bond market says it can’t.’ - Richard Russell. PS: The bond market has said that ‘it can’t.’”
Richard Russell, dowtheoryletters, 06/21/2013
“The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses…This little coterie…runs our government for their own selfish ends. It operates under cover of a self-created screen…seizes…our executive officers… legislative bodies…schools…courts…newspapers and every agency created for the public protection.”
John F. Hylan, Mayor of New York, 1918-1925
via lemetrepolecafe.com
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Thursday, June 27, 2013
BIS Warning of Bond Market Crisis on the Way! / Interest-Rates / International Bond Market
By: Julian_DW_Phillips
From 2007 the crises have grown - Central Banks can't fix it alone!
Whether it is Bill Gross of Pimco, Marc Faber, ourselves or so very many competent analysts in the financial world, to a man, are warning of the destructive power of rising interest rates. Now in addition to all of us, we have the central banker of central bankers, the Bank of International Settlements, giving a serious warning to developed world governments that it is perhaps too late to rely on growth to rescue the global economy from deflation.
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Tuesday, June 25, 2013
Bernanke Plays Call my Bluff With Markets / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
(Wikipedia): Call My Bluff was a long-running British game show between two teams of three celebrity contestants. The point of the game is for the teams to take it in turn to provide three definitions of an obscure word, only one of which is correct. The other team then has to guess which is the correct definition, the other two being "bluffs".
Grant Williams writes: Among the first things we learn in school are the rules of grammar — the building blocks of proper communication which underpin the English language.
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Monday, June 24, 2013
How Recent Surge in Yields Compares with the Past / Interest-Rates / US Interest Rates
By: PhilStockWorld
Courtesy of Doug Short : The bond market selloff after the FOMC meeting and Chairman Bernanke’s surprising specifics about exiting QE was quite stunning. However, his hawkish position was supported by today’s release by the Bank for International Settlements (BIS) of its annual report. The abstract for opening section, headed Making the most of borrowed time, begins with the following assertion:
Read full article... Read full article...Originally forged to describe central banks’ actions to prevent financial collapse, “whatever it takes” has become a rallying cry for them to continue their extraordinary policies. But we are past the height of the crisis, and the goal of policy today is to return to strong and sustainable growth.
Monday, June 24, 2013
U.S. Treasury Bond Market Panic Profitable Plays for Investors / Interest-Rates / US Interest Rates
By: DailyGainsLetter
Moe Zulfiqar writes: It’s no secret: the Federal Reserve has kept U.S. bond prices higher and yields historically low by keeping interest rates low with multiple rounds of quantitative easing.
But now things have taken a minor turn, after the Federal Open Market Committee (FOMC) meeting minutes were released on June 19. “The committee currently anticipates that it will be appropriate to moderate the monthly pace of purchases later this year,” said Fed chairman Ben Bernanke. “And if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.” (Source: “Bernanke says Fed likely to reduce bond buying this year,” Reuters, June 19, 2013.)