Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, June 23, 2012
Germany Could Pull Out of the Euro Before Spain is Even “Saved” / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
As I’ve assessed in earlier pieces, neither the Fed, nor the IMF, nor the EFSF, nor the ECB has the firepower or the political backing to prop up Spain or the EU.
This ultimately leaves the ESM, the permanent European Stability Mechanism… which technically doesn’t even exist yet (it’s supposed to be ratified by July 2012).
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Friday, June 22, 2012
How America Screwed Europe And Why The Road To Recovery Lies in Securitization / Interest-Rates / Credit Crisis 2012
By: Andrew_Butter
The Dutch call it, “Doing-an-English”. That’s when someone takes a liberty real soft and sweet and so-so-polite you hardly even noticed…until you find out you’re pregnant, or worse.
Looks like the Europeans finally noticed. Jose Manuel Barroso’s news at the G-20 summit was… "This crisis was not originated in Europe".
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Friday, June 22, 2012
Spain's Banks Cook the Books as House Prices Crash Accelerates / Interest-Rates / Eurozone Debt Crisis
By: Raul_I_Meijer
The results of the "independent" Spanish bank stress test by Oliver Wyman Ltd, just out, indicate that the banks will need €62 billion ($78 billion) in a worst case scenario (a 6.5% GDP shrinkage and a 60% home price plunge). Since €100 billion was the number the EU said would go towards the bank bailout announced last week, what's the problem, right?
Well, there are plenty. In a nice aside, the Bank of Spain reported a few days a go that its own stress test won't be published until September, because too much bank staff will be on holiday this summer(!) to do it sooner. Not much of a sense of urgency there, more like going to the beach when your house is on fire. And that might not work out well.
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Thursday, June 21, 2012
European Debt Crisis "Imagine the Worst and then Double It" / Interest-Rates / Eurozone Debt Crisis
By: EWI
We've all heard the line: Let me give it to you straight.
And in speaking to his counterparts in Spain, an Irish economist did just that.
Read full article... Read full article...Ireland has this banking advice for Spain: imagine the worst and double it. [emphasis added]
Thursday, June 21, 2012
U.S. More Soft Quantitative Easing / Interest-Rates / Quantitative Easing
By: Ian_R_Campbell
Why Read: To get beyond newspaper reporting to a 'what it may mean discussion'.
Featured Article: Shortly after noon Eastern Time yesterday, multiple articles and other media coverage began of the U.S. Federal Reserve announcement that:
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Wednesday, June 20, 2012
Eurozone Debt Crisis is Far From Over / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Dr. Kent Moors writes:
The Greek election last weekend has brought us a brief reprieve. The nation and the Eurozone have stepped back from the brink.
But the larger truth is that little has changed.
Yes, the Eurozone has survived its latest test, yet there is little indication where it will go from here. Considerable continental support for the common currency remains, and EU officials will soon introduce initiatives to consolidate banking and financial policy in the European Union.
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Wednesday, June 20, 2012
Tinker Bell Is Dead, It's Why Bankonomics Won't Work in Europe or US / Interest-Rates / Global Debt Crisis 2012
By: Gary_North
If you have seen the stage version of Peter Pan, you know the scene in which the audience is asked to clap if they want Tinker Bell to live. It's time.
Janet Daley wrote a provocative essay in London's The Telegraph on the day before the Greek election (June 16). She did her best to explain why the eurozone is in crisis. Europe's leaders are living in an illusion of their own making.
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Tuesday, June 19, 2012
Spain and the Western Financial System on the Brink / Interest-Rates / Eurozone Debt Crisis
By: Mario_Innecco
This weekend the world kept a close eye on the Greek parliamentary elections and the big worry, from a EU establishment perspective, was that the a victory by the Coalition of the Radical Left or SYRIZA would result in market turmoil today. SYRIZA, under the leadership of Alexis Tsipras, did not win and the New Democracy party triumphed and as a result Greece is now expected to stay the course as far as the EU bailout plan is concerned. So this should have been great news for the markets right? Europe could now move ahead and sort its sovereign debt crisis out.
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Monday, June 18, 2012
The Eurozone Bailouts Question No Ones Asking / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
While everyone else is focusing on the Greek elections, the REAL issues pertaining to the EU (namely where the funding for Spain’s bailout as well as future bailouts will come from) continues to be ignored.
Indeed, no one seems to be asking THE key question regarding the EU: Just WHERE is the money for this bailout going to come from?
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Monday, June 18, 2012
PIMCO's Gross: Germany is a Credit Risk, Not an Attractive Market / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
Bill Gross of PIMCO spoke to Erik Schatzker and Stephanie Ruhle on Bloomberg TV's "Market Makers" today and said, "I would be leery of German bunds simply because there are only a few scenarios in which they can do well...Germany for me is a credit risk. It's not an attractive market."
Gross went on to say that Spanish bonds are "not a safe environment," and right now, the U.S. and U.K. are the "cleanest dirty shirts."
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Monday, June 18, 2012
1930s: Europe Back To The Future? / Interest-Rates / Eurozone Debt Crisis
By: DK_Matai
The fateful day of elections in Greece on 17th June has now arrived. The impact of this Greek ballot will be felt around the world. Beware the rise of political extremism. More than two thousand years ago, Plato -- the influential Greek philosopher -- said, “Dictatorship naturally arises out of democracy, and the most aggravated form of tyranny and slavery out of the most extreme liberty.” Europe's fast-escalating crisis is now more dangerous than Lehman's collapse in 2008, threatening to tip the world into a 1930s-style Second Great Depression unless global leaders work together to take dramatic action.
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Monday, June 18, 2012
Eurozone Debt Crisis Bang! Moment is Here / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
"Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence – especially in cases in which large short-term debts need to be rolled over continuously – is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang – confidence collapses, lenders disappear, and a crisis hits.
Monday, June 18, 2012
Euro-zone Insolvency Call to Arms for Central Banks / Interest-Rates / Eurozone Debt Crisis
By: Alasdair_Macleod
The rate at which the majority of the eurozone is descending into insolvency is accelerating. The rescue package for Spanish banks, which appears to have been provisionally set at a figure designed to impress the markets, hardly even produced a dead-cat bounce. All it has achieved is to draw attention yet again to the helplessness of the authorities in dealing with multiple debt-traps. So what is the answer?
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Sunday, June 17, 2012
U.S. Government Debt Goes From Frying Pan to Fire / Interest-Rates / US Debt
By: Andy_Sutton
This morning, the Treasury Department almost gleefully and proudly announced that foreign holdings of US Debt had hit a record high during the month of April and that bond heavyweight China had upped its holdings after trimming for two straight months. This dovetails nicely with a story that was published earlier this week about the federal reserve and its own holdings of US Debt, which have increased over 450% in the past three years. And no, that is not a typo. The federal reserve now holds over $1.6 Trillion in USGovt debt. Obviously the establishment is thrilled with these developments because it helps maintain the status quo of the dollar standard era. However, there are some serious ramifications that few are paying attention to and are getting almost zero coverage from traditional media outlets. From the AP this morning:
Friday, June 15, 2012
Bank of England Panic's, Funnels £140 Billion to Bankrupt Banks Ahead of Eurogeddon / Interest-Rates / Global Debt Crisis 2012
By: Nadeem_Walayat
Banking stocks soared today on news that the George Osbourne and Mervyn King policy for the Bank of England to give cheap money to the banks to enable them to provide credit to the wider economy. Off course the reason offered is just smoke and mirrors propaganda, the real reason why the Bank of England is yet again stuffing every orifice of the UK Banks with tax payer cash (where ultimate liability lies) is ahead of the high risk of Eurogeddon on Monday following outcome of Sundays Greek election.
Friday, June 15, 2012
Anti-Fragile Banking / Interest-Rates / Global Financial System
By: William_Bancroft
We’ve been big fans of the author and academic, Nasim Nicholas Taleb, for some time. We have enjoyed his best-selling book, ‘The Black Swan’, his media appearances and have used his work to find other interesting works by the likes of Benoit Mandelbrot.
A central theme in Taleb’s writing is that systems should be built not just to withstand 99% of scenarios, but all scenarios. A bit like saying we should build a house that stands for 365 days a year, not one that stands for 364 days only to be toppled by the perfect storm.
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Friday, June 15, 2012
U.S. Bond Market, The Greatest Hoax Ever Perpetrated on Mankind / Interest-Rates / US Bonds
By: Rob_Kirby
A few years ago, when J.P. Morgan grew their derivatives book by 12 Trillion in one quarter [Q3/07] – I did some back of the napkin math – and figured out how many 5 and 10 year bonds the Morgue would have necessarily had to transact on their swaps alone – if they are hedged. The bonds required to hedge the growth in Morgan’s Swap book were 1.4 billion more in one day than what was mathematically available to the entire domestic bond market for a whole quarter?
Thursday, June 14, 2012
How to Protect yourself from Spailout Euro Collapse / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Keith Fitz-Gerald writes:
It's unlikely the euro will survive what I'm calling the Spailout... meaning, the bailout of Spain, and the contagion to Italy, etc. Believe me, you're going to be seeing and hearing this non-stop in the media for quite some time. And fear will be running rampant as a result.
I'm going to explain everything about the Spanish situation in a moment - probably more than most people care to know - but first, let me share something with you that's worth your attention.
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Wednesday, June 13, 2012
Spain Bank Bailout isn’t Euro-zone Debt Crisis Solution / Interest-Rates / Eurozone Debt Crisis
By: Michael_Pento
It was announced this weekend that Spain will receive $125 billion (100 billion Euros) to recapitalize their banking system. The money for the bailout will be channeled through the Fund for Orderly Bank Restructuring (FROB), whose funds count towards public debt.Read full article... Read full article...
Wednesday, June 13, 2012
Why the Spain Bailout Package Won't Work / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Diane Alter writes:
The pricey Spain bailout package convinced markets it could fix the Eurozone debt crisis for only a moment Monday, before reality set in that the plan was far from ideal.
Following the announcement of a $126 billion (100 billion euro) bank rescue package, markets rose briefly. But the relief was short-lived as investors hastily refocused and remembered that the struggling Eurozone still faces a number of key obstacles.
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