Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, January 24, 2012
How to Work Out of the Long and Painful Debt Deleveraging Process / Interest-Rates / Global Debt Crisis 2012
By: John_Mauldin
This week we look at a report called “Working Out of Debt,” about debt and deleveraging, from the McKinsey Global Institute. This is a well-done summary of their longer paper, which has been updated, called “Debt and deleveraging: Uneven progress on the path to growth.” I discussed the original paper both in my regular letter and in Endgame. It is one of the best, most definitive pieces on the topic I have read. For those trying to understand how the deleveraging process will affect their particular world, I think it is a must-read. I have been spending more and more time thinking about the whole process of deleveraging, and am coming to think deleveraging is the critical and fundamental factor shaping the economic environment and impacting every decision countries and businesses are faced with. This paper was done by Karen Croxson, Susan Lund, and Charles Roxburgh; and they are to be especially commended for their insight and work.
Friday, January 20, 2012
UK Gold and Real Interest Rates, A Free Nation Drowining in Debt / Interest-Rates / UK Debt
By: Adrian_Ash
Take record-high debt, add record-low interest rates, and what do you get in gold...?
SECOND ONLY to Japan, the UK now wears the greatest debt burden of any major economy today – in total, more than 5 years' entire economic output.
Friday, January 20, 2012
Roubini Says Greece Will be a Credit Event, Regardless of Debt Deal / Interest-Rates / Global Debt Crisis 2012
By: Bloomberg
Bloomberg Exclusive: Nouriel Roubini and Ian Bremmer spoke with Bloomberg Television's Margaret Brennan about the state of the global economy.
Roubini said that the "probability of a recession in the United States is lower than 60 percent right now." On Europe, he said that even if an agreement is reached on Greece, "there are going to be so many holdouts that then they'll have a problem" and "either way you're going to get a credit event."
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Friday, January 20, 2012
Marc Faber: Still Predicting U.S. Treasury Bond Bubble Will Burst / Interest-Rates / US Bonds
By: Bloomberg
Marc Faber, publisher of the Gloom, Boom and Doom report, spoke to Bloomberg Television's Sara Eisen and Erik Schatzker and said that investors have created a "bubble" in the "highest-quality" government bonds and should move to equities.
Faber said, "People feel so insecure that they say, 'I'd rather be in a Treasury in America with almost no yield or in Germany with negative yield and get my money back.' But it doesn't make them a good buy in the long term."
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Friday, January 20, 2012
Eurozone Debt Crisis, The Reality of the European Downgrades / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Jack Barnes writes:
It turned out to be a ruinous Friday the 13th for Europe last week.
After the close, Standard & Poor's downgraded nine of the sovereign states in the European Union (EU).
That included dropping Austria and France to AA+ status from their formerly lofty AAA rating.
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Monday, January 16, 2012
Central Banks Transferring Risk From Private Sector onto Taxpayers / Interest-Rates / Credit Crisis 2012
By: Chris_Ciovacco
With last Friday’s downgrades of European debt, the pressure from leaders, such as French President Nicholas Sarkozy, on central banks to print more money will increase. The concept of free markets is coming into question as government intervention is increasing at an alarming rate.
Monday, January 16, 2012
Marc Faber - U.S. Treasury Bonds Should be Rated at Junk / Interest-Rates / US Bonds
By: Videos
Marc Faber - US bonds should be rated junk status on CNBC during the Euro-zone credit ratings downgrades announcements.
Sunday, January 15, 2012
To Solve Europe's Debt Crisis You Must Solve Three Problems, Else its the End of Europe / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
One of the interesting things about being in Hong Kong is that I get to see the weekend edition of the Financial Times 12 hours early. And the headlines were not all that pleasant. As I promised last week, we will cast our eyes to Europe and ponder what is in store for Europe for the year and the next five years. And what do we read on page 2? The "ECB raps revisions to draft a fiscal pact." Seems they feel there are too many loopholes, which will make the document meaningless … somewhat like the treaty they have now. And we further learn that "Greek default threat grows as talks falter." Seems there is a lack of agreement on how much of a haircut the investors ought to take, and the Greeks don't want to guarantee any future debt, just in case they need to default some more in the future. But they do want the €15 billion they need to keep the debt machine running for a few more months.
Saturday, January 14, 2012
Credit Ratings Downgraded France Regrets Abusing Britain as it May Beg for UK Bailout Cash / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
Nine Euro-zone countries have been downgraded by U.S. credit ratings agency S&P, most of whom to junk status with the biggest hit to the Eurozone being the downgrade of France from AAA to AA which has resulted in a political storm in France as President Sarkozy's hopes of being re-elected in April 2012 have now gone up in smoke.
Saturday, January 14, 2012
The U.S. Government Is Bankrupt / Interest-Rates / US Debt
By: Casey_Research
Doug Casey, Casey Research writes: Everyone knows that the US government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. At least insofar as it's possible to get a clear picture.
As you know, the so-called Super Committee recently tried to come up with a plan to cut the deficit by $1.5 trillion and failed completely. To anyone who understands the nature of the political process, the failure was, of course, as predictable as it was shameful. What's even more shameful, though, is that the sought-after $1.5 trillion cut wasn't meant to apply to the annual budget but to the total budget of the next 10 years – a fact that is rarely mentioned.
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Friday, January 13, 2012
ECB's Draghi Frames Debt Crisis Issues / Interest-Rates / Eurozone Debt Crisis
By: Axel_Merk
ECB President Mario Draghi continued to impress with his very direct style during the European Central Bank's (ECB) first press conference of the year. While not lowering interest rates or announcing further easing measures, he made it clear that the ECB is "ready to act" should the environment deteriorate. Our takeaways:
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Friday, January 13, 2012
2012 Markets Will be a Repeat of 2011, Favor Italian Government Bonds Over Nation's Bank Debt / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
Boaz Weinstein, founder of Saba Capital and former co-head of credit trading at Deutsche Bank, spoke exclusively to Bloomberg TV's Stephanie Ruhle about the CDS market and outlook for 2012.
Weinstein said that "we do have a long position in Italy" and the markets this year will "be a repeat of 2011."
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Wednesday, January 11, 2012
End of the Debt Super Cycle, 2012 Market Forecasts / Interest-Rates / Global Debt Crisis 2012
By: The_Gold_Report
What do investors need to be watching out for in 2012? More Eurozone drama? Record gold highs? A hard landing in China? The U.S. Global Investors team addressed these questions with Endgame: The End of the Debt Supercycle author John Mauldin in a Jan. 5 Outlook 2012 webinar. The Streetwise Reports editors highlight some of the expert insights.
Monday, January 09, 2012
Unpredictability Impact on Global Economy, Fed QE3 Won't Produce the Outcomes We Want / Interest-Rates / Quantitative Easing
By: Bloomberg
PIMCO CEO and co-CIO Mohamed El-Erian spoke with Bloomberg Television's Betty Liu, Dominic Chu and Michael McKee about Europe's crisis, the U.S. economy and where to invest safely in this environment.
El-Erian said that the Fed "doesn't have enough policy instruments to deal with the challenges facing the economy" and that QE3 will not work. On investing opportunities, he said that "In the short term, the U.S. dollar is the best place."
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Monday, January 09, 2012
Paul Krugman is Dead Wrong: Debt Matters / Interest-Rates / US Debt
By: Money_Morning
Shah Gilani writes:
Paul Krugman, the Princeton University economics professor, Nobel Prize winner, and regular New York Times op-ed contributor says, "Debt matters, but not that much."
Not only is he off the reservation on this one, but he's completely fallen off his high horse.
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Sunday, January 08, 2012
Global Interest Rate Movements in 2011 / Interest-Rates / Central Banks
By: CentralBankNews
Of the central banks that net increased their interest rates, the average increase was 281 basis points (skewed up by Belarus; the average would be 185 excluding Belarus). There were 18 central banks tightening by 100 or more basis points. The outliers were Belarus 3450bps, Kenya 1200bps, and Uganda 1000bps. Of those tightening rates, it was largely emerging and frontier markets, with inflation pressures running high on the back of rising food commodity prices and relatively buoyant economic conditions, particularly in the early part of the year.
Saturday, January 07, 2012
Foreign Central Banks Dumping U.S. Treasury Bonds, Treasure From Treasuries / Interest-Rates / US Bonds
By: DeepCaster_LLC
“Holdings of U.S. Treasurys (sic) by foreign central banks has fallen by a record amount over the past four weeks according to the latest Federal Reserve data.
“The net $69 billion drop in Treasury holdings registered at the Fed by foreign official institutions comes as benchmark yields ended 2011 near record low levels…
“The decline in foreign holdings of Treasurys (sic) in recent weeks has not resulted in higher yields and lower prices because other investors have sought the safety of US debt.”
“Foreign Central Banks Cut Treasury Holdings by Record”
The Financial Times, www.cnbc.com, 12/30/11
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Friday, January 06, 2012
Debt, It's a Rollover... or is it? / Interest-Rates / US Debt
By: William_Bancroft
Will Bancroft looks at the debt loads weighing down economies and sees a year of tightrope walking for the authorities and the banking system. The financial markets wait with baited breathe for a resolution to the debt problems, but are there any fixes available?
As we enter 2012 there is one issue that probably sits at the forefront of our minds: can the overly indebted parts of the financial system keep financing themselves?
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Tuesday, January 03, 2012
Math Vindicates S&P U.S. Debt Downgrade / Interest-Rates / US Debt
By: Michael_Pento
Standard and Poor’s has been greatly vilified for their call to lower the U.S. credit rating to AA+ from AAA. The evidence, naysayers point to, for their justification of excoriating S&P is the performance of Treasuries since the downgrade occurred. Indeed, U.S. debt yields have fallen and the dollar has increased in the five months after being stripped of AAA.Read full article... Read full article...
Tuesday, January 03, 2012
Global Government Bond Market Ponzi Scheme / Interest-Rates / Global Debt Crisis 2012
By: John_Mauldin
For whatever deeply embedded psychological reason – and your humble analyst is profoundly guilty – we humans seem prone to picking out a particular point in our space-time continuum (read: the New Year) to think about the future and new beginnings, rather than running the exercise every week or month. Maybe so much introspection and thinking is just too exhausting, so we only do it on an annual basis. I am deep in my reading as I research my annual forecast issue, which I will write Friday. I am thinking of being especially foolish (and anyone who makes predictions is foolish) and going out to a five-year time frame. It should be challenging.