Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, December 16, 2011
European Banks are 'Insolvent' Amid Euro-zone Debt Crisis / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
Michael Platt, founder of the $30 billion hedge fund BlueCrest Capital, spoke to Bloomberg Television's Erik Schatzker and Stephanie Ruhle in his first-ever live TV interview.
Platt said that most of the banks in Europe are insolvent and the situation in the region is "completely unstable." On investing in illiquid assets, Platt said he "would not touch them with a barge pole" and that "the major opportunities will come post-blowout."
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Monday, December 12, 2011
Latest Eurozone Debt Crisis Plan "Another Grand Illusion" / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
David Zeiler writes:
As European leaders celebrated a tentative agreement to accept tougher budgetary rules among its members, critics expressed doubts the plan would cure the two-year-old Eurozone debt crisis.
Last week's highly anticipated two-day summit resulted in 26 of the 27 European Union (EU) nations - the United Kingdom objected - agreeing to create a new treaty that would require members to keep budget deficits to within 0.5% of gross domestic product (GDP) in good economic times and within 3% of GDP in bad times.
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Monday, December 12, 2011
Another Euro Zone Crisis, Another Backdoor Taxpayer Bailout? / Interest-Rates / Eurozone Debt Crisis
By: EconMatters
Exactly 20 years to the day after the creation of the European Union (EU) and the Euro currency, German Chancellor Angela Merkel successfully secured an historic agreement from all 27 current members of the EU, except Britain, forging a deeper economic integration in the euro zone on Friday, 9 Dec.Read full article... Read full article...
Sunday, December 11, 2011
The U.S Debt Crisis, A Look Beyond the Paradigms / Interest-Rates / US Debt
By: Andy_Sutton
Co-Authored by Gregory Olson, CEO – GRO Enterprises : One of the traps all analysts fall into from time to time is their inability to see the forest through the trees. We are all guilty of this from time to time, and those who would deny this simple reality only set themselves up to miss important changes in the paradigms in which they operate. Perhaps the most famous example of this happened in the life and times of Christopher Columbus. We’re sure you recall the mental model of that time; that the Earth was flat. Many very wise people in Columbus’ day felt he was going to sail the Nina, the Pinta, and the Santa Maria right off the edge of the Earth. And there are many other classic examples as well.
Friday, December 09, 2011
Stop Hyperventilating about Federal Debt: USA Is Heading for Party-Time Again / Interest-Rates / US Debt
By: Andrew_Butter
An interesting component of the current atmosphere of angst in America is collective amnesia. Everyone seems to forget:
1: There was a very expensive war. Whether the war was in fact “necessary” so as to Keep America Safe, is debatable. But putting that to one side, it most certainly did not generate a return on investment in the form of looting and pillaging…which always used to be the main justification for going to war in the old days, and that in the cold light of debt servitude, arguably remains the only fiscally-responsible reason for going to war…ever…so long as you win!
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Friday, December 09, 2011
The European Central Bank Provides Temporary Support to Banks / Interest-Rates / Credit Crisis 2011
By: Asha_Bangalore
The European Central Bank (ECB) provides temporary support to the economic bloc with its actions today. The ECB lowered the policy rate 25bps to 1.00%, expanded the range of eligible collateral for loans extended to banks, increased the maturity of loans to 3 years from the current maturity of 13 months to alleviate funding problems, and lowered reserve requirements to 1.0% from 2.0%. These steps are necessary measures to ease pressures in the banking sector and prevent a severe credit crunch.
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Thursday, December 08, 2011
U.S. Twin Deficits, Phony Money for Worthless Promises / Interest-Rates / US Debt
By: Gary_North
There are two deficits that we hear about most: the federal government's deficit and the balance of payments of the United States. They are linked, but they are very different in their effects.
The federal deficit is seen by Keynesians as mostly a benefit and by Austrians as mostly a liability, and for the same reason: higher government spending.
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Wednesday, December 07, 2011
The Risk of Sovereign Debt / Interest-Rates / Eurozone Debt Crisis
By: David_Howden
With a 50 percent haircut recently given on the Greek sovereign-debt question, investors are increasingly asking what the real risk of sovereign debt is. It would appear that investors underpriced the risk inherent in sovereign debt, especially that of Europe's periphery. One might even go so far as to say that investors made foolish choices in the past and are now getting their just deserts.
Tuesday, December 06, 2011
Quantitative Easing by the European Central Bank - A Matter of Time? / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
German Chancellor Merkel and French President Sarkozy announced a “comprehensive” agreement today pertaining to new rules to enforce fiscal discipline among members of the eurozone. Essentially, elements of the Maastricht economic criteria (3.0% budget deficit and 60% debt-to-GDP ratio) that had to be met in order to belong to the Euro Club are being enforced once again under new guidelines. An active audit committee to monitor national budgets to prevent profligacy is not part of the agreement, instead member states will be responsible and each will have to enshrine debt limits in their constitution. The European Court of Justice will have the authority to rule if members are not compliant and sanctions will be put in place by a vote of the European Council if members do not meet the fiscal thresholds. Giving new life to old rules, is that a big step?
Saturday, December 03, 2011
European Central Bank Loans Are Just 'Chump Change' / Interest-Rates / Credit Crisis 2011
By: Bloomberg
Stephen Roach, non-executive Chairman of Morgan Stanley Asia, spoke with Bloomberg Television's Betty Liu about Europe's crisis, the banking system in China and the U.S. economy.
On the European proposal to channel central bank loans through the IMF, Roach said that "this is not a bazooka" and "200 billion is chump change."
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Saturday, December 03, 2011
It’s Time To Dump U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Sy_Harding
First let’s make sure we understand the basics of bonds.
Bonds are a form of debt. When a company or a government needs to borrow money it can borrow from banks and pay interest on the loan, or it can borrow from investors by issuing bonds and paying interest on the bonds.
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Friday, December 02, 2011
Central Banks’ Latest Move Shows Desperation / Interest-Rates / Credit Crisis 2011
By: Washingtons_Blog
The coordinated swap line bailout by the Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank- and China’s reduction of reserve requirements by .5% – shows desperation. (For background on swap lines.)
Thursday, December 01, 2011
Coordinated Central Bank Action Temporary Fix, Not Panacea for Europe’s Sovereign Debt Woes / Interest-Rates / Global Debt Crisis
By: Asha_Bangalore
The Federal Reserve, Bank of Canada, Bank of England, the Bank of Japan, the European Central Bank, and Swiss National Bank announced coordinated actions to provide liquidity support to the global financial system. Today’s announcement involves a reduction in cost at which banks in foreign countries can borrow dollars from their central banks. The central banks lowered the price on the existing temporary U.S. dollar liquidity swap line by 50 basis points such that the new rate will be U.S. dollar over night indexed swap (OIS) rate plus 50 bps instead of U.S. dollar OIS rate plus 100 bps. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice. This arrangement will be effective as of December 5, 2011 and will remain in place until February 1, 2013.
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Wednesday, November 30, 2011
Central Banks Tackling Liquidity, Policy, Geopol and Solvency / Interest-Rates / Central Banks
By: Ashraf_Laidi
Today's coordinated central bank liquidity injections coincide with liquidity concerns (USD LIBOR nearing the highs of June 2010 at 0.53%); policy concerns (EFSF & austerity deadlock), geopolitical concerns (storming of UK Embassy in Tehran) and solvency concerns as signaled by implicit (voluntary) default from Greece.
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Wednesday, November 30, 2011
Perpetual Q.E. Without The Billboard, Hyper Monetary Inflation / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
The US Federal Reserve has fooled a lot of people into believing that the grand monetary pump and debt monetization project has been put on hold. The only thing that changed was their talking publicly about it. The money press has been working to the limit, never stopped. The discussion has been kept quiet, but the machinery still makes a lot of shrill noise. The proof is not movement of lips by central bankers, but the data from the monetary aggregate. The data is compelling in calling them out. The conclusion to reach is that Quantitative Easing has become the norm, the foundation policy, the emergency action to prevent implosion of the US banking system. Hyper monetary inflation is the New Normal.
Wednesday, November 30, 2011
Deleveraging is Over — It’s Time to Cut the U.S. Budget Deficit / Interest-Rates / US Debt
By: Colin_Twiggs
US commercial bank loans and leases bottomed in April 2011, after shrinking more than $1 trillion in the previous two years. The annual rate-of-change has now recovered to positive territory, relieving downward pressure on asset prices, including stocks and real estate. Deleveraging has come to an end and is only likely to resume if the economy suffers further financial shocks.
Tuesday, November 29, 2011
Financial Armageddon Delayed; All Quiet on the European Bond Market Front / Interest-Rates / Eurozone Debt Crisis
By: Mike_Shedlock
European bonds had a good day today. A good day is when nothing blows up.
Tuesday, November 29, 2011
ECB Expected to Unleash QE Money Printing after Launching of Euro-Bonds / Interest-Rates / Quantitative Easing
By: Gary_Dorsch
Hardly a week goes by, without a major summit between German Chancellor Angela Merkel and French President Nicolas Sarkozy, trying to devise another clever scheme to save the Euro. Yet after 1-½ years of trying to contain the wildfire, - the Euro-zone's debt crisis is more dangerous than ever. The collapse of Greece's €360-billion bond market, now trading at 26% of face value, has triggered contagion sales from periphery of the Euro-zone - Greece, Ireland and Portugal, and into the next upper tier of the Euro-zone, namely, the bond markets of Spain and Italy, which together owe €3-trillion of debt.
Monday, November 28, 2011
Eurozone Being Swallowed by Expanding Debt Black Holes, Mega Bond Market Profits and Default Booms / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
The stock markets plunged last week and euro-zone bond market volatility increased with PIIGS yields spiking to new Euro highs as pressure mounts on the ECB to start printing money to monetize bankrupting PIIGS debt that effectively act as expanding debt black holes that threaten to swallow first the whole of the Eurozone and soon after collapse the worlds financial system.
Sunday, November 27, 2011
When Even Germany Fails, Europe's Inverted Yield Curves / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
Angela Merkel is leading the call for a rule change, a rewiring of the basic treaty that binds the EU. But is it both too much and too late? The market action suggests that time is indeed running out, and so we’ll look at the likely consequences. Then I glance over the other way and take notice of news out of China that may be of import. Plus a few links for your weekend listening “pleasure.” There is lots to cover, so let’s get started.