Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, November 04, 2011
Wondering About the Size of Greece Debt Exposure? / Interest-Rates / Global Debt Crisis
By: Asha_Bangalore
Greek drama is now no longer confined to the literature class. The current Greek economic drama will be enshrined in economic history books and economic/financial policy studies. As the crisis has unfolded, it has been frequently challenging to find a succinct representation of the exposure to Greek debt. Thanks to the folks at the BBC, here is that picture.
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Friday, November 04, 2011
The Fed’s Forecast Begs for Action, Bernanke Hints at QE3 / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The main conclusion from Bernanke’s press conference on November 2 is that the Fed has two choices. QE3 (quantitative easing) is one option given the Fed’s gloomy forecast (see Table 1). The precise timing, magnitude and composition of QE3 are unknown but Bernanke’s responses suggest that there is a willingness to engage, if essential. Large asset purchases are likely to be a combination of Treasury securities and mortgage-backed securities. The second alternative is its communication strategy much like the August announcement that the federal funds rate would be held at the current rate at the least until mid-2013. In other words, it would entail tying interest rate decisions to economic conditions in policy communications.Read full article... Read full article...
Thursday, November 03, 2011
The Fed is Less Optimistic about Growth and Employment, But Stands Pat / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The Fed left current policies intact and opted not to take any action today after implementing far reaching policy changes at the August and September FOMC meetings. Fed President Evans of the Chicago Fed cast the dissenting vote and would have preferred to provide more monetary policy accommodation. This is in stark contrast to the three dissents in August and September when Fed Presidents of Dallas, Minneapolis, and Philadelphia voted against the decision to hold the policy rate unchanged until mid-2013 and to undertake the maturity extension program of $400 billion dollars. Fed President Rosengren of Boston had cast a similar dissent in December 2007 arguing for a larger cut of the federal funds rate when the Fed lowered the policy rate by 25 bps to 4.25%.
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Tuesday, November 01, 2011
The Debt Burden Zombie Club of Nations / Interest-Rates / Global Debt Crisis
By: Michael_Pento
Greece has supposedly received a bailout and markets across the globe are soaring. In fact, they are rising in the same manner they did a few months after the bailout of the U.S. financial system, now known as the Emergency Economic Stabilization act of 2008. However, the truth is there is no such thing as a complete and genuine bailout; there is only a transfer of burden from the government and banks to the middle class.
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Tuesday, November 01, 2011
Spain's Economic Crisis Shows the Eurozone Can't Escape its Debt Trap / Interest-Rates / Global Debt Crisis
By: Money_Morning
David Zeiler writes:
Fresh evidence of Spain's deepening economic crisis has revived fears about that nation's ability to dig out of its sovereign debt problems, and illustrates why the Eurozone debt crisis is likely to drag on for years.
Spain's gross domestic product (GDP) was flat in the third quarter, the country's central bank said yesterday (Monday). That follows anemic growth of 0.4% in the first quarter and 0.2% in the second quarter.
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Monday, October 31, 2011
U.S. Treasury Bond Weakness in Synch With Stocks / Interest-Rates / US Bonds
By: Mike_Paulenoff
The ProShares UltraShort 20+ Year Treasury ETF (TBT) remains directly related to the direction of the stock indices. The correction off of last Thursday's high in the emini S&P 500 has been accompanied by a correction in the TBT.
This reflects a flight out of risk into the relative safety of the bond market, which in turn compromises the price structure of the TBT, as it represents longer-term rates.
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Monday, October 31, 2011
Foreign Borrowing Poses An Imminent Threat to the U.S. Dollar and U.S. Financial System / Interest-Rates / US Debt
By: Janet_Tavakoli
The United States is the largest debtor nation in the history of the world, and our borrowing is increasing. In 1950 spending for social programs was only one percent of the total Federal Budget. As the economy grew, social programs expanded to include Social Security, Medicare, Medicaid, Food Stamps, Unemployment Compensation, Supplemental Security for the Disabled, and educational programs. In 1983 as the United States pulled out of an ugly recession and brought inflation under control, social programs consumed 26% of the budget. In fiscal year 2012, they’ll eat up an estimated 57% of the budget.
Sunday, October 30, 2011
European Debt Crisis Summit: A Definite Plan But with No Details / Interest-Rates / Global Debt Crisis
By: John_Mauldin
Where is the peace dividend that was supposed to come after the end of the Cold War? Where are the fruits of the amazing gains in efficiency that technology has afforded? It has been eaten by the bureaucracy that manages our every move on this earth. The voracious and insatiable monster here is called the Federal Code that calls on thousands of agencies to exercise the police power to prevent us from living free lives.
It is as Bastiat said: the real cost of the state is the prosperity we do not see, the jobs that don't exist, the technologies to which we do not have access, the businesses that do not come into existence, and the bright future that is stolen from us. The state has looted us just as surely as a robber who enters our home at night and steals all that we love. - William "Bill" Bonner
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Saturday, October 29, 2011
U.S. Fed Operation Twist – Unmet Goal, For Now / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The Fed put in place “Operation Twist” on September 21, 2011 with the goal of guiding long rates to a lower level. The 10-year Treasury note yield closed at a low of 1.72% on the day after the new policy was instituted. As of this writing, it is trading at 2.33%. The 30-year mortgage rate dropped briefly to 3.94% but is back up at levels seen just prior to the announcement (4.10%).
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Friday, October 28, 2011
How You Can Make Yourself a Better Trader / Interest-Rates / Learn to Trade
By: EWI
The idea of being a successful trader is exciting. The reality of becoming one is another thing. You need to understand more than the markets -- you need to understand yourself.
EWI's Senior Analyst Jeffrey Kennedy knows what it takes. He has analyzed and traded the markets for over 15 years. Jeffrey has learned what it takes to be successful, and he has the discipline to apply that knowledge. Enjoy this excerpt from his free Club EWI eBook Best of Traders Classroom, in which he answers: What kind of trader am I?
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Friday, October 28, 2011
So How Do These Sorts of Crises End? / Interest-Rates / Global Debt Crisis
By: Paul_Tustain
However this crisis is resolved, guess who'll be footing the bill...
The World has endured these sorts of crises before. Somehow they come to an end. What happens?
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Friday, October 28, 2011
“Standard” Credit Default Swaps on Greece Are a Sham and It’s Not a Surprise / Interest-Rates / Global Debt Crisis
By: Janet_Tavakoli
At least it’s not a surprise to any financial professional that has paid attention to the false reassurances that the International Swaps and Derivatives Association, Inc. (ISDA) has given over the years to naïve participants in the credit derivatives market.
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Friday, October 28, 2011
Greece 50% Debt Default, Greek Bondholders at a Loss / Interest-Rates / Global Debt Crisis
By: Peter_Schiff
Michael Finger writes: In an agreement announced overnight, the European Union offered $100 billion to stem an imminent Greek debt default in exchange for a 50% haircut to Greek bondholders. This is a bittersweet victory for those of us who believe in the power of the free market.
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Friday, October 28, 2011
Money, Credit and the Federal Reserve Banking System, Robert Prechter Explains The Fed, Part III / Interest-Rates / Central Banks
By: EWI
This is Part III, the final part of our series "Robert Prechter Explains The Fed." (Here are Part I and Part II.)
Money, Credit and the Federal Reserve Banking System
Conquer the Crash, Chapter 10
By Robert Prechter
Wednesday, October 26, 2011
Foreigners Losing Confidence in Holding U.S. Treasury and Agency Debt / Interest-Rates / US Bonds
By: Casey_Research
Bud Conrad, Casey Research writes: Foreign central banks buy US Treasury and Agency debt through accounts at the Federal Reserve, where it is held in custody. Without these central banks buying our debt, the US federal government would have to find a new source of funds or the result could be higher interest rates. Looking at the data on a monthly basis (and then multiplied by 12 to give the annual rate), here is the dramatic picture of how foreign central-bank purchases of our debt have shifted, from buying $500 billion to selling off $1 trillion.
Wednesday, October 26, 2011
Beware of Floating Interest Rates / Interest-Rates / US Interest Rates
By: Neeraj_Chaudhary
According to US government figures, the yield on the 10-Year US Treasury note reached a record low of 1.72% last month. Thus, despite the fact that government debt has exploded at a rate of more than $1 trillion per year, and the fact that S&P recently downgraded US debt, it appears that market demand for long-term US debt is nearly insatiable.
Wednesday, October 26, 2011
The Treasury Investment That's WAY Better Than Treasury Inflation Protected Securities (TIPS) / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
I've made no secret of my aversion to Treasury bonds. Yields right now are irrationally low, and thus do not accurately reflect U.S. credit risk.
And since inflation is already running higher than bond yields - and is likely to rise even further - Treasuries offer an inadequate return at best, and at worst, a capital loss if sold before maturity.
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Monday, October 24, 2011
Another U.S. Sovereign Downgrade Likely By 2011 Year End, Says Merrill / Interest-Rates / Global Debt Crisis
By: EconMatters
While some of us are still recovering from the first ever U.S. sovereign credit downgrade from S&P in August, BofA Merrill dropped another bomb. From Reuters,
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Monday, October 24, 2011
Assessing the Damage of the European Banking Crisis / Interest-Rates / Credit Crisis 2011
By: STRATFOR
Europe faces a banking crisis it has not wanted to admit even exists.
The formal authority on financial stability, International Monetary Fund (IMF) chief Christine Lagarde, made her institution’s opinion on European banking known back in August when she prompted the European Union to engage in an immediate 200 billion-euro bank recapitalization effort. The response was broad-based derision from Europeans at the local, national and EU bureaucratic levels. The vehemence directed at Lagarde was particularly notable as Lagarde is certainly in a position to know what she was talking about: Until July 5, her title was not IMF chief, but French finance minister. She has seen the books, and the books are bad. Due to European inaction, the IMF on Oct. 18 raised its estimate for recapitalization needs from 200 billion euros to 300 billion euros ($274 billion to $410 billion).
Sunday, October 23, 2011
What Quantitative Easing Really Means / Interest-Rates / Quantitative Easing
By: Global_Research
Prof. Ismael Hossein-zadeh writes: Stripped from the fancy (and mystifying) jargon, quantitative easing (QE) simply means increasing the quantity of money supply, or easing credit conditions—in the hope of stimulating thestagnant economy. This is usually done byhaving central banks inject a pre-determined quantity of money into the coffers of commercial banksin return for the purchase of their financial assets, which consist largely of government bonds. Although it is typically done electronically, or on paper, its practical effect is the same as printing money.
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