Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, September 21, 2011
QE3: What are The Implications of Critical Warnings To Bernanke? / Interest-Rates / Quantitative Easing
By: DK_Matai
Top Republican lawmakers in both chambers of Congress have warned Federal Reserve Chairman Ben Bernanke to refrain from further extraordinary intervention or additional quantitative easing after today's meeting of the Federal Open Market Committee (FOMC). Questioning the efficacy of the first two rounds of monetary easing:
Wednesday, September 21, 2011
Has the FED Lost Control of Long End of the Yield Curve? We think so! / Interest-Rates / US Bonds
By: Capital3X
There is nothing more scary for the FED than to look at the 30 year yield sticky and stubborn. The only reason why FED would need to do a QE is to take control of 30 year yield. The short end is near zero and there is very little that can be done at this end. The 20/30 year yield now is where the absolute need if for a QE. The problem now is not whether the QE is of few billions or more. The FED has no option but to do: QE ad infinitum.
Wednesday, September 21, 2011
Today's FOMC Meeting Will Prove That Team Bernanke is Out of Ideas / Interest-Rates / US Interest Rates
By: Money_Morning
Kerri Shannon writes:
If you're handicapping the U.S. Federal Reserve's two-day Federal Open Market Committee (FOMC) meeting that concludes today (Wednesday), you can make the following two predictions - and you'll almost certainly be right:
Wednesday, September 21, 2011
Europe's Botox Bailouts on a Corpse / Interest-Rates / Credit Crisis 2011
By: Gary_North
"It's a bit like botox. It looks good for a while but will eventually start to sag again." ~ Katherine Garrett-Cox
Mrs. Cox is the chief executive of England's Alliance Trust investment fund. She has dismissed Europe's attempts to solve its debt crisis as "economic cosmetic surgery", warning there is "more pain" to come over the next few months. So we read in the London Telegraph.
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Wednesday, September 21, 2011
Central Banks Can Increase the Money Supply, Even If Banks Do Not Lend / Interest-Rates / Quantitative Easing
By: Thorsten_Polleit
I. The Relation between Bank Credit and Money Growth
In today's fiat-money world, money is mostly produced through bank lending. Whenever a commercial bank provides credit to, say, consumers, firms, and government entities, it issues new money, thereby increasing the economy's money stock.
Economists from the Austrian School of economics call this kind of money production "money creation out of thin air," as the increase in money through bank circulation credit doesn't require the existence of real savings.
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Wednesday, September 21, 2011
Fed Target Must be 5% Inflation / Interest-Rates / Inflation
By: Dr_Jeff_Lewis
The Federal Reserve may engage in what has been mocked by investors as “the twist,” a bond buying program intended to reduce long-term borrowing costs by soaking up long-dated Treasury issues. Of course, no matter the short-term goal, the real goal is to monetize the entirety of the US debt loads.
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Wednesday, September 21, 2011
Details to Note Prior to Fed Announcement on September 21 / Interest-Rates / US Interest Rates
By: Asha_Bangalore
It is widely anticipated that the Fed will announce new monetary policy support following the 2-day FOMC meeting on September 21, 2011. The Fed is expected to put in place “Operation Twist” to bring down rates at the long-end by purchasing long term U.S. Treasury securities to replace U.S. Treasury securities of short maturities in its portfolio. A large percentage of the Fed’s holdings are of 1-5 years maturity (see Chart 1).
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Tuesday, September 20, 2011
How Greece's Debt Issues Are Becoming a Global "Black Hole" / Interest-Rates / Global Debt Crisis
By: Money_Morning
Jon D. Markman writes:
The extremely volatile markets of late stem in part from news suggesting Greece's debt issues have made a default imminent - creating a global black hole that's sucking in a growing number of other economies with it.
Default fears intensified last Friday when European finance ministers announced they would delay a decision on whether or not Greece was eligible for its sixth tranche of bailout funds. Greece was scheduled to get the next $11 billion (8 billion euros) installment of its $152.6 billion (110 billion euros) aid package by the end of September, but now must wait at least until October.
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Monday, September 19, 2011
EU Bonds Rollover Debt with a Chinese Bailout / Interest-Rates / Global Debt Crisis
By: BATR
The financial press is inundated with the most ominous reports of an EU meltdown. The downturn in economic activity and little growth all comes down to the unsustainability in servicing the debt obligations. Sovereign countries bailouts only pile on even more debt. European banks are tied to a Euro dominated currency, while the political union is anything but unified. Any serious student of European history inescapably concludes that the perennial ambition to orchestrate a single patchwork of diverse cultures and interests into a pan European brotherhood is always doomed. A consensus fraternity based upon socialistic economics feeds the inevitable default. However, never fear the banksters will not suffer, as the globalists prepare to use their next crisis, to consolidate their grip of world dominance.
Sunday, September 18, 2011
The EU Debt Bubble: The Eurozone is Crumbling / Interest-Rates / Global Debt Crisis
By: Bob_Chapman
There are those who make excuses for the Federal Reserve and for the European Central Bank as well. Both are controlled by the banking community and are only interested in enriching themselves. These central banks take their orders who own or control these central banks. In the case of the ECNB and other sovereign banks, they are responsible for the terrible state of finances in the euro zone. Yes, we know the banks, and sovereign bans made the loans or brought the bonds, but the ECB has a direct connection into these institutions. The ECB president Jean-Claude Trichet is supposed to be a very bright banker. If that is so, why did this happen on his watch? We will tell you why. It is because he serves the bankers and not the people. He is just another front man for the Illuminists, just as Mr. Bernanke is. Mr. Trichet has only 2-months to go and then he can rejoin his banker friends.
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Sunday, September 18, 2011
How Does Europe's Debt Crisis Affect America? / Interest-Rates / Global Debt Crisis
By: Washingtons_Blog
What’s Happening In Europe … Does It Impact American Investors and Taxpayers?
All of Europe is now infected with the debt crisis, not just the periphery.
As CNBC notes, the multinational bailout of European banks won’t do much:
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Thursday, September 15, 2011
The Insidious Truth About Federal Reserve Policy / Interest-Rates / Central Banks
By: Money_Morning
Shah Gilani writes: So far, U.S. Federal Reserve policy has done nothing to help the economy. To the contrary, it's actually been quite destructive.
Yet Federal Reserve Chairman Ben S. Bernanke and his cohorts will likely expand upon their ineffective policies next week by announcing a new "Operation Twist."
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Thursday, September 15, 2011
U.S. Treasury Yields Plummet, Yet Demand is Lacking / Interest-Rates / US Bonds
By: Dr_Jeff_Lewis
As yields on Greek debt soared to a record 117% for one-year notes, the US Treasury announced a new auction of 3-year notes with an entirely different response.
While investors were busy watching Europe for any sign of life, a round of 3-year US Treasury debt escaped auction at a record low rate. According to the Treasury, the notes sold with a yield of .334% per year, meaning investors will walk away with little more than $10 in 2014 for every $1,000 invested.
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Sunday, September 11, 2011
Greek Debt Default Imminent - Eurozone Crisis Escalates - Fear Spreads / Interest-Rates / Global Debt Crisis
By: DK_Matai
1. Greek default now appears to be imminent and the inevitable is happening in regard to the Eurozone given that the Germans hold the trump cards;
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Sunday, September 11, 2011
QE3 and Toxic Assets: The Fed's "Monetary Ammunition" / Interest-Rates / Quantitative Easing
By: Bob_Chapman
Many people believe the Jackson Hole was a non-event, a failure and it was. QE 3 was not announced, as we predicted. We believe that was being saved for mid-September when the $300 billion rollover in Treasury securities is completed. Mr. Bernanke has failed in a number of respects, the most glaring being zero interest rates for 2-years and no housing recovery.
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Saturday, September 10, 2011
Fed 'Twisting' Will Stimulate Economic Activity for Bond Market Traders / Interest-Rates / US Bonds
By: Paul_L_Kasriel
The consensus view is that after adjourning from its September 20-21 meeting the FOMC will announce a plan to lengthen the maturity structure of its securities portfolio by increasing the proportion of longer-maturity securities in the portfolio. Importantly, the size of the overall securities portfolio is likely to be held constant. Thus, shorter-maturity securities will be sold and/or allowed to run-off and be replaced with a like dollar amount of longer-maturity securities. Presumably, the intended purpose of these securities transactions is to push down yields on longer-maturity securities. The FOMC most likely would prefer that the yields on shorter-term securities remain at their current very low level, but would not be terribly disturbed if these yields drifted up a bit as more of these shorter-maturity securities were dumped into the market from the Fed's portfolio. The presumed purpose of this "twisting" of the shape of the yield curve is to stimulate the demand for longer-lived real assets such as houses, durable consumer goods, business capital equipment and nonresidential real estate by lowering the interest rates on longer-term fixed rate loans and securities.
Friday, September 09, 2011
Germany Prepares for Eurozone Debt Default, ECB Resignation Hammers Stocks / Interest-Rates / Global Debt Crisis
By: Mike_Shedlock
Once again news from Europe resonates in the markets. The 2-day stock rally led by the German court ruling has been nearly wiped out.
Friday, September 09, 2011
European Debt Crisis Worse than 2008 / Interest-Rates / Credit Crisis 2011
By: Dr_Jeff_Lewis
While the US markets were closed on Monday in observance of Labor Day, it became grossly apparent that the European debt crisis would be far worse than the American financial crisis of 2008.
Astute investors will notice something vastly different from the European implosion. Whereas fixed-income securities, primarily US Treasuries, became more attractive to investors as the equity markets tanked in 2008 and 2009, the same isn’t happening in Europe.
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Thursday, September 08, 2011
PIMCO's Gross: QE1 and QE2 'Destroyed' Credit Creation / Interest-Rates / Credit Crisis 2011
By: Bloomberg
Bill Gross of PIMCO appeared on Bloomberg Television's "Surveillance Midday" with Tom Keene this afternoon to discuss the impact of the Fed's asset purchases and the outlook for market reaction to tonight's speech by President Obama.
Gross said that QE by the Fed "destroyed" credit creation, that he'd like to "see something bold" from Obama and that the markets will be "disappointed" if stimulus is below $300 billion.
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Wednesday, September 07, 2011
Awaiting Panic Low in U.S. Tresury Bond Yield / Interest-Rates / US Interest Rates
By: Mike_Paulenoff
Remarkably, 10-year yield has declined beneath its December 2008 "crisis" low of 2.04% to a new "generational low" of 1.94% so far, as global money continues to flow into U.S. Treasury paper (despite its suspect rating downgrade in August).
Purely from a technical perspective, all eyes now are on the behavior of weekly RSI (momentum), which so far has NOT confirmed recent yield weakness from 2.30% and which we should consider a potential warning signal that 10-year yield is in its price capitulation phase.
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