Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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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Tuesday, September 06, 2011
Will Governments and Central Bankers Bail Out Bondholders and Banks Again? / Interest-Rates / Global Debt Crisis
By: Mike_Shedlock
As noted previously, it is crystal clear to everyone but bankers and brain-dead analysts that banks need to be recapitalized, in Europe and the US as well.
The crucial question is "how?".
Tuesday, September 06, 2011
Markets Have Lost Confidence in Italy / Interest-Rates / Global Debt Crisis
By: Mike_Shedlock
The warnings are flying today so let's take a look at a few of them, including a couple of my own.
Trichet Warns Heads of States
Tuesday, September 06, 2011
Many Banks Will Not Survive if Forced to Value Sovereign Debt at Market Prices / Interest-Rates / Credit Crisis 2011
By: Mike_Shedlock
Josef Ackermann, CEO of Deutsche Bank admitted the obvious today with statements recognizing that many organizations will fail at mark-to-market pricing. To show you the Fantasyland world these bankers live in, Ackermann also believes European banks are now much better capitalized and less dependent on short-term financing.
Monday, September 05, 2011
Falling Interest Rates and the Fallacy of Monetary Deflation at the Zero Bound / Interest-Rates / US Interest Rates
By: Jesse
Liquidity Trap, Straight Up, with a Twist
I think we are all familiar with the recently popular viewpoint that as the financial economy crashed, what people called 'money destruction' would follow. Well actually the destruction of credit which some considered the same as money, as money itself. There were many detailed and complex thought experiments to explain why this must happen, involving monetary theories.
Tuesday, August 30, 2011
Central Bankers' Next Panic Move / Interest-Rates / Central Banks
By: Money_Morning
Sean Hyman writes:
It may seem like panic in the stock markets just started this month, but the truth is governments and central bankers have been in "panic mode" since March. We just didn't see it in the markets until a few weeks ago. But if you look back, you can tell central bankers were panicking because they kept intervening to manipulate their stock or currency markets. Here's a quick play-by-play of those panic attacks and the real messages behind them:
Tuesday, August 30, 2011
U.S. Treasury Market Calling Bernanke's Bluff / Interest-Rates / US Bonds
By: Tony_Pallotta
The repurchase agreement or "repo" market is where primary dealers finance their inventory of US Treasuries, where companies find short term financing and where money market funds invest much of their capital. With daily "repo" transactions estimated at $2-4 trillion USD it is truly amazing how few understand the grease that keeps the US economy functioning.
Monday, August 29, 2011
How to Protect and Profit From U.s. Treasury Bond Market Crash / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
By now, you've probably taken note of the growing bubble in Treasury bonds.
The yield on the 10-year Treasury bond fell below 2% for the first time in 50 years in the wake of the U.S. credit rating downgrade.
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Monday, August 29, 2011
PIMCO Missed the Trade of the Year in the U.S. Treasury Bond Market / Interest-Rates / US Bonds
By: EconMatters
PIMCO who specializes in Bonds, having the largest bond fund in the world could not have been more wrong about an asset class, which is surprising considering their experience in this sector. Bill Gross`s official declaration that his firm was shorting the US Treasury Market on April 11th of this year to the day marked the literal double bottom in price/high in yield for the year, and it has been one heck of a one-way trade in the opposite direction ever since.
Monday, August 29, 2011
What happens when the U.S. Bond Market Loses its Patience? / Interest-Rates / US Bonds
By: Aftab_Singh
The concomitant surges in the dollar prices of gold and the US treasury note seem to have got many market participants scratching their heads. For isn’t gold an ‘inflation asset’ and the treasury note a ‘deflation asset’? Aren’t they supposed to be antagonistic to one another? We square this price action by noting that the means of the currency skeptic are distinctly peculiar in this post-Bretton Woods experiment — it matters that the Federal Reserve note is by and large ‘backed’ by US government securities and gold. That being said, our hunch is that this price action is a relatively temporary phenomenon; for whereas gold remains intact regardless of an increasingly precarious stock of irredeemable claims upon it, US government securities do not. We believe that the current tolerance of the US bond market should be regarded as the last gift from above. Here I outline why a world with an intolerant bond market might not be that pleasant.
Sunday, August 28, 2011
China's Debt Problems Rival the West / Interest-Rates / China Economy
By: Justice_Litle
Though the focus has been on the U.S. and Europe, China too has debt problems to contend with.
"If you look at the accounting, I don't see how anyone could put a penny there."
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