Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, January 31, 2011
Quantitative Easing is Nothing New / Interest-Rates / Quantitative Easing
By: Mike_Hewitt
The term 'quantitative easing' is just the newest term to describe the on-going central bank policy of increasing money supply.
Greetings. There has been an increasing amount of news covering the activities of The US Federal Reserve and other central banks. The newest expression being bantered about is "quantitative easing".
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Saturday, January 29, 2011
U.S. Bond Markets Deflation Whispers / Interest-Rates / Deflation
By: Brian_Bloom
In an inflationary environment, the longer dated yields should be in a bull trend relative to the shorter dated yields – because the time value of money rises in periods of inflation. Conversely, when there is deflation then money in the future is worth less than cash in the hand. Therefore the ratio should fall if deflation is being anticipated.
Saturday, January 29, 2011
Debt and Deficits, “The New Humpty Dumpty” / Interest-Rates / US Debt
By: Andy_Sutton
Irony is a wonderful thing sometimes. It has a habit of framing things exactly the way they need to be framed. Unfortunately, this is a knife that cuts both ways and irony sometimes points out awful realities. I am not a political animal per se, but I find it incredibly ironic how the avalanche of bad news on the deficit, Social Security, and essentially most of the things wrong with our economy was saved until after Tuesday’s SOTU speech. Make no mistake, this has happened before, and each time I find the timing to be absolutely incredible. It is very clear at least at this point that our leaders prefer to pay lip service to the idea of reducing the deficit rather than actually trying to rectify the situation. I say this because, with very few exceptions, the rhetoric centers around a silver bullet solution that will allow programs and spending to remain pretty much on the same path as what got us here, but at the same time, ‘fixing’ things.
Friday, January 28, 2011
Rate Hike Rumblings Increasing in the Interest Rate Market / Interest-Rates / International Bond Market
By: Mike_Larson
Psst! I have a secret for you. Central bankers in developed markets may actually start raising interest rates some day!
Shocker, I know! But if you follow the latest market moves — and listen to some of the chatter coming out of places like Europe — that’s the inevitable conclusion you arrive at.
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Friday, January 28, 2011
No respite for German Bunds / Interest-Rates / US Bonds
By: Seven_Days_Ahead
The safe haven days of the Bund are clearly in the past. After the frenetic buying that peaked in August, the Bund has been on a clear trend lower and it hasn’t been alone.
But given the Eurozone sovereign debt crisis still remains a live issue, and it was that very crisis that sent the Bund and other Bond markets soaring on safe haven trading, what has changed?
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Friday, January 28, 2011
S&P Slashes Japan's Credit Rating / Interest-Rates / Japanese Interest Rates
By: Money_Morning
Don Miller writes:
Standard & Poor's yesterday (Thursday) reduced Japan's long-term sovereign debt rating for the first time in nine years, saying Tokyo lacked a plan to deal with its mounting debt and persistent deflation.
The agency cut Japan's rating by one notch to AA minus, the fourth-highest level, citing the country's political gridlock for undermining efforts to reduce an $11 trillion (943 trillion yen) debt burden.
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Thursday, January 27, 2011
What Most People Don't Realize About The Fed's Superpowers / Interest-Rates / Central Banks
By: EWI
Since its creation in 1913, the primary intended role of the U.S. Federal Reserve Bank has been that of protector. In theory, the central bank was bestowed with the power to shape monetary policy in a way that would keep both booms and busts in check. The two main tools at its disposal -- interest rates and money creation -- would provide a "ceiling of normalcy" above expansions AND a "net of safety" below contractions.
Thursday, January 27, 2011
Should Congress Raise the U.S. Debt Ceiling? / Interest-Rates / US Debt
By: Robert_Murphy
At current rates of spending, the federal government may bump up against its debt limit as early as March. Treasury Secretary Timothy Geithner warns that it will be "catastrophic to the economy" if Congress doesn't increase Uncle Sam's credit limit. Writers in conservative outlets call for Republicans to use this opportunity to extract significant spending cuts before extending the limit. And some extreme libertarians argue that the debt ceiling shouldn't be raised, because a government default would be a good thing for the American people.
Thursday, January 27, 2011
U.S. Federal Budget Deficit Climbing Dangerously Higher on Continued 2011 Government Spending / Interest-Rates / US Debt
By: Money_Morning
Kerri Shannon writes:
On the heels of U.S. President Barack Obama's State of the Union address - during which the commander in chief highlighted the need for investment in innovation - a steep federal budget deficit projection yesterday (Wednesday) showed the harsh reality of the U.S. government's spending spree.
Thursday, January 27, 2011
FOMC Policy Statement - Status Quo is Also Noteworthy / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The federal funds rate was left unchanged at 0%-0.25% as expected; it has held at this level since December 2008. The Fed's plan to purchase $600 billion of Treasury securities has also been left in place along with the existing arrangement of reinvesting principal payments from its holdings of securities. The vote was unanimous although four members of the voting panel were replaced for 2011. Charles Plosser of the Federal Reserve Bank of Philadelphia, Richard Fisher of the Dallas Fed, Charles Evans of the Chicago Fed and Narayana Kocherlakota of the Minneapolis Fed are the replacements. Of these four voting members, Fisher and Plosser have been critics about the second round of quantitative easing that is currently underway. They have held the opinion that the current stance of monetary accommodation carries with it inflationary consequences that would be damaging to the economy. However, unlike President Hoenig of the Kansas Fed who shared this opinion and dissented at each meeting in 2010, these two members voted along with majority in today's meeting.
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Monday, January 24, 2011
The Great Global Debt Shift / Interest-Rates / Global Debt Crisis
By: John_Browne
If one were asked to describe the major global economic changes that have unfolded since the financial crisis began, a good starting place would be the massive shift of debt from the private to the public sector. Attempting to arrest a deepening crisis, governments all around the world have bailed out businesses and companies by transferring bad debts to the public books. Although these moves have provided some current stability (after all, governments are much less likely to default), the long-term consequences may be dire.
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Monday, January 24, 2011
Bernanke's Golden Dismount / Interest-Rates / US Interest Rates
By: Michael_Pento
There can be little doubt that Fed Chairman Benjamin Bernanke has been a very, very good friend to gold investors. However, some of those who have benefited from his largesse now fear that the recent selloff in gold indicates an imminent end to Bernanke's monetary high-wire act. Most assume that a cessation of the Fed's stimulative efforts, if it were to occur, would spell the end of gold's bull run. But a closer reading of Bernanke's economic philosophy and the Fed's own recent history, shows that once central banker begins a strenuous routine starts, it is very hard, if not impossible, for them to dismount.Read full article... Read full article...
Monday, January 24, 2011
Fed Accounting Rule Changes to Mask Losses / Interest-Rates / Central Banks
By: Mike_Shedlock
Many people have taken notice of changes slipped into the Fed's balance sheet reporting rules that will allegedly shield the Fed from devastating losses. Please consider Accounting Tweak Could Save Fed From Losses.
Sunday, January 23, 2011
Q.E. Policy Meets the Tea Party / Interest-Rates / US Debt
By: John_Mauldin
This week's letter is a result of two lengthy conversations I had today, which have me in a reflective mode. Plus, I finished the last, final edits of my book, all of which is causing me to mull over the unsustainability of the US fiscal situation. There is a true Endgame here, and it may happen before we are ready.
Saturday, January 22, 2011
Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade / Interest-Rates / US Debt
By: Global_Research
Fed Traders Buying Billions in U.S. Debt, Nation Risks Credit DowngradeFed Traders Buying Billions in U.S. Debt, Nation Risks Credit Downgrade
At the same time, Moody's and Standard & Poor's warned the triple-A sovereign debt rating of the United States is in jeopardy of being downgraded if there continues to be a deterioration in the negative fundamentals of the United States, including the trillion-dollar federal-budget deficits President Obama has run in the last two years.
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Saturday, January 22, 2011
U.S. Interest Rates Federal Open Market Committee Meeting Preview / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The Federal Open Market Committee (FOMC) meeting on January 25-26 is most likely to close without any change in Fed policy. The FOMC will reaffirm its plan to complete the $600 billion purchase of Treasury securities. The policy statement should contain modifications that would reflect the nature of latest economic reports. The strength in recent retail sales data, the sluggish labor market, and ongoing challenges of the housing market will feature in the policy statement.
Thursday, January 20, 2011
Why the Fed Creates So Much Money / Interest-Rates / Quantitative Easing
By: Richard_Daughty
One of the reasons behind the Federal Reserve creating so many trillions and trillions of dollars in new money is so the stock market will go up so that more taxes will be collected, and the bond market will go up so that more taxes will be collected (and less interest paid by issuers, too!), and the housing market will go up so that more taxes will be collected, and prices of everything will go up so that more taxes will be collected, so that massive, backbreaking, bankrupting deficit-spending by the government can continue going up.
Thursday, January 20, 2011
U.S. Citiies Going Bankrupt, Defaulting on Debt, Bernanke Will Not Rescue Them! / Interest-Rates / US Debt
By: Mike_Shedlock
Vallejo is using federal bankruptcy laws to stick it to unsecured creditors. Please consider Vallejo Plan Would Give Unsecured Creditors 5 to 20 Cents on the Dollar
Thursday, January 20, 2011
Financial Chaos and Debt Default in the European Union / Interest-Rates / Global Debt Crisis
By: Bob_Chapman
Between now and the end of the year, most likely in the fall, we’ll see major financial and economic problems in Greece, Ireland, Portugal, Belgium, Spain and Italy. Those events will sorely test Germany, France, Holland and Austria.
Over and over we hear announcements from Brazil of trade wars. Brazil is deliberately reining in their currency, the real, due to its strength. They have imposed reserve requirements on domestic banks’ foreign exchange positions. These are taxes on investments and de facto currency controls. Such actions are very good moves that cause indirect higher gold prices.
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Thursday, January 20, 2011
Trichet and the ECB, Finalizing a Legacy / Interest-Rates / ECB Interest Rates
By: David_Urban
On October 31, 2011 the tenure of ECB President Trichet will come do an end. In the coming months we will likely hear an increasing drumbeat of noise concerning who will replace Trichet and what policies the new leader of the ECB will embrace. In the meantime, it is likely that Trichet will use the remaining months to tie up loose ends regarding the PIIGS and set a potential course for his successor.
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