Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, September 08, 2010
Investor Shift from U.S. Treasury Bonds and into Gold and Commodities? / Interest-Rates / US Bonds
By: Gary_Dorsch
For the past decade, prices in Japan have been stable or fallen, in an economy where the central bank has pegged its overnight loan rate near zero-percent, and where 10-year bond yields haven’t climbed above 2-percent. Between 1991 and 1995, Tokyo spent $2.1-trillion on public works, in an economy that’s less than half the size of the United States, in order to lift its economy out of a severe downturn caused by the bursting of a real estate and stock market bubble in the early 1990’s.
Wednesday, September 08, 2010
Investors Searching for Yield: At Any Cost? / Interest-Rates / US Bonds
By: Kieran_Osborne
In an environment with historically low interest rates, fixed income investors have been pouring money into longer-duration securities, substituting 3 and 6 month T-Bills with 10-year Treasures or bond funds. To an extent, this should not be so surprising: the Federal Reserve’s (the Fed) extraordinary monetary policies have resulted in extremely low yields at the short end of the yield curve. Investors seeking yield have been forced out the yield curve or into increasingly risky investments in an attempt to gain higher investment returns. However, this is not a strategy without risks, both at the individual investor level and for the economy as a whole. Are the Fed’s monetary policies, combined with the government’s decision to issue increasing levels of longer duration debt, having the unintended consequence of stoking the fire for further financial stress?
Tuesday, September 07, 2010
I Guarantee You'll Lose Money in The U.S. Treasury Bond "Comfort Trap" / Interest-Rates / US Bonds
By: DailyWealth
Tom Dyson writes: You'll sleep soundly at night. Your neighbors won't laugh at you. Your pulse won't budge. But if you make this trade, I guarantee you'll lose money...
One year ago, I opened an essay with the paragraph above. Then I showed you why a certain trade was a foolish proposition, even though it appeared to be a "no brainer."
Saturday, September 04, 2010
Quantitative Easing QE2, Debt Created Out of Thin Air, Banking Crisis Worsens / Interest-Rates / Quantitative Easing
By: Bob_Chapman
In a futile attempt to keep the economic and financial system afloat, QE2 is underway. It began in early June as banks changed the rules for awarding loans. Their efforts over the past few months have only met with moderate success. Banks had cut back lending by some 25% over the past 16 months mainly to small and medium-sized companies. In the process the economy slowed down markedly and unemployment shot up to levels not seen since the 1930s. These first attempts to restart a sliding economy have so far not met with success. It was not long after that the real decision makers at the Fed that QE2 was going to be needed. We saw the marshalling of financial and economic forces and the tell tale sign of a stock market moving upward for unexplained reasons. That tipped us to QE2.
Friday, September 03, 2010
Moving into Bonds: From Frying Pan to Fire / Interest-Rates / International Bond Market
By: David_Galland
David Galland and Kevin Brekke, Casey Research writes: The other day, I came across an article that said, while individuals may be moving their money out of equities, they have been moving into bond funds - and in a big way.
It's called jumping from the frying fan into the fire.
Read full article... Read full article...
Friday, September 03, 2010
How to Profit From the “Widow-Maker” Trade, Shorting U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Money_Morning
Keith Fitz-Gerald writes:
Although we're in the midst of a U.S. Treasury bond bubble so big that pundits are calling for investors to short the government paper, resist the urge to jump in with both feet.
Doing so right now is nothing more than a "widow-maker" trade that will test both your patience and your pocket book. And yet, "shorting" the U.S. Treasury bond market is an opportunity you can't afford to pass up - so long as you execute the trade correctly.
Read full article... Read full article...
Friday, September 03, 2010
Exhaustion Gap on Yields Chart! / Interest-Rates / US Bonds
By: Brian_Bloom
Summary: The charts are signalling an important change in market attitudes to risk – and by implication, the Fed’s attitude to risk. If yields are to rise from here it will be because investors in treasury bonds are expecting to incur capital losses. Why would this be? This article comes to the conclusion that we are heading for a period of tight capital markets. If money is tight, credit will be tight. If credit is tight, then, to borrow money will require the borrower to pay higher rates of interest to compensate the lender for his higher level of risk. If credit is tight, consumer demand will, at best, not grow and, at worst, fall. In the former case, we can expect a steady-as-she-goes outcome. In the latter case, the result will be a slow down in economic activity and a so-called “double dip” recession.
Thursday, September 02, 2010
Blowing Bubbles, U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Charles_Maley
Common sense is the knack of seeing things as they are, and doing things as they ought to be done – C.E. Stowe
The American media is officially obsessed with sensational terminology when describing the financial markets these days. Nothing trends, it either explodes higher or melts down. We have “flash crashes”, a “new normal” and the frightening “double dip”. We also see bubbles about to burst everywhere.
Read full article... Read full article...
Wednesday, September 01, 2010
Government Debt Defaults and Inflation Are the Norm, Not the Exception / Interest-Rates / Global Debt Crisis
By: Claus_Vogt
The past 15 years have certainly been exciting for investors. During the second half of the 1990s we experienced one of the largest stock market bubbles of all times … and its bursting. Then, only a few years later, one of the biggest real estate bubbles … and its bursting.
In the aftermath of these events the world stumbled into the most severe economic downturn since the Great Depression of the 1930s. And the banking system came to the brink of a total collapse.
Read full article... Read full article...
Wednesday, September 01, 2010
US Must Displace Global Treasury Bonds Activity / Interest-Rates / US Bonds
By: Dr_Jeff_Lewis
Extremely low Treasury rates have been a boon for the Federal Government's bottom line, but they haven't helped attract any global interest in US debt. Instead, nations around the world are cutting back on their Treasury positions, internalizing the financing of new debts and deficits.
Read full article... Read full article...
Monday, August 30, 2010
What is Going on in Washington? / Interest-Rates / US Debt
By: Michael_J_Kosares
What if you earned half of what you spent in a month and put the other half on your credit card? What if you did that month after month, year after year until your debt was six times your annual income? Would you consider yourself to be in deep financial trouble?
Monday, August 30, 2010
Bernanke Hallucinating That Printing Money and Buying Bonds Can Save the Economy / Interest-Rates / US Debt
By: Martin_D_Weiss
If Fed Chairman Ben Bernanke honestly believes what he said at Jackson Hole on Friday — that he can save the economy by printing more money and buying more bonds — he’s hallucinating.
Through the first quarter of this year, he printed $1.5 trillion of paper money and promptly bought $1.5 trillion in mortgage bonds, government agency bonds, and Treasury bonds.
Read full article... Read full article...
Monday, August 30, 2010
It is the FedOnomics, Stupid! / Interest-Rates / US Bonds
By: Submissions
Seth Barani writes: It was 1913, year when US Federal Reserve Bank was established. Coincidently, the 16th amendment on income taxation was also passed in the same year. America was getting ready to wage wars. Fed was getting ready to print (aka "create") money and supply it in plenty. All done at your cost.
Sunday, August 29, 2010
U.S. Treasury Bond Market Rally Hits Bernanke Brick Wall / Interest-Rates / US Bonds
By: Levente_Mady
The bond market continued to power ahead – until Thursday. On Friday morning the All-mighty Ben Bernanke opened his mouth and the words of wisdom that were emitted have caused great joy and happiness for the risk trade and got the long bond futures to tank 2½ points on the day. For a day it appears that Ben can walk on water, but I have to wonder how long before the deeply and increasingly disturbing reality will make this mirage disappear.
Read full article... Read full article...
Saturday, August 28, 2010
Translation of Bernanke's Jackson Hole Speech / Interest-Rates / Central Banks
By: Gary_North
It is far easier to translate Bernanke than Greenspan. Both men had this task: to deceive the public. Greenspan adopted verbal obfuscation as his technique. Bernanke has adopted boredom.
I hope this exercise will help you understand his speech of August 27.
Read full article... Read full article...
Saturday, August 28, 2010
U.S. Fed About to Launch Monetary Shock and Awe / Interest-Rates / US Debt
By: Mike_Whitney
The equities markets are in disarray while the bond markets continue to surge. The avalanche of bad news has started to take its toll on investor sentiment. Barry Ritholtz's "The Big Picture" reports that the bears have taken the high-ground and bullishness has dropped to its lowest level since March ‘09 when the market did a quick about-face and began a year-long rally. Could it happen again? No one knows, but the mood has definitely darkened along with the data. There's no talk of green shoots any more, and even the deficit hawks have gone into hibernation. It feels like the calm before the storm, which is why all eyes were on Jackson Hole this morning where Fed chairman Ben Bernanke delivered his verdict on the state of the economy on Friday.
Saturday, August 28, 2010
U.S. Fiscal Debt and Monetization are taking the Financial System Down / Interest-Rates / US Debt
By: Bob_Chapman
The Congressional Budget Office thinks the country faces serious budget problems, as well as serious economic problems, because it estimates that the deficit for 2011 will be $1.066 trillion. In addition it sees fiscal 2010, which ends on September 30th, at $1.34 trillion, or 9% of GDP. Last year was 9.9%.
Friday, August 27, 2010
Gold and Stocks Yield Relationship and Buy Signals / Interest-Rates / US Bonds
By: Adrian_Ash
Time was, stocks were riskier than bonds and should have the higher yield. But then came inflation...
AT THE START of this week, stocks on the Dow Jones, Tokyo Nikkei and FTSE100 in London offered a bigger dividend-yield than you'd earn in interest from their local government bonds.
Read full article... Read full article...
Friday, August 27, 2010
U.S. Treasury Bond Rally Tiring, Gold Moving Higher / Interest-Rates / US Bonds
By: Mike_Paulenoff
What might Bernanke's speech have said or implied that triggered the market response that we have witnessed so far today? How about: Don't fight the Fed...The economy is anemic, and the outlook might be uncertain-to-poor, but the Fed will pump, buy, and do whatever it takes to turn it around. The Fed will keep short rates at ZERO for a long time, and force companies and investors to take risk....
Friday, August 27, 2010
Interest Rates Remain Low as Economic Concerns Persist / Interest-Rates / US Interest Rates
By: LiveCharts
National average mortgage rates remain historically low and there appears to be no end in sight to the Fed’s low to no interest rate policy. A less than stellar Commerce Department report on the second quarter gross domestic product Friday (August 27) morning is the latest contributor to the sense of pessimism hanging over the US economy.
Read full article... Read full article...