Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, August 09, 2010
Federal Reserve Magically Erasing Debts and Liabilities / Interest-Rates / US Debt
By: Richard_Daughty
Hossein Askari is a professor of international business and international affairs at George Washington University, and Noureddine Krichene is an economist with a PhD from UCLA, which I mention to establish their credentials, since some bozo from the Federal Reserve created a stir when he said, with a sniff of condescension and smugness, that nobody should comment about economics unless they have a PhD in economics from a “proper” university, because we unwashed huddled masses are “dangerous” and a “threat to society.”
Friday, August 06, 2010
UK Gilts Set to Drive Ahead / Interest-Rates / UK Debt
By: Seven_Days_Ahead
The Technical Trader’s view:
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Tuesday, August 03, 2010
Hedonic Adjustments and the Mulligans of Monetary Policy / Interest-Rates / US Interest Rates
By: Richard_Daughty
I knew it was going to be "one of those days" when, on the very first fairway, this new guy Bob says that he thought my tee shot had landed over there behind those trees, and how he is surprised to see that my golf ball is now sitting on the fairway, and another twenty yards further towards the hole, too.
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Tuesday, August 03, 2010
Can the Fed Successfully Exit Liquidity Flood Policies ? / Interest-Rates / Credit Crisis 2010
By: David_Howden
The Federal Reserve Bank of Minneapolis recently interviewed macroeconomist Robert Hall for the June issue of its quarterly magazine, The Region. His words on the Federal Reserve's ability to enact an exit strategy to unwind its unconventional policies were clear and sure: "There are two branches to the exit strategy: There's paying interest on reserves, and there's reducing reserves back to normal levels. They're both completely safe, so it's a nonissue."
Monday, August 02, 2010
US Economic Outlook: Indebted to Death / Interest-Rates / US Debt
By: Richard_Daughty
John Stepek at MoneyWeek.com, talking about the “European bank stress tests” that were “a whitewash, of course” said that it kind of reminded him of “one of Gordon Brown’s budgets.”
My immediate reaction, of course, and speaking as a true American, is to ask, “Huh? Gordon who?” as a clever way of reminding these British guys that real Americans, like me, don’t know about anything, or care about anything, that is not about America and/or Americans and how it affects us, as Americans, but mostly me, personally, as an American.
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Sunday, August 01, 2010
Debt is Devouring Sovereign Nations, U.S. Deficit is being Monetized by the Fed / Interest-Rates / Global Debt Crisis
By: Bob_Chapman
While we wait, watch and listen, the Fed decides when the banks will be given the word to start lending to get the domestic economy back to neutral. Action is needed quickly because the world economy is quickly deteriorating, and the recovery is simply not happening, as the administration admits to a fiscal deficit of $1.4 trillion. That would be down from a deficit of $1.9 trillion in 2009. Our long-term estimate has been $1.6 to $2 trillion.
Friday, July 30, 2010
New Upleg for TLT Treasury Bond ETF / Interest-Rates / US Bonds
By: Mike_Paulenoff
This morning's surge in the iShares Barclays 20+ Year Treas Bond (NYSE: TLT) reflects greater-than-expected economic deceleration from Q2 to the revised (higher) Q1, as well as disappointing figures for personal consumption, which has triggered a fierce bout of short-covering.
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Thursday, July 29, 2010
The Fed Flashes the Nuclear Quantitative Easing Trump Card / Interest-Rates / Quantitative Easing
By: Gary_Dorsch
Of ten people who hear the same story or speech, each one might understand it differently. Perhaps, only one of them will understand it correctly. On July 21st, Federal Reserve chief Ben Bernanke was speaking in riddles, as central bankers are apt to do, while delivering his testimony before Congress. Each word that’s uttered by the Fed chief is scrutinized by anxious speculators, who try to interpret the message correctly, before quickly placing bets in the marketplace.
Wednesday, July 28, 2010
European Banking Stress Test: Much Ado about Nothing / Interest-Rates / Credit Crisis 2010
By: Claus_Vogt
On Friday the Committee of European Banking Supervisors (CEBS) revealed the results of its banking sector stress test. The objective of the test, in the CEBS’s dry words, was to “provide policy information for assessing the resilience of the EU banking system to possible adverse economic developments and to assess the ability of banks ( … ) to absorb possible shocks on credit and market risks, including sovereign risks.”
Wednesday, July 28, 2010
Investors Beware of Municipal Bonds as Defaults Soar / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes: Of the speculative excesses that misguided monetary policy and a prolonged recession has caused, the one that poses the most danger to investor wealth is the financial bubble in state and local municipal bonds.
Municipal bonds - usually referred to as "munis" - are very popular portfolio plays because of tax advantages that, in effect, enhance their rates of return. There's also an allure because of their local nature: Investors can invest in specific bond issues that provided the money for projects such as schools, highways, bridges, hospitals or housing that actually affects the community in which the investor lives. That makes them a very tangible investment.
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Tuesday, July 27, 2010
The Unlimited Power of Suppressing the Interest Rate / Interest-Rates / Economic Theory
By: Thorsten_Polleit
Under today's fiat-money regimes, central banks, as a rule, control short-term interest rates. They do so by setting the interest rates on short-term loans extended to commercial banks (typically with maturities of one day, one week, two weeks, or one month).
Tuesday, July 27, 2010
Should the Fed Pump Even More Money? / Interest-Rates / Quantitative Easing
By: Frank_Shostak
Some Fed officials and various commentators, such as Professor Paul Krugman, are of the view that the US central bank should be ready to consider additional steps to boost the US economy in the wake of a visible softening in key economic data. For instance, the yearly rate of growth of retail sales, after climbing to 8.5% in March, have fallen to 4.8% in June. The ISM manufacturing purchasing manager's index (PMI) fell to 56.2 last month from 59.7 in May.
Tuesday, July 27, 2010
Will China Grab the Credit-Rating Business? / Interest-Rates / Credit Crisis 2010
By: Money_Morning
Martin Hutchinson writes:
There's a new name in the credit-rating-agency business these days: It's Dagong Global Credit Rating Co. Ltd., and this Beijing-backed business is China's bid for a spot in the global-credit-rating oligopoly.
And Dagong's Chairman Guan Jianzhong doesn't think much of his long-established U.S. competitors.
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Tuesday, July 27, 2010
Confirmed: U.S. Fiscal Woe Is Worse Than Greece / Interest-Rates / US Debt
By: Dian_L_Chu
Reading the annual Long Term Budget Outlook by the Congressional Budget Office (CBO) has become an increasingly depressing experience in recent years. This year seems even more so than ever.
The latest projection puts the federal debt rising to 62% of the nation’s Gross Domestic Product (GDP) by the end of the year (from 40% pre-crisis), the highest percentage since just after World War. (See Graph)
Monday, July 26, 2010
Money Supply Divergence TMS1 vs. TMS2 vs. M2, What does it Mean? / Interest-Rates / Deflation
By: Mike_Shedlock
Inquiring minds are once again digging deep into money supply questions. They are intrigued by the fact that money supply measures M2 and TMS1 are plunging towards zero, while TMS2 is still sporting a hefty 10+% year-over-year growth.
TMS stands for "True Money Supply". The suffix (1 or 2) stands for alternate measures, one including savings accounts and the other not. M2 is a widely used Fed aggregate for money.
Sunday, July 25, 2010
Surging Stock Markets Push Bond Yields Higher / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was off slightly last week as a surging stock market knocked yields 3-6 basis points higher for the week. The bond futures traded up to new 18 month highs on Wednesday before settling back a couple of points during the last two trading sessions before the weekend. While stocks and commodities finished a positive week, the bond market continues to scream double dip and deflation. With the 2 year yield just a snick north of one half percent the bond market is starting to tell us that the Fed is increasingly likely to stick with its Zero Interest Rate Policy for the foreseeable future. Until the next wave of credit concerns hits the market, bonds will continue to have a positive fundamental backdrop.
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Sunday, July 25, 2010
U.S. is Insolvent and Faces Bankruptcy as a Pure Debtor Nation / Interest-Rates / US Debt
By: Washingtons_Blog
China Calls Our Bluff: America's biggest creditor - China - has called our bluff.
As the Financial Times notes, the head of China's biggest credit rating agency has said America is insolvent and that U.S. credit ratings are a joke:
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Saturday, July 24, 2010
U.S. Need Not Fear Sovereign Debt Crisis, Unlike Greece, It Actually Is Sovereign / Interest-Rates / Global Debt Crisis
By: Ellen_Brown
Last week, a Chinese rating agency downgraded U.S. debt from triple A and number one globally, to “double A with a negative outlook” and only thirteenth worldwide. The downgrade renewed fears that the sovereign debt crisis that began in Greece will soon reach America. That is the concern, but the U.S. is distinguished from Greece in that its debt is denominated in its own currency, over which it has sovereign control. The government can simply print the money it needs, or borrow it from a central bank that prints it. We should not let deficit hawks and short sellers dissuade the government from pursuing that obvious expedient.
Friday, July 23, 2010
European Bank Stress Test Politicians Desperate to hide the Truth of Insolvent Banking System / Interest-Rates / Credit Crisis 2010
By: Nadeem_Walayat
The long waited stress test of the 91 of Europe's largest Banks resulted in just 7 of the smaller regional banks failing the test including one from Germany and Greece, and five in Spain, that require capital injections of just Euros 3.5 billion, which is a drop in the ocean when compared against PIGS sovereign debt of Euros 1.2 trillion, but off course the so called stress test FAILED to test for sovereign debt default.
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Friday, July 23, 2010
Credit Deflation Lands in Britain / Interest-Rates / Deflation
By: Adrian_Ash
Credit deflation just hit the UK for the first time on post-war records...
HMMMM...This looks telling.
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