Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, April 07, 2009
Corporate Bond Default Rate Highest Since Great Depression / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
Moodys says Default Rate Surges to Highest Since Depression .Thirty-five companies defaulted in March, the highest number in a single month since the Great Depression, according to Moody's Investors Service.
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Monday, April 06, 2009
Fed's Flawed Strategy of Buying Long Dated Treasuries to Force Rates Lower / Interest-Rates / US Bonds
By: Mike_Shedlock
Bernanke thinks he can manipulate treasury yields by purchasing long dated treasuries. He can't. The market is simply too big. Please consider Treasurys slide after Fed purchases .Read full article... Read full article...
Saturday, April 04, 2009
Debt is a drug...Danger of Overdose? / Interest-Rates / US Debt
By: Andrew_Butter
Kids are diff-erent today, I hear evry mother say...but there's a little yellow pill...Doctor please, some more of these...outside the door, she took four more. (Rolling Stones: Mother's Little Helper).
The problem with drugs is you develop a tolerance to the thrill part, without necessarily developing a tolerance to the addictive part.
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Wednesday, April 01, 2009
U.S. Debtor Meets G20 Creditors at the Dollar's Funeral / Interest-Rates / US Debt
By: Jim_Willie_CB
An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, US Dollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.Read full article... Read full article...
Wednesday, April 01, 2009
Commercial Real Estate Market in Limbo as Lenders Ignore Defaults / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
There is a new twist in commercial real estate action today. Lenders are ignoring defaults of $billions on commercial real estate as if nothing happened, praying that credit conditions will improve. Read full article... Read full article...
Tuesday, March 31, 2009
Bank Losses Spreading as Interest Rate Derivatives Start Imploding / Interest-Rates / Credit Crisis 2009
By: Money_and_Markets
Martin Weiss writes:For the first time in history, U.S. banks have suffered large, ominous losses in a giant sector that, until now, they thought was solid: bets on interest rates.
In a moment, I'll explain what this means for your savings and your stocks.
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Tuesday, March 31, 2009
Current Financial Crisis Russia Debt Default Risk Lower than 1998 / Interest-Rates / Credit Crisis 2009
By: Pravda
The current economic crisis will be a lot harder than the financial collapse of 1998, a recent report from the World Bank said. WB experts believe that Russia will have to deal with severe problems as a result of the crisis. The economic growth in the country will decline considerably and the recovery will take a much longer time in comparison with the critical period of 1998, when Russia declared default.Read full article... Read full article...
Monday, March 30, 2009
The Thinking Behind the Stimulus and Bailout Programs / Interest-Rates / Economic Stimulus
By: John_Mauldin
It is important to understand the thinking of those who are in fact making the decisions at the Fed and Treasury. In today's Outside the Box, Paul McCulley, Managing Director at PIMCO, gives us some insight into the thinking that is driving the massive stimulus and bailout programs. Whether or not you agree, it is important to have a handle on what is actually happening and the thinking behind it.Read full article... Read full article...
Saturday, March 28, 2009
The SEVEN "Values" of Toxic Assets FAQ / Interest-Rates / Credit Crisis 2009
By: Andrew_Butter
The Hiesenburg Uncertainty Principle says the more you know about the weight of something the less you know about how fast it's moving. A toxic asset follows the same principle, which is presumably why investment banks used to hire rocket scientists. Read full article... Read full article...
Saturday, March 28, 2009
Do Bonds Beat Stocks Over the Long Run? / Interest-Rates / US Bonds
By: John_Mauldin
Why Bother With Bonds?
So Then, Bonds for the Long Run?
P/E Ratios at 200? Really?
Mark-to-Market Slip Slides Away
Housing Sales Improve? Not Hardly
Investors, we are told, demand a risk premium for investing in stocks rather than bonds. Without that extra return, why invest in risky stocks if you can get guaranteed returns in bonds? This week we look at a brilliantly done paper examining whether or not investors have gotten better returns from stocks over the really long run and not just the last ten years, when stocks have wandered in the wilderness. This will not sit well with the buy and hope crowd, but the data is what the data is. Then we look at how bulls are spinning bad news into good and, if we have time, look at how you should analyze GDP numbers. Are we really down 6%? (Short answer: no.) It should make for a very interesting letter.
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Saturday, March 28, 2009
How the Free Market Mortgage Bond Scam Works / Interest-Rates / Credit Crisis Bailouts
By: Submissions
Michael Hudson writes: Newspaper reports seem surprised at how high banks are bidding for the junk mortgages that Treasury Secretary Geithner is now bidding for, having mobilized the FDIC and Fed to transfer yet more public funds to the banks. Bank stocks are soaring – thereby bidding up the Dow Jones Industrial Average, as if the “financial industry” really were part of the industrial economy. Read full article... Read full article...
Friday, March 27, 2009
U.S. Treasury Bonds Heading for Day of Reckoning / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: The U.K. Treasury held a bond auction on Wednesday morning. On the offer were 1.75 billion pounds ($2.55 billion ) worth of 40-year “Gilts” — the U.K. equivalent of U.S. Treasuries. There was just one problem …
Buyers went on strike! They offered to purchase just 1.63 billion pounds ($2.37 billion) of debt.
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Thursday, March 26, 2009
Quantitative Easing Begins; "Operation Twist" Revisited / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
Quantitative easing in the US has begun. The Fed Buys $7.5 Billion of Debt to Cut Borrowing Costs . The Federal Reserve bought $7.5 billion of Treasuries in the first outright purchase of U.S. government debt by the central bank to keep consumer borrowing costs low since the 1960s. It is the first step in a six-month program to buy up to $300 billion in Treasuries.
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Wednesday, March 25, 2009
U.S. Treasury Bond Yields: Government Intervention Breeds Uncertainty / Interest-Rates / US Bonds
By: Guy_Lerner
For many months, I have been tracking US Government 10 year Treasury bonds essentially stating that they have topped out. In my most recent article on Treasury bonds, I stated: "the upside for Treasury bonds is limited, and there is a high degree of certainty that a new secular trend is developing that favors higher yield pressures. " Read full article... Read full article...
Wednesday, March 25, 2009
How China Will Deal with the Growing U.S. Debt Mountain / Interest-Rates / US Bonds
By: Money_Morning
William Patalon III writes: Although there's a veritable laundry list of obstacles that could blunt the U.S. government's ongoing economic turnaround efforts, its single-biggest challenge may come from its single-biggest creditor - China.
When China announced a new array of stimulus measures earlier this month , this very important plan was overshadowed by China Premier Wen Jiabao's concerns about the United States' quickly growing debt load.
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Tuesday, March 24, 2009
Fed Debt Monetization- Creating Credit Out of Thin Air / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
Last week the Fed announced that it would purchase $300 billion of longer-maturity Treasury securities. The mainstream media got all excited, talking about the Fed "printing money." But the Fed figuratively "prints money" or creates credit whenever it acquires assets - loans or investments. For example, when the Fed purchases a mortgage-backed security, it pays for the security simply by crediting the deposit (reserve) account of the security seller's bank. Read full article... Read full article...
Monday, March 23, 2009
U.S. Treasury Bond Market Jolted by Panic Mode Quantitative Easing / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was jolted up by the “surprise” (not entirely for the readers of this column) announcement that the Fed will be buying not only additional boatloads of Mortgage Backed Securities and Agency bonds, but also up to $300 Billion Treasury paper during the next 6 months in order to keep a lid on interest rates for the foreseeable future. As previously discussed, the Fed has already taken the Fed Funds Rate down to zero, so they are “all in” on that front. Now they opened a new kettle of fish by joining the Bank of England and the Bank of Japan in what is called Quantitative Easing – i.e. purchasing Treasury bonds in the Fed's case. Read full article... Read full article...
Sunday, March 22, 2009
Fed illusion as Rising U.S. Bond Prices Cancelled Out by Plunging Dollar / Interest-Rates / US Bonds
By: Clive_Maund
Last week a very dangerous precedent was set when the Fed announced that it is going to start overtly intervening to backstop the ailing Treasury market. The market's verdict on this announcement was immediate and unequivocal. While Treasuries rallied sharply as one might expect, the dollar cratered and gold staged a dramatic turnaround to close sharply higher. The reason that this precedent is so dangerous is that once they start monetising this debt, which means creating money to buy that portion of newly created Treasury debt that cannot be sold off, there will be no end to it - they will eventually find themselves buying more and more of it, as foreign buyers continue to withdraw, deterred by a combination of pitifully low yields and any prospective capital gain being wiped out by the continued decline in the dollar that must transpire as a result of diluting the currency by creating money to absorb unsold Treasury paper. Read full article... Read full article...
Sunday, March 22, 2009
U.S. Treasury Bond Yields Reach the Bottom, Upward Pressure Starts / Interest-Rates / US Bonds
By: Donald_W_Dony
The Fed has done everything possible to stimulate the economy by slashed interest rates to record lows, injecting billions of dollars into the financial system and even recently saying it will begin a program to buy up to $300 billion in government treasuries. All of these efforts have driven bond yields down to record lows. Models are now indicating that yields are on the rise.Read full article... Read full article...
Sunday, March 22, 2009
Fed Hits Panic Button and Signals Trillions of Dollars Will be Printed to Buy Bonds / Interest-Rates / Quantitative Easing
By: Prieur_du_Plessis
Phew - what a week! What an announcement!
The Federal Open Market Committee (FOMC) on Wednesday left the Fed funds range unchanged at zero to 0.25%, but stunned the financial markets with an announcement that it would purchase up to $300 billion in longer-term Treasuries over the next six months.
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