Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, December 08, 2008
The Great U.S. Treasury Bond Market Trap / Interest-Rates / US Bonds
By: Captain_Hook
One of the more unusual manifestations of the financial meltdown this year has been the dollar spike, that caught a lot of traders by surprise, and was generated in part by a stampede into the percieved safety of short-expiry US Treasuries, which necessitated the purchase of US dollars. This is now arriving at its ultimate conclusion where Treasury yields have been beaten down to zero, which means that in real terms they are negative, resulting in the bizarre situation where investors are now paying the US government for the privilege of lending them money. This is clearly an untenable circumstance that cannot be expected to continue indefinitely, and it has only been occasioned by desperation, as panicked investors have sought safe haven. Read full article... Read full article...
Monday, December 08, 2008
U.S. Treasury Bonds Reach Extreme Overbought State / Interest-Rates / US Bonds
By: Levente_Mady
The bond market not only held the breakout levels from a couple of weeks ago, but continued to power ahead to the lowest yields seen on long term Treasury Bonds in half a century. The US administration, the Treasury and the Federal Reserve along with authorities world wide have been desperately trying all sorts of new programs to foster the flow of credit. Thus far these programs have not seemed to work. It feels like the authorities are just throwing money, programs, bailouts at a wall and hope that something will stick. Read full article... Read full article...
Saturday, December 06, 2008
Low Interest Rates Spell Big Problems / Interest-Rates / US Bonds
By: Peter_Schiff
Government and mainstream economists have erroneously concluded that the key to reversing the financial free fall can be found in stopping the plunge in home prices. (I would offer the corollary that the key to reducing injuries in auto accidents is to suspend the laws of inertia). But to accomplish the improbable task of re-inflating the housing bubble, the government appears ready to announce a coordinated plan to push down mortgage rates to just 4.5%. Of course, this is precisely the wrong solution to the housing crisis, but when it comes to bad ideas our government has been remarkably consistent. Read full article... Read full article...
Friday, December 05, 2008
Bank of England's Money Printing Nuclear Option / Interest-Rates / UK Interest Rates
By: Mark_OByrne
Gold fell nearly 0.6% yesterday on light volume as the dollar was mixed and oil and most commodities fell sharply again. Gold in euros and particularly British pounds rose sharply when interest rates were slashed by the ECB and BoE. Both central banks indicated that more cuts were likely. Gold has given up some of yesterday’s gains but remains firm in British pounds and Euros at £526/oz and €604/oz respectively.Read full article... Read full article...
Friday, December 05, 2008
U.S. Treasury Bonds the Biggest Bubble of All? / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: We've lived through some truly historic bubbles in recent years:
• The dot-com bubble was a doozy …
• The housing bubble was even bigger, and …
Read full article... Read full article...
Friday, December 05, 2008
European Historic Interest Rate Cuts Suggest Dismal Economic Outlook / Interest-Rates / Euro-Zone
By: Victoria_Marklew
The Bank of England (BoE), the European Central Bank (ECB), and Sweden's Riksbank all slashed their policy interest rates Thursday morning, and all cited the same reasons - that demand conditions have deteriorated markedly, and that inflation is likely to undershoot their respective medium-term targets. Even after the drama of this morning's moves, rates are likely to go lower in 2009, particularly in the Euro-zone. Read full article... Read full article...
Thursday, December 04, 2008
ECB Biggest Interest Rate Cut in History Heading for ZIRP / Interest-Rates / Euro-Zone
By: Mike_Shedlock
The race to Global ZIRP took another big step forward today as central bankers around the globe cut rates. Let's take a look at the recent action .Europe's Central Banks Lower Rates to Fight Recession
The European Central Bank delivered a 75 basis-point reduction in its main refinancing rate, the most in its 10-year history, while the Bank of England cut its benchmark rate to 2 percent, the lowest level since 1951. The Swedish and Danish central banks also lowered their key rates.
Read full article... Read full article...
Thursday, December 04, 2008
Central Banks Slash Interest Rates to Prevent Global Depression / Interest-Rates / Economic Depression
By: Mark_OByrne
Gold fell nearly 1.6% yesterday on light volume as the dollar remained firm. Buyers held back waiting on important interest rate decisions in Europe today and the release of U.S. nonfarm payrolls data tomorrow. Gold remains firm in British pounds and Euros at £523/oz and €613/oz.
Nonfarm payrolls are expected to be poor (economists expect US employers slashed nonfarm payrolls by 320000 in November, which would be the sharpest drop in employment since 2001) and this should put pressure on the dollar and equity markets and see gold remain firm.
Read full article... Read full article...
Thursday, December 04, 2008
UK Interest Rates Forecast to Crash to 1% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
Gordon Browns government having abandoned all of the fiscal rules that it once prided itself on religiously following, is now hell bent on kick starting the UK economy in advance of the looming May 2010 general election deadline. The steady as she goes economic policy has been replaced by the panicking 'unprecedented action's' economic policy and in that having rested away control of UK interest setting from the Bank of England in all but name, UK interest rates are now set to be the latest to take a crash course towards an unprecedented level of just 1%.Read full article... Read full article...
Wednesday, December 03, 2008
Central Banks Open the Money Printing Floodgates to fight Deflation / Interest-Rates / Money Supply
By: Gary_Dorsch
In the early 1980's, the Federal Reserve's headlines figures for the M1, M2, and M3 money supply aggregates flashed at the top of trader's radar screens, and jolted US T-bill rates by 50-basis points or bond yields by 30-points within minutes. Inflation was raging at a 10.7% annualized rate, and repeated attempts to cure it had failed. Former Fed chief Paul A. Volcker was doggedly pursuing a radical monetary policy that led to skyrocketing interest rates and two back-to-back recessions. Read full article... Read full article...
Tuesday, December 02, 2008
Search For Stimulus In a Zero Interest Rate Policy World / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Central bankers everywhere are Looking for Tools in a Zero Interest-Rate World .
The Swiss National Bank is becoming the first central bank in Europe to learn what it's like to live in a zero interest-rate world.
Read full article... Read full article...
Tuesday, December 02, 2008
U.S. Fed Monetizing Debt by Printing Money / Interest-Rates / Central Banks
By: Axel_Merk
Deflation won't happen here; at least not if Federal Reserve (Fed) Chairman's Ben Bernanke's plan pans out. Deflation is considered a persistent decline in prices of goods and services; in a speech in 2002 , Bernanke outlined the steps he would take if the U.S. ever faced the threat of deflation. Deflation is suffocating anyone holding debt as the debt burden becomes more difficult to finance with shrinking income; in contrast, inflation bails out those who have a lot of debt. In our assessment, fighting deflation is the Fed's top priority now; the latest minutes from the Fed's Open Market Committee (FOMC) meeting state: Read full article... Read full article...
Tuesday, December 02, 2008
U.S. Treasuries Massive Rally as Helicopter Ben Fires Buyback Bazooka / Interest-Rates / US Bonds
By: Mike_Shedlock
Treasuries staged yet another massive rally today as Helicopter Ben imitates Paulson and pulls out his own bazooka. Inquiring minds are noting that Treasury Yields Drop to Record Lows as Bernanke Cites Buybacks .
Treasuries rose, pushing yields to record lows, as Federal Reserve Chairman Ben S. Bernanke said the central bank may purchase Treasuries and target long-term interest rates to combat the deepening recession.
Read full article... Read full article...
Monday, December 01, 2008
UK Government Urging Banks to Lend / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Complete silliness reigns in the UK as Prime Minister Brown, Chancellor Darling, and BOE Governor Mervyn King Urge Banks To lend .
U.K. house prices dropped to the lowest level in almost three years in November as banks starved the property market of credit, Hometrack Ltd. said.
Read full article... Read full article...
Saturday, November 29, 2008
U.S. Treasury Bull Market Living on Borrowed Time / Interest-Rates / US Bonds
By: Mike_Paulenoff
I must confess that the pattern in the bond market is a bit surprising.
Yield on the 30-year T-bond fell to a low of 3.48% on Friday, which helped
to propel the Lehman 20+ Year T-Bond (AMEX: TLT) to a new high of 106.30.
Who exactly feels comfortable buying a 30-year piece of paper at less than
3.50% is a mystery in general, but specifically at THIS time, after all of
the stimulus and rescue plans, the incredible 24/7 use of the printing
presses, and during a period when equities are staging an impressive rally
(so far).
Read full article... Read full article...
Friday, November 28, 2008
Gold and UK interest Rates as Proxy for Global Price of Money / Interest-Rates / UK Interest Rates
By: Adrian_Ash
"...The nine decades of gold simply need not apply. Because there's just too much money chasing too many votes to make such a limiting system appeal..."
CENTRAL BANKING used to be easy, back when there was so little to do. You raised interest rates to attract an inflow of gold, supporting your currency on the foreign exchanges and restraining new credit at home. Or you cut interest rates to deter savers, and give the economy a shot of cheap money.
Read full article... Read full article...
Friday, November 28, 2008
Credit Crisis Watch- LIBOR Eases Whilst UK Spread Soars on Sovereign Debt Risks / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
For the world's financial system to start functioning normally again, it is imperative that confidence in the credit markets be restored. In order to gauge the progress being made to unclog credit markets, I regularly monitor a range of financial sector spreads and other measures. By perusing these one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect. Read full article... Read full article...
Tuesday, November 25, 2008
LIBOR Still at Credit Crisis Extremes as Banks Refusing to Lend / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The London Interbank Offered Rate (LIBOR) continues to fall from credit quake extremes, today falling to below 100 basis points (3 month) above the base interest rate that was cut in a panic move to 3% earlier this month. However as the below graph illustrates a 1% spread is still uncomfortably near credit crisis extremes and therefore implies that the banks are still reluctant to lend to one another which was confirmed by the Bank of England Governor Mervyn King who stated that extreme measures may be necessary to force the banks to lend again which in the final analysis implies nationalisation of the whole of british retail banking sector. Read full article... Read full article...
Monday, November 24, 2008
Bond Yields Breakout to New Multi-year Lows / Interest-Rates / US Bonds
By: Levente_Mady
The bond market convincingly broke out to new multi decade lows on yields. As the dismal economic data just continues to get worse, Treasury securities ironically remain the safe haven of last resort. Once the Quarterly Treasury auctions were out of the way, traders got the green light to boldly take the US Long Bond Futures to levels where no Long Bond contract has gone before! Risk remains the dirtiest of all dirty four letter words, so government bonds are the best place to hide. Read full article... Read full article...
Sunday, November 23, 2008
Credit Crisis Persists as Bond Spreads Widen / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
Reuters: Financials need at least $1 trillion - analyst
“The US financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said.
“Eight financial companies - Citigroup, Morgan Stanley, Goldman Sachs Group, Wells Fargo, JPMorgan Chase, AIG, Bank of America Corp and GE Financial - are in greatest need of capital, he said.
Read full article... Read full article...