Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, September 22, 2008
Recommendation to Congress Not to Spread Financial Panic / Interest-Rates / Credit Crisis Bailouts
By: Money_and_Markets
Martin D. Weiss writes: The proposal before Congress for a $700 billion mega-bailout is far too little to repair the damaged debt and derivatives markets ... and, at the same time, far too much for investors and taxpayers who must put up the money.
How big is the problem, really?
In the past, Congress has repeatedly asked us for data and analysis on these issues, and we have provided it in Congressional testimony and white papers. In that same tradition, below is a partial first draft of a white paper we will be submitting on this matter:
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Monday, September 22, 2008
US Treasury Bonds Experience Massive Volatility / Interest-Rates / US Bonds
By: Levente_Mady
Along with the rest of the financial markets, the US Treasury market experienced massive volatility during the past week. The Long Bond future traded up over 5 points before ending the week almost unchanged. The 30 year Treasury bond yield traded below 4%, which is the lowest level in over 40 years. Even more significantly, the US 3 month Treasury Bills yielded less than 0.1% for a couple of days as financial markets threatened to seize up. All of the sudden drawing comparisons – even in the main stream media - with the 1990s Japanese depression and the Great Depression of the 1930s does not seem so far fetched any more. It took us years if not decades to get into this mess, I expect it will take a little longer than 3 to 6 months to get out! Read full article... Read full article...
Sunday, September 21, 2008
Bush Seeks Dictatorship Powers / Interest-Rates / Government Intervention
By: Mike_Shedlock
Bloomberg is reporting Treasury Seeks Authority to Buy Mortgages Unchecked by Courts .
The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.
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Saturday, September 20, 2008
Incompetent Paulson Talks Up Price of Mortgage Backed Securities / Interest-Rates / Credit Crisis 2008
By: Michael_Pento
I hope those who want to sharpen their skills at the art of negotiations are watching Hank Paulson and learning exactly what not to do. Rule number one when entering into a bargaining agreement to purchase an asset is: DO NOT commit to purchasing the asset before negotiating a price. Makes sense, right? Read full article... Read full article...
Saturday, September 20, 2008
Financial Armageddon and the Re-pricing of Collateralized Debt / Interest-Rates / Credit Crisis 2008
By: John_Mauldin
- Pricing in Financial Armageddon
- Inside a RMBS
- Ratings to Collateral to Ratings: A Vicious Cycle
- This Too Shall Pass
My Dad used to tell me there is no accounting for standards when looking at something that seemed odd. Today, we have faulty standards for accounting that are ripping apart the fabric of the world's economy. How can a security that has a high probability of full repayment be downgraded from AA to junk levels?
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Friday, September 19, 2008
US Taxpayer: A Giant Dumpster For Illiquid Assets / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Paulson, Bernanke, and Congress are conspiring to make the US taxpayer the fall guy for financial stupidity by banks and brokers. Congress is now willing to ram through legislation at the last moment, even though Senate Majority Leader Reid Says "No One Knows What to Do" . Read full article... Read full article...
Friday, September 19, 2008
You Own Junk Bonds, Like it or Not / Interest-Rates / US Debt
By: Mike_Stathis
For many years now we've all seen the reckless use of taxpayer funds by Washington . This irresponsible and unaccountable waste of tax dollars has been particularly prominent during President Bush's tenure - from billions going to blow up bridges, roads and buildings in Iraq , only to rebuild them - to the Department of Homeland Security, which is no more than a joke. Meanwhile, America 's own infrastructure is in badly need of repair, with current estimates anywhere between $1.5 to $3 trillion and growing each day. Read full article... Read full article...
Friday, September 19, 2008
Time for Selective Buying of Mortgaged Backed Securities? / Interest-Rates / Credit Crisis 2008
By: Andrew_Butter
What's the difference between a TV rating and a bond rating? Answer: The TV rating is audited.
Putting the incompetence of the rating industry in USA and Nadeem Walayat's expression Tulip Backed Securities to one side, my granny always used to say, "Where there's Muck there's Brass"
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Wednesday, September 17, 2008
Credit Freeze, 3 Month Treasury Yields Effectively Hit Zero, Gold Soars / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
A massive global rally in treasuries is underway and gold may be headed for its biggest one day advance in history as global systemic distrust sets in. Read full article... Read full article...
Wednesday, September 17, 2008
Federal Reserve Holds Interest Rates Defying Wall Street / Interest-Rates / US Interest Rates
By: Money_Morning
Martin Hutchinson writes: The U.S. central bank's Federal Open Market Committee (FOMC) yesterday (Tuesday) left the benchmark Federal Funds rate target at 2.0%, after many had expected the central bank policymaking committee to cut rates in the wake of the Lehman Brothers Holdings Inc. ( LEH ) collapse. Read full article... Read full article...
Monday, September 15, 2008
Pimco, Vanguard Are Biggest Bond Fund Losers in Lehman Collapse / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
It's payback time for betting on moral hazards as Pimco, Vanguard Are Biggest Bond Fund Losers in Lehman Collapse .Pimco Advisors LP, Vanguard Group Inc. and Franklin Advisers Inc. are among the investment companies that will face losses of at least $86 billion stemming from the collapse of Lehman Brothers Holdings Inc., the biggest bankruptcy in history.
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Monday, September 15, 2008
US Treasury Bonds Slide as Financial's Take Turns at Blowing Up / Interest-Rates / US Bonds
By: Levente_Mady
The US Treasury market seems to be running out of steam here in spite of supportive data from economic fundamentals. Canadian long term bonds have kept pace with the trend to lower yields in the US market and seem to be poised for a breather as well.
The cream of the financial crop is relentlessly taking turns at blowing up. Last week it was Fannie and Freddie – the largest mortgage companies in the world, this week it was Lehman Brothers - another one of the largest investment dealers on the planet, next week it looks like it could be AIG – not long ago the largest insurance company around – that might be on the bankruptcy block.
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Friday, September 12, 2008
FOMC US Interest Rate Meeting of September 16th / Interest-Rates / US Interest Rates
By: Joseph_Brusuelas
Nearly ten years ago the Federal Open Market Committee convened a special meeting to address the problems in U.S. financial markets regarding the failure at Long Term Capital Management. It is not without irony that one decade later the Fed and the U.S. Treasury are addressing an infinitely more complex problem with respect to Fannie Mae and Freddie Mac, while at the same time contemplating the potential failure of major investment and commercial banks. Read full article... Read full article...
Thursday, September 11, 2008
Carry Trade Unwinding Hell Continues / Interest-Rates / Yen Carry Trade
By: Mike_Shedlock
The Central Bank of New Zealand Cut Benchmark Lending Rate 50 Basis Points and announced "We have room to move". New Zealand's central bank cut its benchmark interest rate by a half point to 7.5 percent, more than forecast by most economists, saying the economy is in a recession and inflation will slow.
The nation's currency dropped to a 22-month low, and bond yields fell after the decision. "We've got room to move, "Reserve Bank Governor Alan Bollard said in an interview from Wellington today "We're in a loosening mode."
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Thursday, September 11, 2008
Perverse US Dollar Rally Prelude to Financial System Collapse / Interest-Rates / Financial Crash
By: Jim_Willie_CB
More crucial than ever, observers must take the broader perspective that avoids overhearing the party on Wall Street. They know not what they celebrate. It is their demise. They rejoice over the collapse of mortgage bonds and now the mortgage centrifuge with a big fat fanny. They rejoice over collapse of Lehman Brothers. They rejoice over the disaster du jour offered at the financial lunch table. In the past two months, a remarkable sequence of events has taken place regarding US$-based bonds. They have been called home , a demand to be brought back to US shores. Read full article... Read full article...
Wednesday, September 10, 2008
Fannie Mae/ Freddie Mac Takeover to Prevent Bond Market Armageddon / Interest-Rates / Credit Crisis 2008
By: Richard_C_Cook
Fannie Mae and Freddie Mac, the twin giants of the home mortgage industry, own or guarantee assets of $5.3 trillion, almost half of the $12 trillion housing market in the U.S. These assets have been disappearing in value due to the collapse of the housing bubble.
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Tuesday, September 09, 2008
Fannie and Freddie Bailout Destined to Fail as US Debt Doubles / Interest-Rates / Credit Crisis 2008
By: Money_and_Markets
Martin D. Weiss writes: With Sunday's announcement of the most massive federal bailout of all time, it's now official: Fannie Mae and Freddie Mac, the two largest mortgage lenders on Earth, are bankrupt.
Some Washington bigwigs and bureaucrats will inevitably try to spin it. They'll avoid the "b" word with vengeance. They'll push the "c" word (conservatorship) with passion. And in the newspeak of 21st century bailouts, they'll tell you "it all depends on what the definition of solvency is."
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Tuesday, September 09, 2008
Credit Default Swap Dealers the Big Winners from Fannie and Freddie Takeover / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Bloomberg is reporting 1.4 Trillion in Fannie, Freddie Credit-Default Swaps May Be Settled . Investors may be forced to settle contracts protecting more than $1.4 trillion of Fannie Mae and Freddie Mac bonds against default after the U.S. seized control of the companies in a bid to bolster the housing market.
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Monday, September 08, 2008
The Bailout of Fannie Mae and Freddie Mac / Interest-Rates / Credit Crisis 2008
By: Paul_J_Nolte
The official take-over of Fannie Mae and Freddie Mac has begun. Whether this is the beginning of the end or merely the end of the beginning is yet to be determined, however it is certainly the hope that this move will begin to calm the housing market and allow mortgage money to once again flow. The effect of money back into housing should put a floor in the housing markets, but those effects will only likely begin to show up in the data a few months from now.Read full article... Read full article...
Monday, September 08, 2008
US Treasury Bonds Rally Continues as Fannie and Freddie Nationalized / Interest-Rates / US Bonds
By: Levente_Mady
The US Treasury market has been stair-stepping higher since the middle of July. The US Long bond was within a whisker of its annual high on Friday immediately following the weaker than expected employment report. Canadian bonds also rallied in spite of disappointment with latest policy directives from the Bank of Canada.Read full article... Read full article...