Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, October 21, 2007
The Shadow Banking System Rescuing the SIV Garbage / Interest-Rates / Credit Crunch
By: John_Mauldin
In this issue:
Taking Out the SIV Garbage
The Rhinebridge to Nowhere
The $100 Billion Superfund to the Rescue?
Don't Ask, Don't Sell
The Shadow Banking System
New Orleans, Houston and Old Friends
This week was not pretty for stocks. It all started off with the announcement of a special 80-100 billion dollar fund orchestrated by the US Treasury to bail out something called an SIV. Then Caterpillar gave negative guidance this morning, especially on its US business and the selling began in earnest. October 19 is still not a friendly day to the stock market 20 years later. But it was a great week for bonds. One-month treasury bills dropped 60 basis points in one day in a real flight to short-term quality, and the entire yield curve moved down substantially.
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Saturday, October 20, 2007
Asset Class Behavior Following Fed Interest Rate Cuts - Part 2 of 4 / Interest-Rates / US Interest Rates
By: Chris_Ciovacco
"The dollar has been sliding since the Fed last week cut interest rates by a larger-than-expected half percentage point. Since then, disappointing U.S. economic data have stoked expectations that another rate cut is on the way. Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.As the dollar sinks, consumers find imported products— Australian wines, Japanese cars or Chinese toys — are more expensive. "- Associated Press -09/28/2007 Read full article... Read full article...
Friday, October 19, 2007
Who Bought the US Treasury Bonds ? / Interest-Rates / US Bonds
By: Rob_Kirby
According to the U.S. Treasury – the latest TIC data [August] tells us the following:
Treasury International Capital (TIC) Data for August
Treasury International Capital (TIC) data for August are released today and posted on the U.S. Treasury web site ( www.treas.gov/tic ). The next release, which will report on data for September, is scheduled for November 16, 2007.
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Thursday, October 04, 2007
Central Banks Inflation Quandary As Gold Prices in More US Interest Rate Cuts / Interest-Rates / Inflation
By: Christopher_Laird
When the Fed cut the discount and target rates by .5% they tied the hands of some other central banks who have been wanting to raise rates. From China, to the Middle East, to the EU and then Japan, each has reacted in its own way as they find they have to take into serious consideration what the Fed does. Read full article... Read full article...
Tuesday, October 02, 2007
US Interest Rates Headed For 3.75% Over the Next 12 months / Interest-Rates / US Interest Rates
By: John_Mauldin
We are in a world far different than the one I learned about in economic text books. As I have written, the shadow banking system of hedge funds and CDOs, CLOs, PIPES, etc. have created a new financing economic reality far different than the traditional banking system was just 20 years ago. Does the Fed have the tools in its toolkit to deal with the new reality? Read full article... Read full article...
Monday, October 01, 2007
NOLTE NOTES Was the Fed Too Hasty to Cut Interest Rates ? / Interest-Rates / US Interest Rates
By: Paul_J_Nolte
What a quarter – from the heights to the depths and back again, the quarter ended with the SP500 up a modest 1.5%, barely above the rate earned on bonds with a lot less gray hairs. Yields fell during the quarter, with short rates falling a full percentage point, while long-term bonds dropped a quarter percent. The news last quarter has been splashed all over the media – from liquidity crisis to real estate blues to just maybe a recession. But the money management business is never about what was done yesterday – what are y'all doing for me lately?Read full article... Read full article...
Monday, October 01, 2007
Central Banks, Interest Rates and Stock Market Fluctuations / Interest-Rates / Credit Crunch
By: Gerard_Jackson
The shortage of capital at the end of the boom period is a sign that the credit system has put its last reserves into the firing lines in order to support the wavering front. (Wilhem Röpke Crises and Cycles , William Hodge and Company Limited, 1936, p. 100)Read full article... Read full article...
Monday, October 01, 2007
Why the Fed's US Interest Rates Policy Will Fail / Interest-Rates / US Interest Rates
By: Gerard_Jackson
It was only it was last August that I told readers not to be surprised if the fed cuts the funds rate. (US financial markets rocked — what is really happening ). Lo and behold, on September 18 the fed cut by 50 bps, reducing the funds rate to 4.75 per cent. The cut immediately ignited share prices, with the Dow Jones industrial average surging by 335 points. The only surprising thing is that anyone was actually surprised. That the first effect of a credit expansion is usually felt on the stock market seems to have eluded the commentariat 1 .Read full article... Read full article...
Monday, October 01, 2007
UK Interest Rates Expected to be Kept on Hold at October MPC Meeting as House Prices Flat line / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England is expected to keep UK interest rates on hold at 5.75% at Thursdays MPC Meeting. Confirming forecasts that UK Interest rates have now peaked.Read full article... Read full article...
Thursday, September 27, 2007
The Concept of Risk has Been Forgotten - Buffett's Dictum & Your Margin of Safety / Interest-Rates / Risk Analysis
By: Adrian_Ash
"...Risk has been abolished – a concept even the TV news anchors can grasp..."
"IF YOU UNDERSTOOD a business perfectly and the future of the business, you would need very little in the way of a margin of safety," said Warren Buffett at Berkshire Hathaway's annual meeting in 1997.
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Tuesday, September 25, 2007
The Federal Reserve's Interest Rate Cut Does Not Help Americans / Interest-Rates / US Interest Rates
By: Axel_Merk
In our assessment, the Federal Reserve's (Fed's) interest rate cut was wrong. Forget about the “moral hazard” of whether the cut would plant the seeds for further bubbles. Lowering interest rates is wrong because it will do few any good, but cause many a lot of harm.Read full article... Read full article...
Monday, September 24, 2007
NOLTE NOTES The Halo Effect Continues from the US Interest Rate Cut / Interest-Rates / US Economy
By: Paul_J_Nolte
The Fed surprised many in the markets and cut rates half of one percent (50bp) and the equity markets cheered to the tune of 400 Dow points. Either the Fed is VERY interested in heading off recession or there is more bad news ahead that they would like to be able to cut off before it built too difficult to overcome. The inflation news was certainly good – enough to provide the additional cover for the Fed to cut by 50bp. The housing numbers reported last week were certainly very poor and combined with a few corporate reports (FedEx and Circuit City) indicating that the consumer remains inthe struggling mode.Read full article... Read full article...
Monday, September 24, 2007
US Bonds Collapsing! Foreigners Abandoning the US Dollar! / Interest-Rates / US Dollar
By: Money_and_Markets
Martin Weiss writes: If you thought the dollar's collapse would not affect you, think again! Here's what's happening:
First, U.S. bond prices are collapsing: In the two days after the Fed's rate cut, the price of the long-term Treasury bond plunged more than two and a half points, including the worst single-day plunge since September of 2003. This means bond yields, which move in the opposite direction, have surged.
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Saturday, September 22, 2007
Did the Fed Interest Rate Cut Fix the Credit Crunch Problem? / Interest-Rates / Credit Crunch
By: Tim_Wood
Or, Are Their Actions a Sign of a Bigger Problem?
I have said before in my newsletters that the Fed's biggest fear is deflation and I believe that the move earlier this week proves that point. As the stock market began to decline in August the Fed began extending the discount window, encouraged banks to come to the discount window, and cut the discount rate. I reported here a couple of weeks ago that based upon the 3-month T-bill rate and my Trend Indicator that we have entered into an environment in which lower short-term rates should prevail. So, the fact that a cut was made came as no surprise. But, the shock was that the Fed cut both the Discount rate and the Fed funds rate by a half point. In my opinion, this was a drastic measure and it serves to show the Fed's true colors and it absolutely confirms that they are scared to death of deflation.
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Friday, September 21, 2007
Feds Interest Rate Cut to Ignite Inflation As Dollar Collapses - The Worst Fed Move in History! / Interest-Rates / Inflation
By: Peter_Schiff
Helicopter Ben Earns His Wings: Coming at a time when rate increases were needed to combat the sinking dollar and surging gold, oil and other commodity prices, Ben Bernanke’s 50 basis point cuts in the Fed funds and discount rates this week may go down as the most irresponsible move in Fed history.Read full article... Read full article...
Wednesday, September 19, 2007
Bank of England Rocked by Banking Crisis, Mervyn King Ponders Resignation After BoE Climb-down / Interest-Rates / UK Banking
By: Adrian_Ash
Political Ravishment! Or, a Tale of Two Bankers "...O you villain! Have I kept my honor so long to have it broke up by you at last...?"
THE OLD LADY'S in danger, and not for the first time. As a political cartoon by James Gillray reminds us each morning, hung by the door here at BullionVault , the Bank of England's virtue came under attack in the late eighteenth century.
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Wednesday, September 19, 2007
Fed's Half-point Cut Sign of Desperation! Next ... / Interest-Rates / US Interest Rates
By: Money_and_Markets
Martin Weiss writes: Yesterday, in our Monday issue of Money and Markets , we told you about the massive and unanimous pressures on Fed Chairman Ben Bernanke to cut interest rates by a half point — the desperate demands of home builders, the panicky screams from mortgage lenders and the wailing cries from Wall Street.Read full article... Read full article...
Tuesday, September 18, 2007
UK Interest Rates Forecast to Fall to 5% by September 2008 / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The most recently released inflation data shows UK CPI Inflation falling to 1.8% and RPI rising to 4.1% for August. Even though the picture is mixed, the slowing UK housing market and economy is expected to result in further moderating of the inflation picture over the next 12 months, which is to result in a fall in UK interest rates to a target of 5% by late 2008.Read full article... Read full article...
Tuesday, September 18, 2007
Can the Fed Save You From the Credit Crunch? and What to do to Protect Yourself / Interest-Rates / Credit Crunch
By: EWI
The Federal Reserve's rate cut is dominating the news, as did recent Fed injections into the market. And the media continues to hold its collective breath each time Bernanke meets or prepares for an announcement.Read full article... Read full article...
Tuesday, September 18, 2007
Fed Cuts US Interest Rates to 4.75%, Dollar plunges, Stocks Soar / Interest-Rates / US Interest Rates
By: Sarah_Jones
The US interest rates were cut by 0.5% to 4.75%. The market was already pricing in expectations for 0.25%.
US Stocks rallied strongly on the news with Dow Jones Index rallying more than 300 points on the news to above 13,700 into the last hour of trading.
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