Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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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Tuesday, September 18, 2007
How What the Fed Does, Doesn't Matter - The Apposite Economy / Interest-Rates / US Economy
By: Paul_Petillo
President Bush we now know is “Damn Certain”. Alan Greenspan, retired Fed Chairman now turned economic rabblerouser released his new memoir on Monday that could have been subtitled “Damn Certain too”. Ben Bernanke, the current Fed chairman and according to the two previously mentioned gentleman is doing a fine job, possibly a heckuva one, will no doubt publish his account one day of what is happening to the economy with a subtitle, “Damn Certain As Well”. These are, it seems, the only three people in America certain of anything and if that is the case, we are in more serious trouble than previously thought.Read full article... Read full article...
Monday, September 17, 2007
Net Commericials and the FOMC Interest Rate Meeting / Interest-Rates / US Interest Rates
By: James_West
Everybody is anticipating next week's FOMC decision on federal funds target rate, due this Tuesday, Sept. 18. As of last Friday, according to the 30-day Federal Funds futures, there is a 42% probability of a 25-basis point rate decrease versus a 58% probability of a 50-basis point rate decrease. In other words, a rate-cut is priced into the market already. The only question is: will the Fed cut by 25-basis points or 50-basis points. From the Funds futures, we are leaning towards a 50-basis point cut, but only slightly.Read full article... Read full article...
Monday, September 17, 2007
Bernanke's No-Win Interest Rate Decision / Interest-Rates / US Interest Rates
By: Money_and_Markets
Martin Weiss and Mike Larson write: We feel sorry for Ben Bernanke. He didn't create the sputtering, explosion-prone tanker truck he's trying to maneuver.
Nor did he get any training on how to shift gears.
But he's certainly getting plenty of not-so-subtle prods and catcalls from a diverse group of back-seat drivers.
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Monday, September 17, 2007
Bernanke and US Interest Rates - Between A Rock And A Hard Place / Interest-Rates / US Interest Rates
By: Captain_Hook
Bernanke is an academic, and he acts like one, relying on the safety of flawed models all too often. And all too often, it could be argued this is keeping him behind the curve in terms of official measures, looking at backward indicators in setting future policy. Greenspan on the other hand operated more like he came from the school of hard knocks (like a streetwise gangster), where some (neocon types) would argued he had a real feel for what need be done, and was customarily ahead of the curve in official policy measures, or backroom deals for that matter, whatever would get the job done. Read full article... Read full article...
Saturday, September 15, 2007
Tightening Money - US Interest Rate Cut Not a Done Deal / Interest-Rates / US Interest Rates
By: Brian_Bloom
Its one thing for the Central Bank to “liquefy” the commercial banks, it's another for the commercial banks to on-lend their cash.
Right now, the commercial banks are so nervous about what is unknown regarding the depth of the sub-prime mortgage debacle that they are not even lending to each other. That's why the Libor rate (London Interbank Offer Rate) has spiked.
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Friday, September 14, 2007
Interest Rates & Investing - Investing Simplified – Part One / Interest-Rates / Learning to Invest
By: Investmentscore.com
If you were playing a competitive game of chess for a grand prize of a million dollars, would you ask your opponent what strategic move you should take next? No. So why do investors and analysts ridicule and blame the banks for offering poor advice on the future direction of interest rates? If a bank is going to lend you money for their profit, what is their incentive to give advice that is in your best possible interest? Read full article... Read full article...
Thursday, September 13, 2007
Fed Policy on Asset Price Bubbles Inflation and Burst / Interest-Rates / Liquidity Bubble
By: Paul_L_Kasriel
Is Mishkin Mishuga* about Asymmetric Monetary Policy Responses?
In his treatise delivered at the Fed's recent Jackson Hole retreat ( Housing and the Monetary Transmission Mechanism ), Fed Governor Mishkin hues to the Greenspan party line of an asymmetric monetary policy response to asset-price bubbles. That is, monetary policy should not be used to prevent asset-price bubbles, but rather should be used to mitigate the effects on real economic performance from the bursting of the price bubbles.
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Wednesday, September 12, 2007
Rise in Mortgage Interest Rates To Impact UK House Prices / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The ongoing credit crunch continued to bite into the mortgage banking sector as two large UK banks announced a rise in their mortgage interest rates, this despite the Bank of England pumping extra liquidity into the money markets and continuing signs that UK Interest Rates have peaked.
Both the Abbey and Halifax have announced rises in their tracker mortgage interest rates of .2% for new borrowers. Other financial institutions are expected to follow suit with further rises expected later this year and into 2008.
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Wednesday, September 12, 2007
Central Banks Reaction to the Credit Crunch - Fraud and Folly / Interest-Rates / Credit Crunch
By: Adrian_Ash
"...Given how the Fed has reacted to the credit crunch so far, a Nobel Prize for Dr. Bernanke now seems out of the question..."
"IT IS A FRAUD to accept what you cannot repay," said Publilius Syrus way back in the first century BC.
But Syrus was merely a Roman hack...and a freed slave to boot. So what would he know about collateralized loan obligations? No more or less than today's Bank of England , perhaps.
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Tuesday, September 11, 2007
US Heads for Recession as Foreign Investors Rush for the Exit from US Dollar Holdings / Interest-Rates / Credit Crunch
By: Mike_Whitney
"Credit booms do not end in inflation as most people believe. Credit booms ARE inflation that end in deflation. This credit boom is not any different. ” Mike Shedlock , “Mish's Global Economic Trend Analysis”
The days of the dollar as the world's “reserve currency” may be drawing to a close. In August, foreign central banks and governments dumped a whopping 3.8% of their holdings of US debt. Rising unemployment and the ongoing housing slump have triggered fears of a recession sending wary foreign investors running for the exits. China, Japan and Taiwan have been leading the sell off which has caused the steepest decline since 1992.
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Tuesday, September 11, 2007
Would You Rather Have a Interest Rate Cut or a Strong Economy? / Interest-Rates / US Interest Rates
By: Hans_Wagner
Many investors seeking to beat the market are expecting a Federal Funds rate cut on September 18, 2007 as the Fed Funds Futures market is predicting at least a 25 basis point decrease. Also, it is likely that the rate cut has already been factored into the stock market. Recently, instead of focusing on the strength of the economy and the level of inflation, investors have become so enthralled with a rate cut that they are acting irrationally. When there is good economic news the market goes down. On the other hand the market goes up when the news is considered bad for the economy.Read full article... Read full article...
Tuesday, September 11, 2007
Central Banks Panic Buying Toxic Bonds As Credit Crunch Looms / Interest-Rates / Credit Crunch
By: Gerard_Jackson
It appears to be increasingly evident that the recent turmoil in the financial markets was not an aberration. John McFarlane, former ANZ chief executive, noted that 30-day bank bills were rising. Last week the bill rate exceeded 7 per cent as against the cash rate of 6.5 per cent, giving it a premium of 0.5 per cent. It was also reported that the banking system has been importing billions of dollars to cover its exposure. The same thing is apparently happening overseas. Read full article... Read full article...