Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, September 04, 2007
Analysis of Credit Markets Turmoil - Vectors of Credit / Interest-Rates / Credit Crunch
By: John_Mauldin
The credit markets are in turmoil. This week I have asked Michael Lewitt of Harch Capital in Florida to tell us what is going on from his perspective. Michael has been watching the credit markets from the inside for a long time. So, this week we have a sort of insider's Outside the Box.
Michael is one smart guy with a deep understanding of the markets, especially the credit markets, and how they work. I really look forward each month to getting Michael's insights. The firm manages domestic and offshore debt and equity hedge funds and separate accounts. This may get more technical for some readers, but keep reading, as you can get a sense of what we are really facing.
John Mauldin
Editor, Outside the Box
Friday, August 31, 2007
Gold Prices & Leasing Rates Jump as Bush Moves to Rescue Sub-Prime Housing / Interest-Rates / US Interest Rates
By: Adrian_Ash
Treasury Bond Holders Face Surge in Supply
SPOT GOLD PRICES rose strongly throughout the Asian and early London sessions on Friday, gaining nearly $5 per ounce to reach a new high for the week, as President Bush announced a rescue package for subprime US home buyers.
Effectively offering to nationalize the mortgage market for low- and no-income borrowers, Bush's bail-out plan is likely to force a steep increase in US bond issuance. The "safe haven" of choice for large investment institutions during the turmoil in this month's credit markets, Treasury bonds now risk serious, long-term inflation.
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Tuesday, August 28, 2007
The Ongoing Impact of the US Housing Sector / Interest-Rates / Credit Crunch
By: John_Mauldin
Who should we blame for the problems in the credit markets? This week in Outside the Box my good friend Barry Ritholtz takes on the task of pointing his prodigious finger at the guilty parties. As he notes, there is plenty of guilt to go around. This is a problem that is going to stay with us more than a few weeks. As I wrote last week, it is not a problem of liquidity. It is a problem of credibility. Until investors of all types feel safe getting back into the structured finance market water, US mortgages and all sorts of consumer finance are going to be severely hobbled. There is plenty of money on the sidelines, but it is going to take some work to make investors feel comfortable. Read full article... Read full article...
Monday, August 27, 2007
US Fed - A "Slow Motion Train Wreck" / Interest-Rates / Global Financial System
By: Stephen_Lendman
These days, financial/market punditry seems to follow two opposite lines of thinking. It ranges from the predominant view that world economies are growing and sound, problems in them minor and fixable, and current volatility (aka turmoil) is corrective, normal and a healthy reassessing and repricing of risk. Contrarians, on the other hand, believe the sky is falling. Most often, extreme views like these turn out wrong and are best avoided. Things are never that simple and hindsight usually proves only Cassandra was good at forecasting although calling market tops and bottoms wasn't her specialty. Read full article... Read full article...
Friday, August 24, 2007
US Fed - Write Some Checks! Bail 'Em Out! / Interest-Rates / US Interest Rates
By: Adrian_Ash
"There are more tears shed over answered prayers than over unanswered prayers..." - Teresa of Ávila, patron saint of headache sufferers
BE CAREFUL what you wish for. The entire US Treasury market is betting the Fed will cut rates in September. Goldman Sachs expects rates to finish the year at 4.5%, fully 75-points lower from here.
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Friday, August 24, 2007
More Upside for US Treasuries / Interest-Rates / US Bonds
By: Mike_Paulenoff
The Lehman 20-year Treasury Bond ETF (AMEX: TLT) continues to grind to new 4-month highs….See our recent daily chart, in which we note that our near and intermediate-term work continue to "warn" us to expect another surge in the TLT that thrusts prices towards 89, which appears to be gaining upside strength as we speak. The weakness in the equity indices hardly can be considered acute, yet the long end of the yield curve is ratching down (lower rates) to reflect expectations of…what?
An economic slowdown?
Thursday, August 23, 2007
Desperate Measures For US Fed As Treasury Yields Scream for a Interest Rate Cut / Interest-Rates / US Interest Rates
By: Jim_Willie_CB
The US financial system is experiencing a combination of a heart attack (fibrillation from absent trade recycled surpluses), a massive hairball (subprime debt securities) working through the bank arteries, and a realization (like Wiley Coyote in cartoons) that no terra firma lies beneath the economic feet as the depths below are vividly apparent. Massive money printing constitutes a heart attack, now a crescendo since the Constitutional violation on gold backed currency. The mortgage bonds simply cannot work through the banking system, with hairballs leading to constipation and unspeakable intra-bank distrust. For ten years the USEconomy has relied upon rising stocks or rising home properties to sustain an entire economy, from a structural foundation of inflating assets. For any central bankers or leading economists working as policy maker counselors, this is a purely heretical strategy. Read full article... Read full article...
Wednesday, August 22, 2007
Fed President Lacker Resists Talk of Fed Funds Rate Cut as US Economy Flirts With Recession / Interest-Rates / US Interest Rates
By: Paul_L_Kasriel
Richmond Fed President Lacker is the first Fed official to speak publicly about the recent discount rate cut, liquidity issues and the prospects for FOMC federal funds rate policy. I would assume that his comments were cleared by Fed Chairman Bernanke before being delivered to us. Lacker could have saved his breath about discount policy and liquidity challenges. What enquiring minds really want to know is whether the FOMC intends to cut its federal funds rate target at or before its September 18 meeting.Read full article... Read full article...
Tuesday, August 21, 2007
Black Monday for Bond Yields / Interest-Rates / US Interest Rates
By: Adrian_Ash
"...Monday this week marked the biggest move in Treasury bond yields since Black Monday in Oct. 1987 destroyed more than one-fifth of the US stock market's value..."
REMEMBER HOW INFLATION was the investment world's biggest single worry back in...oh...back in June?
Anyone snapping up 10-year US Treasury bonds back then is now looking clever. Very. Ten weeks ago, the 10-year yield touched a half-decade high of 5.32%. On Monday night in New York it closed below 4.65%.
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Tuesday, August 21, 2007
Why The Fed's Interest Rate Cut Did Not Come As A Surprise / Interest-Rates / US Interest Rates
By: John_Mauldin
This week's Outside the Box is from good friend and South African partner Dr. Prieur du Plessis of Plexus Asset Management. Prieur suggests that we should not be surprised at last week's rate cut, as it is consistent with past rate cut cycles when viewed from the fact that banks are tightening up on their lending standards to both consumer and commercial borrowers. There are a number of very original graphs here with some very interesting analysis that is truly Outside the Box. John Mauldin, Editor
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Monday, August 20, 2007
High Risk Credit / Interest-Rates / US Debt
By: Dr_Ron_Paul
As markets went on a rollercoaster ride last week, our economy is coming close to a day of reckoning for loose credit policies being followed by the Federal Reserve Bank. Simply, foreign banks we have been relying on to buy our debt are waking up to the reality of much higher default rates than predicted, and many mortgage backed securities have been reduced to "junk" ratings. Wall Street fears the possibility of tightening credit and the tightening of America's belts. Why, they say, "if Americans spend only what they can afford, think of the ripple effects throughout the economy!" This is the cry, as the call comes for the fed to cut rates and bail out companies in trouble.Read full article... Read full article...
Monday, August 20, 2007
The Reserve Bank of Australia gets it Wrong on Financial Markets / Interest-Rates / Global Financial System
By: Gerard_Jackson
Last week the Reserve Bank of Australia raised interest rates. Glenn Stevens, the Reserve's governor, told the house of representatives standing committee on economics, finance and public administration that he did not regret the decision. He said: “It has been a little bit difficult to read what the current trend in inflation is over recent quarters”. Let me see if I can help out here. Inflation, Mr Stevens, is a monetary expansion.Read full article... Read full article...
Monday, August 20, 2007
Lower US Interest Rates from the Fed are Not Likely / Interest-Rates / US Interest Rates
By: Hans_Wagner
Everyone seeking to beat the market from James Cramer to Wall Street big wigs are crying out for the U.S. Federal Reserve to lower the Fed Funds rate, the rate banks can borrow from each other. They believe that it will save the markets and help the firms recover from the mis-pricing of so many mortgage loans. However the Fed is not likely to lower rates in the near terms since inflation still looms on the horizon. After all fighting inflation is one of the primary missions of the Fed. Read full article... Read full article...
Monday, August 20, 2007
US Interest Rate Cut - Bernanke Blinks First / Interest-Rates / Credit Crunch
By: Andy_Sutton
Occasionally, on dark, secluded back streets, adolescents and other not so tightly wrapped folks engage in a classic American rite of passage known as 'Chicken'. The idea behind the game is for two cars to drive directly towards each other at a high rate of speed and see who swerves first. That person is dubbed the chicken. Obviously, it is easy to envision what happens if neither driver blinks.
For approximately the past two weeks financial commentators and observers have been watching a variant of this classic game. The markets, roiled in certainly the biggest blow-off since the end of the tech bubble, and perhaps of all time were screaming madly for the Fed to step in and open the discount window. CNBC host and industry shill Jim Cramer almost brought on a stroke screaming that Bernanke "doesn't know how bad it is out there!" On the other side was the Fed, stalwart, poised and resolute. Something had to give...
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Sunday, August 19, 2007
Prime Interest Rates and the Market Value of Gold / Interest-Rates / US Interest Rates
By: Greg_Silberman
Before the Feds Emergency rate cut on Friday the bias was to higher rates across the board. For example the Australian Reserve Bank increased prime interest rates by 0.25% and even now after the stock market pummeling, continues to warn of more to come. This article explains why interest rates are about to go higher at exactly the WORST possible time.The question foremost on investors minds is whether a turbulent stock market warrants halting interest rate increases or, in the case of the US, decreasing rates to resuscitate the Real Estate and credit markets.
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Friday, August 17, 2007
US Interest Rate Cut - Relief is Spelt B-E-N / Interest-Rates / US Interest Rates
By: Brady_Willett
Yen carry is blowing up, global stock prices are in mini-crash mode, and the financial meltdown is threatening to spark an economic meltdown. Having gingerly danced with rhetoric and liquidity injections in recent days, the Fed started to boogie this morning. Here is the statement in its entirety:Read full article... Read full article...
Thursday, August 16, 2007
Effective Fed Funds Rate Cut to 4.75% - Well, bless Poole's Beautiful Hide! / Interest-Rates / US Interest Rates
By: Adrian_Ash
ONLY A "CALAMITY" would justify an interest-rate cut now, says St. Louis Federal Reserve chief William Poole.
In which case, he either liquidated his personal stock investments before June...or the guy's got some real hide.
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Wednesday, August 15, 2007
Ben, If You're Going to Cut US Interest Rates... / Interest-Rates / US Interest Rates
By: Tim_Iacono
Federal Reserve Chairman Ben Bernanke pays pretty close attention to the inflation statistics, so he's probably already figured out that if he's going to cut short-term rates this year, he ought to do it in the next two months.
Just in case he hasn't figured it out already, maybe this explanation will assist in what will likely be a difficult decision-making process.
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Wednesday, August 15, 2007
GOLD THOUGHTS - Federal Reserves Flawed Monetary Policy / Interest-Rates / Inflation
By: Ned_W_Schmidt
Complete and total intellectual bankruptcy of Federal Reserve was confirmed this past week. Creation and collapse of two financial bubbles in eight years would seem to suggest monetary philosophy of Federal Reserve is fatally flawed. Core rate of inflation as a tool for managing monetary policy should be declared dead, and buried in history books of foolish thinking.Read full article... Read full article...
Tuesday, August 14, 2007
Bernanke Grounded-- for Now / Interest-Rates / Credit Crunch
By: Michael_Pento
The head of the Federal Reserve has so far not lived up to his moniker of “Helicopter Ben.” Unlike what his label suggests, Mr. Bernanke has only addressed the current liquidity crisis with system repurchases—which add temporary cash into the system—instead of coupon passes, which are a more permanent infusion of cash. By leaving the Fed Funds target rate at 5.25%, he has differentiated himself from Alan Greenspan, whose playbook response to a crisis was to devalue the currency without hesitation.Read full article... Read full article...