Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, August 01, 2015
QE Fails In Japan: Inflation Nonexistent, Consumer Spending Drops, More Ease Coming / Interest-Rates / Quantitative Easing
By: John_Rubino
After nearly three decades of stagnation, Japan in 2013 went all-in, ordering its central bank, the Bank of Japan, to buy pretty much every bond on the market with newly-created yen. The BoJ's balance sheet -- a rough proxy for the amount of money it has created and dumped into the economy -- soared at a rate that dwarfs, in relation to GDP, the US Fed's QE programs.
Monday, July 27, 2015
Are We Seeing a Trend Reversal with U.S. Interest Rates? / Interest-Rates / US Interest Rates
By: Submissions
Frank Suess writes: In the second quarter, we saw a jump in yields across the board. The yield of 10-Year US Treasuries jumped from 1.9% to 2.4% over the course of the quarter, representing a yield increase of 50 bps. This led to a decline of almost 2% in the Bloomberg US Treasury Bond Index. In Europe the development was much more dramatic; over the quarter, the Bloomberg German Sovereign Bond Index lost around 4.5% in value. This was due to an increase in the German 10-Year yield from 0.2% to 0.8% (60 bps). It is not completely clear what sparked the massive yield increase in Europe. It might have been a technical correction due to the very high prices bonds were trading at, increased risk aversion towards Europe due to the situation in Greece (Bill Gross even called shorting German bunds "the short of a lifetime"), or possibly aggressive short positions by some investors.
Friday, July 24, 2015
A Bond Market Crisis Is Coming... Here's What to Do / Interest-Rates / US Bonds
By: DailyWealth
Dr. David Eifrig writes:
Wall Street is already sending warning signals about the next financial cataclysm. Analysts are using phrases like "liquidity crunch" and "crisis situation."
It could happen next week... or next month...
Predicting exactly how a crisis will happen is difficult. Predicting exactly when is impossible.
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Friday, July 24, 2015
Not Your Father’s Inflation / Interest-Rates / Global Debt Crisis 2015
By: Dr_Jeff_Lewis
“Profound ignorance masquerading as wisdom - all the worse from the mouths of the prestigious, the PhD, the Nobel Prize winner….” - UnknownIt’s time to revisit British economist Peter Warburton’s April 2001 classic tome “The debasement of world currency: It’s inflation but not as we know it“.
Our friend from GATA, Ed Steer brought it to attention once again.
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Friday, July 24, 2015
Misperceptions Create Significant Bond Market Value / Interest-Rates / US Bonds
By: John_Mauldin
In today’s Outside the Box, my good friend Lacy Hunt of Hoisington Investment Management reminds us that since the 1990-91 recession, the 30-year Treasury bond yield has dropped from 9% to 3%, a downward move nearly identical to the decline in the rate of inflation, which fell from just over 6% in 1990 to 0% today. Therefore, Lacy says, “(I)t was the backdrop of shifting inflationary circumstances that once again determined the trend in long-term Treasury bond yields.”
Thursday, July 23, 2015
The ‘Real’ Reason the Fed Wants to Raise Interest Rates / Interest-Rates / US Interest Rates
By: Gary_Tanashian
In case you thought you were smart enough to know why the Fed wants to do what it supposedly wants to do [1] MarketWatch sets you straight with the real scoop. We’ll use this as a talking point and see what comes of it…
Here’s the real reason the Fed wants to raise rates
Policy makers want to give themselves some room to maneuver
That is the commonly held belief and who am I to dispute it? A big part of the problem is and has been their refusal to begin a journey toward normalization 2 years ago, when the economy began to visibly (we noted the seeds of that improvement in January of that year) improve. They had no confidence and I was left to wonder (aloud here, frequently and I am sure, sometimes obnoxiously) why Grandma [2] (and her 0% savings account payout) had to continue to bear the brunt of this non-action despite a recovering economy.
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Wednesday, July 22, 2015
Market Bubble in Trouble? Rinse & Repeat / Interest-Rates / Liquidity Bubble
By: EWI
Our new, FREE report shows you specific areas of the U.S. stock market that have become dangerously frothy
When I was in college, I had this weekly ritual. I'd drive home to my parents' house every Friday, run inside to say hello, grab some food, and leave several bags of dirty laundry to be picked up the next morning.
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Friday, July 17, 2015
Bonds and Currencies Brace for BoE and Fed Interest Rate Hikes / Interest-Rates / Central Banks
By: Gary_Dorsch
It's approaching that time of year when traders and central bankers alike depart for long holidays. But this summer is shaping up to be anything but quiet for markets, with betting on a "Greek Exit" from the Euro roiling markets, and Red-chip stocks in China nose diving and requiring unprecedented "Plunge Protection Team" intervention in order to halt the onslaught. After a few weeks of turmoil, the Greek debt crisis has been kicked down the road for another few years, with another EU bailout, and after the Shanghai red-chip index, staged a +10% rebound from its panic bottom lows hit on July 7th, traders now regard these sideshows as "fixed" and under the control of their central planners. With these worries can be put on the back burner for now, it's back to business as usual, - that is to say, back to investing in heavily manipulated markets, in which extreme emergency policies, such as NIRP, ZIRP, and QE have distorted the pricing of virtually all assets, and where your local central bank has your back.
Wednesday, July 15, 2015
The U.S. Fiscal Grand Canyon and the Cycle of Hyperinflation / Interest-Rates / US Debt
By: Dr_Jeff_Lewis
The cycle of hyperinflation is already upon us. It was set in motion long ago. We are in the ultimate conundrum. Politically, the US Government, Treasury, and Central Banks must satisfy - pay for - unfunded liabilities and promises.
But the “money” is is simply a desperate conjuring meant to keep the doors of government open.
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Tuesday, July 14, 2015
Has The Federal Reserve Missed Its Chance To Increase Interest Rates / Interest-Rates / US Interest Rates
By: AnyOption
The finance news space has been bombarded with so many different stories recently that many are starting to forget about one of the biggest stories in the space that we've seen throughout the year; the Federal Reserve. If you remember back to the beginning of the year, there were quite a bit of talks about a Federal Reserve interest rate hike that was to come in June, then it was September, and now, the story seems to have dissipated. Nonetheless, it's still a very important issue to follow; and more importantly, the landscape has changed quite a bit. So today, we'll talk about why Federal Reserve interest rates are so important, how the landscape has changed with regard to the topic, and why I think the Fed may have missed its chance to act. So, let's get right to it...
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Saturday, July 11, 2015
From Tsipras Proposal to Yellen's Speech / Interest-Rates / Eurozone Debt Crisis
By: Ashraf_Laidi
This afternoon's speech by Fed Chair Yellen at 12:30 Eastern (16:30 GMT/17:30 BST) is expected to reveal her reiteration the message that more will be needed from jobs and inflation before rates lift-off, especially 48 hours before another emergency EU/Greece summit. Yellen's take on the China and Greece issues will undoubtedly be highlighted as to be taken into consideration by the Federal Reserve. Yellen will be asked more on these global issues on Wednesday's semi-annual testimony to Congress (a crucial hour, coinciding with the Bank of Canada decision).
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Friday, July 10, 2015
The Central Bankers Dilemma / Interest-Rates / Central Banks
By: Dr_Jeff_Lewis
We are playing with fire.
How quickly we forget about the power of compounding interest - in reverse.
The world is limping along at ultra low interest rates. Otherwise benign movements from such extreme lows are magnified beyond comprehension. An equivalent interest rate move up from 10% has a tiny overall effect, compared with the same move up from lower rates.
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Friday, July 10, 2015
Puerto Rico Debt Crisis: Should U.S. Investors Care? (Video) / Interest-Rates / Global Debt Crisis 2015
By: EWI
White House: No U.S. bailout for Puerto Rico
Editor's note: You'll find the text version of the story below the video.
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Wednesday, July 08, 2015
China Crash, Can You Imagine The Fed Raising Rates In This World? / Interest-Rates / US Interest Rates
By: John_Rubino
$1.4 trillion of Chinese stocks have stopped trading. Greece is finally imploding. The US trade deficit is widening on falling exports.Copper just fell back to 2009 levels. And safe-haven capital flows are revving up again, with Swiss 10-year bonds once again trading with negative yields.
Tuesday, July 07, 2015
Greece Will Lead the West Into a Debt Implosion / Interest-Rates / Global Debt Crisis 2015
By: Graham_Summers
For over 30 years, sovereign nations, particularly in the West have been buying votes by offering social payments in the form of welfare, Medicare, social security, and the like.
When actual bills came due to fund this stuff, Governments quickly discovered that current tax revenues couldn’t cover it (see the image below)… so they issued sovereign debt to make up the difference.
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Thursday, July 02, 2015
The Fuse of the Global Debt Bomb Has Been Lit / Interest-Rates / International Bond Market
By: Graham_Summers
Greece defaulted on a debt payment to the IMF last night at midnight.
Regardless of anything else, we have now seen a developed country “go over the cliff” in terms of negotiating debt payments. This will have global implications for other indebted countries in terms of negotiating tactics going forward.
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Wednesday, July 01, 2015
German Bunds See no GrExit / Interest-Rates / Eurozone Debt Crisis
By: Ashraf_Laidi
The Bunds-Euro relationship remains intact, as both continue to converge along the crucial trendline support since the April bottom. With yet another yields bounce off the support today, bunds are further eliminating Grexit scenario for now as does the single currency.
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Thursday, June 25, 2015
Fed Taper Talk, And The $10 Bill / Interest-Rates / US Interest Rates
By: Steve_H_Hanke
Since May 2013, Fed taper talk has fluctuated between hot and cold. When it’s hot, the markets anticipate a monetary tightening and prices become volatile.
Recently, speculation about just when the Fed will increase interest rates has reared its head, again. Since early 2013, I have said that the Fed would not act until late 2015. Well, it’s now approaching that date and I think the Fed will act, but later, rather than earlier.
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Thursday, June 25, 2015
When a Bond Is Not a Bond / Interest-Rates / International Bond Market
By: John_Mauldin
By Jared Dillian
I don’t know anything about Greece. I actually make it a point not to.
What I’ve found over the course of my career is that the closer people get to an issue, the worse their predictive power is. The forest-for-the-trees phenomenon. Like all the economists who do nothing but watch the Fed, every piece of data, every speech. Their track record in predicting interest rate moves is worse than everyone else’s!
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Thursday, June 25, 2015
When Will US Debt Hit the Wall? / Interest-Rates / US Debt
By: DeviantInvestor
As I see it, the following are true:
- Debt is increasing far more rapidly than growth in the underlying economies that must support that debt. Although this is also true in Japan, the UK, and Europe, I’ll focus on the US.
- Revenue is increasing but less rapidly than debt. This is a problem.
- There will come a time when the interest payments on exponentially increasing government debt will exceed what the economy can support. Call that point “hitting the wall.”
- Higher interest rates will cause the US economy to “hit the wall” sooner. Lower interest rates merely delay the “day of reckoning.”