Analysis Topic: Interest Rates and the Bond MarketThe analysis published under this topic are as follows.
Tuesday, July 09, 2013
Frank Marchant writes: In 2010 Meredith Whitney made an earth shattering statement during a CBS's "60 Minutes" interview that rocked the municipal bond investment world.
"There is not a doubt in my mind that you will see a spate of municipal-bond defaults,"said Meredith Whitney on Dec 19. She continued, "You could see 50 sizable defaults, and 50 to 100 sizeable defaults, more. This will amount to hundreds of billions of dollars' worth of defaults."Read full article... Read full article...
Sunday, July 07, 2013
Mortgage Backed Securities Clobbered and U.S. Treasury Yields Soar Following Job Numbers / Interest-Rates / US Interest Rates
Curve Watchers Anonymous notes that treasury yields surged higher and mortgage backed securities (MBS) had a steep selloff following purportedly good job numbers.
Beneath the surface, the economy actually shed 326,000 full-time jobs.Read full article... Read full article...
Friday, July 05, 2013
Frank Marchant writes: Although you might think the markets simply respond any time Ben Bernanke sneezes, his "cold cycle" is not one of the indicators that will spell the slowing and eventual cessation of the printing press at the Fed.
There actually is a mathematical formula used by the Federal Reserve to determine when to stop the presses.Read full article... Read full article...
Thursday, July 04, 2013
Steve McDonald writes: Though painful, the recent sell-off in bonds has had three positive effects on the bond market:
First, it reinforced the fact that the bond market’s movements are mechanical and predictable.
Second, it drove up rates on all bonds to more reasonable levels.Read full article... Read full article...
Wednesday, July 03, 2013
Michael Lombardi writes: Investors beware: the bond market is treading in very rough waters. The sell-off we have seen of U.S. bonds might just lead to more troubles ahead for the bond market. Just take a look at the chart below:Read full article... Read full article...
Monday, July 01, 2013
Trading opportunities arise every day, however, quality trades that offer an edge do not. We use developing market activity, as depicted in charts, to find trade potentials with a defined limited risk and greater reward potential. 30 Year Bonds appear to be advertising weakness and a shorting opportunity.
When seeking trades, we use the “If, Then,” approach. IF the market does this, THEN we do that. The latter is acted upon only if the former requirements are met. Following this scenario, there is no guesswork or predicting involved, and the emotional element is not in play, either. Discipline is required, but it leads to more profitable trading potentials, so it is worth the effort.Read full article... Read full article...
Saturday, June 29, 2013
The Critical Trend Towards Higher Interest Rates Has Begun / Interest-Rates / International Bond Market
“’The Fed can continue to spew out QE until the bond market says it can’t.’ - Richard Russell. PS: The bond market has said that ‘it can’t.’”
Richard Russell, dowtheoryletters, 06/21/2013
“The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses…This little coterie…runs our government for their own selfish ends. It operates under cover of a self-created screen…seizes…our executive officers… legislative bodies…schools…courts…newspapers and every agency created for the public protection.”
John F. Hylan, Mayor of New York, 1918-1925
via lemetrepolecafe.comRead full article... Read full article...
Thursday, June 27, 2013
From 2007 the crises have grown - Central Banks can't fix it alone!
Whether it is Bill Gross of Pimco, Marc Faber, ourselves or so very many competent analysts in the financial world, to a man, are warning of the destructive power of rising interest rates. Now in addition to all of us, we have the central banker of central bankers, the Bank of International Settlements, giving a serious warning to developed world governments that it is perhaps too late to rely on growth to rescue the global economy from deflation.Read full article... Read full article...
Tuesday, June 25, 2013
(Wikipedia): Call My Bluff was a long-running British game show between two teams of three celebrity contestants. The point of the game is for the teams to take it in turn to provide three definitions of an obscure word, only one of which is correct. The other team then has to guess which is the correct definition, the other two being "bluffs".
Grant Williams writes: Among the first things we learn in school are the rules of grammar — the building blocks of proper communication which underpin the English language.Read full article... Read full article...
Monday, June 24, 2013
Courtesy of Doug Short : The bond market selloff after the FOMC meeting and Chairman Bernanke’s surprising specifics about exiting QE was quite stunning. However, his hawkish position was supported by today’s release by the Bank for International Settlements (BIS) of its annual report. The abstract for opening section, headed Making the most of borrowed time, begins with the following assertion:
Read full article... Read full article...
Originally forged to describe central banks’ actions to prevent financial collapse, “whatever it takes” has become a rallying cry for them to continue their extraordinary policies. But we are past the height of the crisis, and the goal of policy today is to return to strong and sustainable growth.
Monday, June 24, 2013
Moe Zulfiqar writes: It’s no secret: the Federal Reserve has kept U.S. bond prices higher and yields historically low by keeping interest rates low with multiple rounds of quantitative easing.
But now things have taken a minor turn, after the Federal Open Market Committee (FOMC) meeting minutes were released on June 19. “The committee currently anticipates that it will be appropriate to moderate the monthly pace of purchases later this year,” said Fed chairman Ben Bernanke. “And if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.” (Source: “Bernanke says Fed likely to reduce bond buying this year,” Reuters, June 19, 2013.)
Sunday, June 23, 2013
There may come a day soon where the markets sell off if one of the whiskers in Big Ben’s beard is out of place. Or perhaps if his tie is a bit crooked. Or maybe we end up with Janet Yellen as the next puppet in charge over at the local banking cabal and we fret about her hairdo. I don’t know, but one thing that is for certain is that this central bank so wants to be loved and we are so under psychological attack with all of this QE nonsense that it isn’t even funny.Read full article... Read full article...
Saturday, June 22, 2013
As usual the Federal Reserve media reaction machine has fallen for a poorly executed head fake. It has been fooled by this move many times in the past and for its efforts it has tackled nothing but air. Yet right on cue, it took the bait once more. Somehow the takeaway from Wednesday's release of the June Fed statement and the Bernanke press conference is that the Central bank is likely to begin scaling back, or "tapering," it's $85 billion per month quantitative easing program sometime later this year, and that the program may be completely wound down by the middle of next year.Read full article... Read full article...
Friday, June 21, 2013
Why U.S. Interest Rates Are Rising Sharply Even Though Inflation Is Non-Existent / Interest-Rates / US Interest Rates
Sasha Cekerevac writes: As we all know, the Federal Reserve has two mandates: keep the inflation rate low (officially, they have an optimal rate of two percent) and try to keep employment at or near maximum levels.
Because the extent of the recession has been so large and deep, in both of these measures, the Federal Reserve has not yet attained either goal. As a result, the Federal Reserve has enacted an extremely aggressive monetary policy stance.Read full article... Read full article...
Friday, June 21, 2013
The QE Infinite parade officially ended yesterday when Bernanke hinted at tapering QE later this year or in mid-2014.
I first warned Private Wealth Advisory subscribers about this in mid-May writing,Read full article... Read full article...