Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, March 01, 2015
Subprime Rising - U.S. Debt Breaking Bad Part 2 / Interest-Rates / US Debt
By: James_Quinn
‘If you’re committed enough, you can make any story work. I once told a woman I was Kevin Costner, and it worked because I believed it’ – Saul Goodman – Breaking Bad
“As calamitous as the sub-prime blowup seems, it is only the beginning. The credit bubble spawned abuses throughout the system. Sub-prime lending just happened to be the most egregious of the lot, and thus the first to have the cockroaches scurrying out in plain view. The housing market will collapse. New-home construction will collapse. Consumer pocketbooks will be pinched. The consumer spending binge will be over. The U.S. economy will enter a recession.” – Eric Sprott – 2007
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Saturday, February 28, 2015
U.S. Debt Breaking Bad / Interest-Rates / US Debt
By: James_Quinn
“At this juncture, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.” – Fed chairman, Ben Bernanke, Congressional testimony, March, 2007
“Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.” – James Grant, Grant’s Interest Rate Observer
The Federal Reserve issued their fourth quarter Report on Household Debt and Credit last week to the sounds of silence in the mainstream media. There were minor press releases issued by the “professional” financial journalists regurgitating the Federal Reserve’s storyline. Actual analysis, connecting the dots, describing how the massive issuance of student loan and auto loan debt has produced a fake economic recovery, and how the accelerating default rates in auto loans and student loans will produce the next subprime debt implosion, were nowhere to be seen on CNBC, Bloomberg, the WSJ, or any other status quo propaganda media outlet. Their job is not to analyze or seek truth. Their job is to keep their government patrons and Wall Street advertisers happy, while keeping the masses sedated, misinformed, and pliable.
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Saturday, February 28, 2015
Fed Raising U.S. Interest Rates - Shovelin’ Schmitt Against the Tide / Interest-Rates / US Interest Rates
By: John_Mauldin
There is an obsession in the marketplace over the date when the Fed will once again begin to raise rates. As if another 25 basis points is going to change the economics on tens of trillions of dollars of investments. But as we reflect on the issue more deeply, it becomes obvious that a minor bump in the fed funds rate will indeed change a great deal of economics all over the world.
No, it won’t do much to the cap rate on your latest real estate purchase, but it is likely to greatly affect the pricing of the currency and commodity markets. And those markets will affect corporate profits, which will affect the stock market. It’s all connected.
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Wednesday, February 25, 2015
Debt Be Not Proud / Interest-Rates / Global Debt Crisis 2015
By: John_Mauldin
Some things never change. Here is Eugen von Böhm-Bawerk, one of the founding intellectuals of the Austrian school of economics, writing in January 1914, lambasting politicians for their complicity in the corruption of monetary policy:
We have seen innumerable variations of the vexing game of trying to generate political contentment through material concessions. If formerly the Parliaments were the guardians of thrift, they are today far more like its sworn enemies. Nowadays the political and nationalist parties ... are in the habit of cultivating a greed of all kinds of benefits for their co-nationals or constituencies that they regard as a veritable duty, and should the political situation be correspondingly favorable, that is to say correspondingly unfavorable for the Government, then political pressure will produce what is wanted. Often enough, though, because of the carefully calculated rivalry and jealousy between parties, what has been granted to one has also to be conceded to others — from a single costly concession springs a whole bundle of costly concessions. [emphasis mine]
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Wednesday, February 25, 2015
Lowest Interest Rates For 3000 Years! / Interest-Rates / Global Financial System
By: John_Rubino
Business Insider's Myles Udland just posted a chart, drawn from research by the Bank of England, showing interest rates for the past 3,000 years. And for all those who've been feeling like today's "new normal" is actually profoundly abnormal, here's your proof. It turns out that interest rates, both long and short-term, are lower than they've ever been. Not lower than in this cycle, or post-war or in the past century, but ever, going back to the earliest days of markets.
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Monday, February 23, 2015
If Debt Was The Problem... / Interest-Rates / Global Debt Crisis 2015
By: John_Rubino
Confounded Interest just posted a nice summary of a McKinsey report on the growth of global debt during what some persist in calling the "great deleveraging." Turns out that since the crisis of 2008, debt has actually risen by $57 trillion, and the ratio of debt to GDP is up 17 percentage points to 286%. Meanwhile, central banks are monetizing 100% of newly-issued sovereign debt.
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Thursday, February 19, 2015
Sovereign Debt Monetization Parade - The Debt Heaven Fallacy / Interest-Rates / Global Debt Crisis 2015
By: Jim_Willie_CB
Today marks the Chinese New Year, the day promised for unleashing forces from the East which complete the Global Paradigm Shift. Let it rain; let it pour. For a full generation, the Western central bankers have relied upon debt to solve debt saturation problems as well as economic slowdowns founded within the credit cycle. In the last four years, they have added reliance upon free cost printed money to solve debt saturation and insolvency problems. The USTreasury Bond market has vanished for all practical legitimate purposes, a harbinger of the USDollar death event. With no surprise to the Jackass, the entire Western financial and economic system is not just decaying, but failing.
Monday, February 16, 2015
The Russian Banking Crisis / Interest-Rates / Russia
By: Arkadiusz_Sieron
We have shown so far that all ruble crises were accompanied by a strong U.S. dollar and low oil prices. We have concluded that Russia's current problems resemble those from 1998, though possibly even more severe than seventeen years ago, because the biggest country in the world is cut off from the international funding. But what about the following banking crisis in Russia?Read full article... Read full article...
Monday, February 16, 2015
Can Europe Recover From Its Easy-Money Obsession? / Interest-Rates / Quantitative Easing
By: MISES
Brendan Brown writes: The announcement of the euro-QE was not the start of Europe’s monetary Dark Age. That started many years ago with Chancellor Kohl’s undermining of the “hard deutsche mark Bundesbank” in the late 1980s. The darkness further descended when the newly created European Central Bank (ECB) implemented monetary frameworks which essentially tied Europe into a global 2-percent-inflation standard, following the US Federal Reserve.
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Saturday, February 14, 2015
U.S. Treasury Long Bond Breakdown / Interest-Rates / US Bonds
By: Dan_Norcini
Well, here we go again. I do not know how many times over the past year or so I have noted what looked like a chart breakdown in the US long bond. By that I specifically mean a close BELOW the 50 day moving average. Generally, that will get technicians to sit up and take notice and begin to approach a market from the short side. Each time I have noted this however, the bonds have done a flip-a-roo and back up they have gone continuing the bull streak.
Wednesday, February 11, 2015
Goldman Sachs’s Cohn: Fed in ‘Tough Position’ on Interest Rate Hike / Interest-Rates / US Interest Rates
By: Bloomberg
Gary Cohn, President and COO of Goldman Sachs, joined Bloomberg Businessweek reporter Brad Stone for an interview on Bloomberg TV. He spoke about the company's investments in the technology industry, regulation of the financial industry and the outlook for oil prices and Federal Reserve policy
When asked whether we will see a rate increase this year, Cohen said: "The Fed is in a very tough position...They’re going to be constrained by circumstances, going to be concerned about the strength of the dollar, and other countries are going to continue to devalue.”
Monday, February 09, 2015
Sovereign Bonds Mispricing / Interest-Rates / Credit Crisis 2015
By: Alasdair_Macleod
Today’s obvious mispricing of sovereign bonds is a bonanza for spending politicians and allows over-leveraged banks to build up their capital. This mispricing has gone so far that negative interest rates have become common: in Denmark, where the central bank persists in holding the Krona peg to a weakening Euro, it is reported that even some mortgage rates have gone negative, and high quality corporate bonds such as a recent Nestlé euro bond issue are also flirting with negative yields.
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Sunday, February 08, 2015
Why the Federal Reserve Will Move U.S. Interest Rates / Interest-Rates / US Interest Rates
By: Money_Morning
Michael E. Lewitt writes: To say that markets are confused about when the Federal Reserve is going to raise interest rates is the understatement of the year.
The confusion is understandable. While the U.S. economy no longer needs crisis-era policies like zero interest rates and quantitative easing, the rest of the world is still struggling.
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Sunday, February 08, 2015
Feel That? It's the Chill of Deflation / Interest-Rates / Deflation
By: DailyWealth
Chris Mayer writes: That chill in the air? This is what deflation feels like...
Right now, the 10-year U.S. Treasury pays just 1.8%... oil is $50 a barrel... commodity prices drift near to chilling lows... and the dollar is near multiyear highs. These are all deflationary trends.
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Saturday, February 07, 2015
China Makes the Right Move / Interest-Rates / China Economy
By: Steve_H_Hanke
Yesterday, China’s Central Bank reduced bank reserve requirements for large banks by 50 basis points to 19.5%. The Chinese know that the nominal level of national income is determined by the magnitude of the money supply. They also know that banks produce the lion’s share of China’s money. Indeed, banks produce 77% of China’s M2 money.
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Saturday, February 07, 2015
The Party Is Likely Over for U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Sy_Harding
U.S. treasury bonds defied the experts last year.
The consensus was that once the Fed began dialing back its massive bond-buying stimulus program last January, bond prices would have to begin plunging. With the stock market so clearly in an ongoing bull market, why would anyone but the Fed buy bonds with their yields at record lows, providing almost no income? The lack of interest in bonds was obvious from their plunge in 2013 even when the Fed was aggressively engaged in its QE bond buying.
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Saturday, February 07, 2015
U.S. Treasury Bond Yields Soaring ... But not for long / Interest-Rates / US Bonds
By: Anthony_Cherniawski
It’s time to rethink my outlook (Elliott Wave structure) in Treasuries. I had been concerned that the decline in TNX fell short of my projections. Then it hit me as I was writing about XJY and how high it might go in a panic stock decline. With gold out of the picture, it appears that the only other major asset that might be viewed as a safe haven would be US Treasuries. You can see that I have changed the Elliott Wave structure to reflect that view.
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Wednesday, February 04, 2015
The ECB Fears Deflation, But You Should Not / Interest-Rates / Eurozone Debt Crisis
By: Frank_Shostak
The European Central Bank (ECB) is planning to pump 1.1 trillion euros into the banking system to fend off price deflation and revive economic activity. The ECB president and his executive board are planning to spend 60 billion euros per month from March 2015 to September 2016.
Most experts hold that the ECB must start acting aggressively against the danger of deflation. The yearly rate of growth of the consumer price index (CPI) fell to minus 0.2 percent in December 2014 from 0.3 percent in November, and 0.8 percent in December 2013.
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Wednesday, February 04, 2015
The Swiss 10-Year Bond Illustrates Central Banks` Flawed Monetary Policy / Interest-Rates / Credit Crisis 2015
By: EconMatters
Negative 15 Basis Points
Switzerland`s 10-Year Bond Yield is now negative 15 basis points, yeah that`s right we don`t even have to bring up the notion of inflation and real rates of return, the actual 10 year bond for Switzerland is charging investors 15 basis points for the privilege of buying Swiss debt, and you thought CD rates were bad.
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Wednesday, February 04, 2015
This Is What Gold Does In A Currency War / Interest-Rates / Currency War
By: John_Rubino
Australia just fired a serious shot in the currency war by cutting its overnight lending rate to a record-low 2.25%.
With the aussie as a result tanking, local holders of bank accounts and cash are quite a bit poorer than they were at this time last year. But owners of gold are doing just fine. While the metal is falling again here in the US (which is at the moment trying to withdraw from the currency war), it’s up about 20% in the past three months in countries like Australia that are on the offensive.
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