Topic: Interest Rates and the Bond Market
The new items published under this topic are as follows.
Friday, July 03, 2009
Negative Global Interest Rates, Sweden Cuts Deposit Rate to NEGATIVE .25% / Interest-Rates / Deflation
By: Mike_Shedlock
There has been a lot of ludicrous recommendations recently to combat deflation by making deposit rates negative. I did not think any central bank would be dumb enough to try it. I thought wrong.
Thursday, July 02, 2009
In the Future, Interest Rates Will Soar and Consumers Will be Sore Also / Interest-Rates / International Bond Market
By: David_Petch
At the present, governments around the globe are printing money as if there were no tomorrow in order to try and prevent debt-laden banks from going under and trying to stimulate the fractional reserve banking system. The past 20 years of economic growth has been based on a “Pay it Forward” basis…someone gets a new couch or car and ends up paying for it over a defined period of time. The expansion of credit in turn allowed for false consumption because most people never really had the money in hand.
Thursday, July 02, 2009
U.S. Treasury Bond Market Update / Interest-Rates / US Bonds
By: Frederic_Simons
The 30year T-Bond (ZB September 09) is in an uptrend since it traded above the green resistance line for 2 consecutive bars. However, ZB could be in the process of turning down again after having made an a-b-c correction off its recent lows. A confirmation for this assumption would be visible if and when ZB U9 trades below the red line of the 180 minute chart - preferably for two consecutive bars. The red sell-line is currently at 116'21.
Wednesday, July 01, 2009
New Recovery High for Treasury Bond TBT ETF / Interest-Rates / US Bonds
By: Mike_Paulenoff
Let’s notice that the ProShares UltraShort 20+ Year Treasury Bond ETF (NYSE: TBT) has recovered all of yesterday’s weakness and in fact has climbed to a marginal new recovery high this morning on the way to my next optimal target zone of 52.50/80.
Wednesday, July 01, 2009
Investment Grade Bonds Return 9.2%, Junk Returns 29%; Has the "Hard Money" Been Made? / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
As long as the corporate bond market is healthy there is going to be a bid on equities. And in the first half of 2009, junk bonds have been running.
Monday, June 29, 2009
Objective Analysis of the Increase in the Fed's Balance Sheet / Interest-Rates / Credit Crisis 2009
By: Paul_L_Kasriel
In recent weeks two prominent economic commentators - Arthur Laffer and Alan Greenspan - have warned about the inflationary potential emanating from the unprecedented increase in the Fed's balance sheet. Yes, as shown in Chart 1, reserves created by the Fed have increased by a staggering $858 billion in the 12 months ended May. But excess reserves on the books of depository institutions have increased by almost as much, $842 billion (see Chart 2). So, in the 12 months ended May, 98% of the increase in reserves created by the Fed has simply ended up as idle reserves on the books of depository institutions.
Monday, June 29, 2009
U.S. Treasury Bonds Strong Performance Despite Record Issuance / Interest-Rates / US Bonds
By: Levente_Mady
The bond market put in a strong performance in spite of another record volume of Treasury Note auctions last week. As discussed in this here column last week, Treasury supply has been an ongoing theme in the market for a while. It has been front page news for months now and it is pretty much fully discounted for that reason.
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Sunday, June 28, 2009
What PIMCO's Bill Gross Doesn’t Want You to Know (Part 2) / Interest-Rates / US Bonds
By: Mike_Stathis
I hope you now understand how mutual funds work. They play the same shell games as the credit card industry. No matter which share class you buy, you are going to pay huge fees. And most investors who haven’t read this piece will never realize that.
Saturday, June 27, 2009
What PIMCO's Bill Gross Doesn’t Want You to Know (Part 1) / Interest-Rates / US Bonds
By: Mike_Stathis
I’ve sat by now for about ten years now, waiting for someone from the financial industry to point out what I am about to reveal. I meant to write about this but I kept forgetting.
I have to conclude that no one has written or spoken in the media about what I’m about to reveal because many simply are unaware of what I deem to be obvious. Others don’t want to go against their colleagues in the financial industry. But what these guys seem to forget is that their first loyalty should lie with the investment public.
Read full article... Read full article...
Saturday, June 27, 2009
A Case For U.S. Treasury Bonds! / Interest-Rates / US Bonds
By: Sy_Harding
There’s an old saying that goes like this; “The market will do whatever it must to fool the majority of investors”. It’s another way of describing investor sentiment, which is known as a ‘contrary indicator’ (because the majority of investors are extremely bullish at important market tops, and extremely bearish at important bottoms).
Tuesday, June 23, 2009
U.S. Treasury Bond TLT ETF Continues to Climb / Interest-Rates / US Bonds
By: Mike_Paulenoff
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) continue to act well, suggesting equity traders might be getting increasingly afraid of something... and need to buy some safety. Although existing home sales are showing some sign of life now, Mr. (Bond) Market does not seem to care. The TLTs continue to climb off of last Friday’s pullback low at 90.11 and appear headed for a confrontation with the Dec ’08-present resistance line, now at 94.20. A close above 94.20 will be a very bullish technical event near-term and will project the TLT to 96.60 next.
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Monday, June 22, 2009
Bearish Trader Sentiment Bullish for Bonds / Interest-Rates / US Bonds
By: Levente_Mady
The bond market started the week with a decent tone but it pulled back on Thursday as the Treasury announced the details of next week’s bond auctions. In spite of the pull-back, the Long bond managed to eke out a small gain for the second week in a row. Real rates in the long end remain on an increasing trend as CPI declined from -.7 to -1.3% year over year through May causing the real long bond yield to close in on 6%.Read full article... Read full article...
Sunday, June 21, 2009
Geithner's Plan Just Doesn't Get It: Securitisation Is The Solution - Not The Problem / Interest-Rates / Credit Crisis Bailouts
By: Andrew_Butter
Securitisation has a bad name these days, and that's Official; President Obama says it was a big part of the problem. And he's absolutely right; it was THE problem.
What happened was a bunch of shysters on Wall Street cooked up a load of dud securities and sold them all over the world, and then a bunch of morons wrote naked insurance on them and now they can't pay out on the claims.
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Friday, June 19, 2009
UK Gilt Bond Market Looks Vulnerable At These Better Levels / Interest-Rates / UK Interest Rates
By: Seven_Days_Ahead
The Technical Trader’s view:
Friday, June 19, 2009
The Federal Reserve System's Party Line / Interest-Rates / Central Banks
By: LewRockwell
I monitor statements by senior officials of the Federal Reserve System. There are supposedly "hawks" among the regional Federal Reserve banks – privately owned banks. These "hawks" oppose the "doves." The "doves" are always ready to inflate. The "hawks" are always ready to remind the "doves" that inflation may be a problem one of these days, but not yet. Then the "hawks" vote with the "doves" to expand the monetary base.
Thursday, June 18, 2009
UK Fixed Rate Mortgages Interest Rate Increases / Interest-Rates / Mortgages
By: MoneySupermarket
Louise Cuming, head of mortgages at moneysupermarket.com, said: "There has been a flurry of activity in the mortgage market, but unfortunately mostly to the detriment of borrowers.Read full article... Read full article...
Monday, June 15, 2009
How to Profit From Front-Running the Government Bond Auctions / Interest-Rates / US Bonds
By: DailyWealth
Tom Dyson writes:
Front-running is illegal. Here's how it works: A crooked broker receives a large order from a customer. Before he executes the customer's order, he'll buy the stock in his own account. The customer's order pushes the price of the stock up and gives him an easy profit.
Read full article... Read full article...
Monday, June 15, 2009
The Secular Trend Change in U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Guy_Lerner
I am on record stating that yields on the 10 year Treasury bond will move higher over the next 12 months, and this will represent a secular trend change.
Monday, June 15, 2009
Fixed Rate Mortgage Interest Rates About to Rise / Interest-Rates / Mortgages
By: MoneySupermarket
- Rising swap rates may herald a new wave of costlier fixed rate mortgage deals
- Two years of decreasing fixed rates have to come to an end
Sunday, June 14, 2009
Interest Rate Hikes Coming as Investors Return to Risky Assets / Interest-Rates / US Interest Rates
By: Prieur_du_Plessis
Bloomberg: Pimco says “rate hikes will be some time in coming” “Pacific Investment Management Co., which runs the world’s biggest bond fund, said the economic outlook ‘looks bad’ for most of the world and central banks will refrain from raising interest rates.
“‘Rate hikes will be some time in coming,’ Andrew Balls, a managing director for the company in London, wrote in a report on the company’s web site.
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Saturday, June 13, 2009
Ben Bernanke's Next Parlor Trick on U.S. Debt Financing / Interest-Rates / US Debt
By: Mike_Whitney
Ben Bernanke is getting ready to pull another rabbit out of his hat and he's hoping no one figures out what he's up to. Here's the scoop; the Fed chief needs to "borrow up to $3.25 trillion in the fiscal year ending Sept. 30" (Bloomberg) without triggering a run on the dollar. But, how? If the stock market keeps surging, investors will turn their backs on low-yielding US Treasuries and move into riskier securities hoping for better returns. The only way to attract more buyers to US debt is by raising interest rates which will kill the "green shoots" of recovery and make it harder for people to buy homes and cars. It's a conundrum.
Saturday, June 13, 2009
U.S. Fed in Trouble as Falling Dollar Risks Bond Investors Revolt / Interest-Rates / US Bonds
By: Submissions
Frank Shostak writes: A growing concern for Fed policy makers is a weakening in the US dollar against major currencies. The price of the euro in US-dollar terms climbed from a low of $1.27 in November last year to around $1.41 in May and $1.43 in early June – an increase of 12.6% from November. The major currencies dollar index fell to 78.89 in May from 82.3 in April – a fall of 4.1%. If the declining trend in the US dollar were to consolidate, this could cause foreign holders of US-dollar assets to divest into non-dollar-denominated assets and precious metals. This in turn could spark another financial crisis.
Saturday, June 13, 2009
Bond Yields Soaring is Not Always an Inflationary Event / Interest-Rates / International Bond Market
By: Adam_Brochert
Bond yields soaring is not always an inflationary event. The traditional teaching is that rising bond yields indicate economic recovery and/or inflation. This is true until it isn't. The problem is that the best parallel for when it ain't true is what's happening right now. Damn, this investing stuff gets complicated when you look through actual history.
Friday, June 12, 2009
Technical Rally in Treasury Bonds TLT ETF / Interest-Rates / US Bonds
By: Mike_Paulenoff
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) continues to climb off of yest.'s new low of 87.45 (that occurred ahead of the 30 year auction results), which has triggered buy signals in my work (above 89.30/40) for upside continuation to 92.00 next. Has anything changed that has all of a sudden made longer term Treasury bonds more attractive FUNDAMENTALLY? For the time being, the upmove is mostly considered a sling-shot from a very oversold condition.
Friday, June 12, 2009
Is Short Sterling Topping Out? / Interest-Rates / UK Interest Rates
By: Seven_Days_Ahead
The Technical Trader’s view:
Thursday, June 11, 2009
U.S. Treasury Bonds Volatility and Interest Rate Swaps / Interest-Rates / US Bonds
By: Jim_Willie_CB
The rising long-term USTreasury Bond yield continues to capture attention. The breakout chart for the 10-year Treasury shot up to 3.75% last week, but zoomed to touch 4.0% this week. Less attention has been directed at the short-term USTreasury Bill yields. What was a reasonably steady 2-year TBill yield in the 0.80% to 1.0% range has made a big move to 1.35% suddenly. Few have noticed, since mortgage rates are tied to the 10-year USTreasury. Much talk came in the last few weeks that China was rebalancing its USTreasury hoard, selling some long-term maturity bonds and buying shorter-term maturity bills. The rise in bond yields has actually been attributed to a USEconomic recovery, but that is absurd on its face, with a dozen statistics to debunk it. This China story was intended to mask the real events, to blame them in part for the US bond instability, and to divert attention away from a potentially important threat. Not only has the housing market stalled, with new mortgages and refinanced loans hitting a brick wall.
Thursday, June 11, 2009
Profit from Rising Interest Rates with ETFs / Interest-Rates / Exchange Traded Funds
By: Money_and_Markets
Ron Rowland writes: Have you looked at interest rates lately? They’re soaring! Back on March 18, the 10-year Treasury bond yield dropped as low as 2.54 percent. This week it went above 3.90 — a huge move in less than three months. The same thing is happening in all but the very shortest maturities.
Thursday, June 11, 2009
U.S. Government to Issue $2 Trillion of Debt This Year / Interest-Rates / US Debt
By: Axel_Merk
In our estimate, the U.S. Treasury will have to raise over $2 trillion dollars this year to finance new obligations. In addition, over $2 trillion in government debt held by the public is coming due and has to be re-financed this year.Read full article... Read full article...
Wednesday, June 10, 2009
Anatomy Of A Treasury Bond Market Top / Interest-Rates / US Bonds
By: Guy_Lerner
One of the major themes that I have been highlighting on this blog since its inception 6 months ago is the potential for a secular trend change in long term Treasury bonds. Starting back in December, 2008, there was a high likelihood of higher yields and lower bond prices. Last month provided technical confirmation that the top is in for Treasury bonds, and we should see yield pressures in the long end of the curve lasting at least 12 months.
Wednesday, June 10, 2009
Parabolic U.S. Treasury Yield Curve Warning of Hyper Inflation / Interest-Rates / HyperInflation
By: Gary_Dorsch
Everything depends upon proper judgment. Of ten people who examine the same chart, or listen to the same speech, each person may well understand it differently - perhaps only one of them will understand it correctly. How then should traders interpret the shape of the US Treasury yield curve, which has gone parabolic in recent weeks, steepening to its highest level since 2004? Similarly, in Australia, the Treasury yield curve is at its steepest in history.
Wednesday, June 10, 2009
Printing Debt not Money / Interest-Rates / Quantitative Easing
By: Adam_Brochert
We often hear and read about the government “printing money” like there’s no tomorrow. Our federal government has certainly passed out enough money to the people who got us into this mess that it seems as though hyperinflation is theoretically possible. But every US Dollar printed in our current fiat monetary system is actually a debt.
Wednesday, June 10, 2009
Regional Central Banker Blows the Whistle on the Fed / Interest-Rates / Central Banks
By: LewRockwell
Thomas Hoenig is the president of the Federal Reserve Bank of Kansas City. In a recent speech, he laid out a scenario for what the Federal Reserve ought to do and what the U.S. government ought to do, and what will happen if they refuse. You can read it here.
Read full article... Read full article...
Tuesday, June 09, 2009
As Treasury Bond Yields Rise, Why Are Other Yields Falling? / Interest-Rates / US Bonds
By: Paul_L_Kasriel
There is a lot in the press these days about how the recent rise in Treasury bond yields has the potential to abort a nascent economic recovery. To this I say, nonsense! Chart 1 shows that as the Treasury bond yield has risen in recent weeks, the yields on privately-issued debt have declined in absolute levels. Chart 2 shows that the stock market has been trending higher since March as the Treasury bond yield has risen.
Tuesday, June 09, 2009
Mortgage Borrowers Suffer as Lenders Charging Extortionate Interest Rates / Interest-Rates / Mortgages
By: MoneySupermarket
Despite the Base Rate continuing to hold at 0.5 per cent, providers are increasing average mortgage rates, and the margin above the Libor rate is rising, proving that the Bank of England is increasingly toothless when it comes to regulating the cost of mortgages, with lenders increasing profit margins at the expense of their customers.
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Tuesday, June 09, 2009
Seasonal's and Fundamentals Supportive of Treasury Bonds / Interest-Rates / US Bonds
By: Levente_Mady
The bond market sold off another four and a half points during the course of last week. Market participants seem to be convinced that the worst is behind us as they were busy selling more bonds and buying whatever else they could get their dirty paws on. This week there is another set of 3, 10 and 30 year Treasury auctions on deck. That ought to hold the market back at the outset, but perhaps not after Thursday’s long bond auction.
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Monday, June 08, 2009
U.S. Debt Crisis as Treasury Bond Prices Collapsing and Interest Rates Surging / Interest-Rates / US Debt
By: Money_and_Markets
Martin Weiss writes: Just as we’ve been warning, the United States Treasury is the next and largest victim of this great debt crisis.
Right now, the Treasury’s finances are collapsing … its bond prices plunging … its interest rates surging.
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Saturday, June 06, 2009
Huge Budget Deficit Producing New Debt to Force Interest Rates Higher / Interest-Rates / US Debt
By: John_Mauldin
The New, New Normal
A Different Perspective on Health Care
Staying Rich in the New Normal
We are coming to a critical inflection point, perhaps the most critical point that we have had in 70 years for the US and to a great extent the global economy. The choices we make (or that Congress and the Fed make for us) will affect not just our investment portfolios but business and our jobs for a very long time. Last week I talked about the three paths we face as a nation. I want to go back to that theme and expand upon it. You need to clearly understand what the risks are so that you can interpret the actions and data that will be coming at us in the next few quarters. I am feeling a little tired today, so I am going to take the liberty to reproduce Bill Gross's latest comments as well, which are somewhat in line with my own.
Read full article... Read full article...
Friday, June 05, 2009
Team Obama Charm Offensive on U.S. Treasury Bond Holders / Interest-Rates / US Bonds
By: Peter_Schiff
This week, Team Obama took their dog and pony show on the road. Treasury Secretary Geithner went to China, Fed Chairman Bernanke to Capitol Hill, and the President himself began a Mideast tour in Saudi Arabia. This full-court press is not coincidental, and comes just as the federal government has begun unloading trillions of dollars in new Treasury obligations. The coordinated charm offensive is meant to assure the world-at-large that the United States can repay these obligations without destroying the dollar.
Thursday, June 04, 2009
Germanies Merkel Cautions European Central Bankers on Debt Monetization / Interest-Rates / Euro-Zone
By: Axel_Merk
German Chancellor Angela Merkel caused a stir when warning the European Central Bank not to engage in asset purchases. She has received a lot of attention as it is an unwritten rule not to infringe upon the independence of central bankers. While we would typically agree that the independence of central bankers is of paramount importance, we believe it is not only appropriate, but also her duty to speak out. Let us elaborate.
Wednesday, June 03, 2009
Why Interest Rates are Rising / Interest-Rates / US Interest Rates
By: Marty_Chenard
Today ... I must speak about long term interest rates and mortgages.
Yesterday, the 30 year yields closed at 44.89. At the end of December, the 30 year yields were only 25.19 ... that was a significant rise (see the chart below). 30 year mortgage rates got down as low as 4.5%, and yesterday they ranged from 5.25% to 5.375%.
Read full article... Read full article...
Wednesday, June 03, 2009
Geithner's Debt Dialogue With China, but the U.S. Dollar May Still be Doomed / Interest-Rates / US Bonds
By: Money_Morning
Jason Simpkins writes:Two days of talks between U.S. Treasury Secretary Timothy F. Geithner and Chinese officials culminated yesterday (Tuesday) with both parties reaffirming their confidence in the value of the dollar, and the viability of U.S. debt.
Tuesday, June 02, 2009
Fed Fears Treasury Bond market Collapse / Interest-Rates / Financial Crash
By: Global_Research
Robert Wenzel writes: The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday.
Tuesday, June 02, 2009
Quarterly $1 Trillion Monetization / Interest-Rates / US Debt
By: Jim_Willie_CB
The rising long-term USTreasury Bond yield has captured attention. The breakout chart for the 10-year Treasury was pointed out here when it rose over 3.1%, hardly a high level. In the first week of May, a target of 3.5% was cited, one easily surpassed. It zoomed to 3.75%, enough to create some waves in the stock market distracted and preoccupied by nonsensical Green Shoots talk on the psychological side and by falsified bank balance sheets on the accounting side. Bigtime stress has come to the USTreasury complex, a story difficult to mask and conceal, since it is at the epicenter of the credit markets.
Tuesday, June 02, 2009
Geithner & China on U.S. Treasury Bonds Sales Trip: Who Are You Fooling? / Interest-Rates / US Bonds
By: Axel_Merk
Treasury Secretary Tim Geithner’s trip to Asia has been heralded as a sales trip aimed at convincing the Chinese to keep buying U.S. Treasuries and thereby finance U.S. deficits. Such headlines are, in my humble opinion, an insult to the Chinese. Over and over again, we fall victim of the temptation to believe that Chinese leaders act in a vacuum, dictating policies out of a closet. Chinese leaders know very well the state of the Chinese, the U.S., and the world economy; they don’t need a sales pitch. So what’s the purpose of Geithner’s trip then?
Monday, June 01, 2009
U.S. Treasury Bond Market Oversold, Strong Seasonal Influences Supportive of a Rally / Interest-Rates / US Bonds
By: Levente_Mady
The bond market sold off another three and a half points during the course of last week before managing to recover to almost unchanged for the week. It was one of the strangest weeks of trading activity that I have seen in a long time. While the economic data offered no major surprises to drive substantial moves in yields, the focus appeared to be on the Treasury auction calendar.
Sunday, May 31, 2009
U.S.Treasury Bonds in the Eye of the Financial Storm / Interest-Rates / US Bonds
By: Money_and_Markets
Bryan Rich writes: The U.S. Treasury bond market has become the focal point of financial markets for the past several trading days. And when Treasury bonds move, so does the dollar.
Sunday, May 31, 2009
Government Bond Markets Plunge Under Weight of Debt Issurance / Interest-Rates / International Bond Market
By: Prieur_du_Plessis
Government bonds dominated action on financial markets during the past holiday-shortened week, as angst about inflation and massive issuance propelled yields to six-month highs in the US, Europe and Japan.
Bonds and other safe-haven assets such as the US dollar were out of favor as signs of a bottoming of global economies, albeit tentative, emboldened investors’ appetite for reflation trades like equities and commodities, including oil and precious metals.
Read full article... Read full article...
Friday, May 29, 2009
The Next Debt Landslide: Lessons from Andrew Carnegie / Interest-Rates / Credit Crisis 2009
By: Doug_Wakefield
Here we are, sitting in our homes or businesses reading commentary about the craziness of the world in which we live. While our collective response to rising markets has always been, “this is good,” never before have we been asked to trust so implicitly in ideas that are so far removed from the lessons of world history. While our political and financial leaders keep telling us that the capacity for debt production is eternal, Andrew Carnegie disagrees. If your friends don’t recognize that name, remind them that Carnegie had a little money in the 1800s. Carnegie Hall, Carnegie Mellon University, the Carnegie Endowment for International Peace, and the Carnegie Foundation for the Advancement of Education all bear his name.
Friday, May 29, 2009
Treasury Bond TLT ETF Rallying / Interest-Rates / US Bonds
By: Mike_Paulenoff
It is interesting that the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) is rallying with the commodity sector today. Yes, the TLTs are very oversold, so let’s not read too much into today’s strength. However, I am suspicious that the strength just might be a reflection of anticipated Fed activity and buying interest in the long end – to prevent a back-up in mortgage rates and/or a derailment of fledgling economic recovery regardless of an increase in inflationary perceptions.
Friday, May 29, 2009
Why Government Bonds Are No Longer A Safe Investment / Interest-Rates / International Bond Market
By: Money_Morning
Martin Hutchinson writes: With budget deficits on the rise and inflation almost certain to follow, it’s getting easier to see why British or U.S. government bonds are no longer a truly safe investment.
Friday, May 29, 2009
Which of these Global Bond Markets is the Most Bearish? / Interest-Rates / International Bond Market
By: Seven_Days_Ahead
The Technical Trader’s view:
TNotes:
Read full article... Read full article...
Thursday, May 28, 2009
Mortgage Market Locks Up as Interest Rates Soar / Interest-Rates / Mortgages
By: Mike_Shedlock
Yesterday 10 year treasury yields went soaring and the mortgage market literally seized up. Mark Hanson at the Field Check Group has this report that I can share.
Thursday, May 28, 2009
U.S. Treasury Bond Market Massacred; Yield Curve Steepest On Record / Interest-Rates / US Bonds
By: Mike_Shedlock
Bernanke cannot have his cake and eat it too. If the economy is recovering the yield curve should steepen. And steepen it has. The Yield Curve Is Steepest On Record.
Thursday, May 28, 2009
Quantitative Easing Pushes U.S. Treasury Bonds Into Secular Bear Market / Interest-Rates / US Bonds
By: Guy_Lerner
A monthly close over 3.432% confirms the secular trend change in the 10 year Treasury bond that I have been expecting and writing about for over 6 months. I am expecting yields pressures to persist for the next 12 months.
Monday, May 25, 2009
U.S. Treasury Bond market Severely Damaged / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was severely damaged last week. The theme from my previous note about the continued deterioration of the credit quality of government bonds and the consequent increase in real yields is certainly coming to fruition in swift fashion. It all started on Wednesday when the Standard and Poor’s rating agency issued a credit watch (with negative implications – i.e. potential downgrade from the best available AAA rating) for bonds issued by the United Kingdom – also known as Gilts.
Read full article... Read full article...
Sunday, May 24, 2009
Fed Admits No Credit Crisis Bailouts TARP Exit Strategy / Interest-Rates / Credit Crisis Bailouts
By: Mike_Shedlock
Federal Reserve Board Vice Chairman Donald Kohn is yapping complete nonsense about interest rates floors, the Fed's balance sheet, risk, exit strategies and other items.
Sunday, May 24, 2009
Bond and Foreign Exchange Markets Forcing Governments Debt Hand / Interest-Rates / US Debt
By: Michael_Pento
Last week Standard and Poor’s announced that the AAA credit outlook of the United Kingdom was lowered to “negative” from “stable.” The action caused many in the US, including Bill Gross, to impugn the United States’ AAA credit rating and wonder if the same devaluation should be applicable here.
Friday, May 22, 2009
Triple-A Credit Rating or Bond Markets Bust? / Interest-Rates / US Bonds
By: Andy_Sutton
If you take a short walk down memory lane, it will not take you very long to find the carcass of New Century Financial along the side of the road back in March 2007. It would be a full 12 months before the word recession would be mentioned in the US mainstream media and stock markets would roar into their all-time highs six months after the disintegration of New Century. Much of the early portion of the credit crisis as it was called focused on mortgages and after that, mortgage-backed securities. Wow, haven’t heard that term in a while, have we?
Friday, May 22, 2009
Investors Should Seek Maximum Safety in U.S. Treasury Bill ETF's / Interest-Rates / US Bonds
By: Money_and_Markets
Ron Rowland writes: I’ve just finished reading Martin’s new book, The Ultimate Depression Survival Guide. I highly recommend it. Martin says — and he’s exactly right — that the safest place in the world for your money is U.S. Treasury bills. In his book you’ll find a very handy list of money market funds that invest strictly in short-term Treasury securities: No commercial paper, bank notes, or other risky bonds.
Friday, May 22, 2009
U.S. Treasury Bond Bear Market Picking Up Steam? / Interest-Rates / US Bonds
By: Michael_Pollaro
At the risk of repeating myself, this author is bearish on long dated US Treasuries. Yes, despite the best efforts of the Fed to monetize the federal government’s ballooning borrowing needs and hold long rates at bay, this author is bearish on long dated US Treasuries.
Thursday, May 21, 2009
Government Debt Downgrades vs. Gold / Interest-Rates / Global Financial System
By: Mike_Shedlock
The word for today is "downgrade". Inquiring minds may wish to count the instances of downgrade in the following paragraphs.
UK and US Debt Face Downgrades
Thursday, May 21, 2009
Delusions of Endless Credit Something Very Bad is Going to Happen / Interest-Rates / Credit Crisis 2009
By: LewRockwell
Richard Daughty writes: James Howard Kunstler, famous author and speaker, opines, “For now, the ‘bottom’ is in” which took me completely by surprise! I mean, how could anybody in their Right Freaking Mind (RFM) think that “the bottom is in” as far as the economy is concerned?
Wednesday, May 20, 2009
Are We ‘Back from the Fiscal Abyss’ as Dallas Fed Claims? / Interest-Rates / Credit Crisis 2009
By: Lorimer_Wilson
Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas, was once one of the most expressive economist imaginable often using graphic and sensationalist words and expressions to get our attention when describing the ‘nightmarish predicament’ and ‘monstrous challenge’ that has finally engulfed us. It was only a year ago that he warned that a ‘frightful storm is brewing’ – ‘the mother of all financial storms’ – that could well plunge the U.S. government deeper into a ‘fiscal abyss’ causing the country to become submerged in a ‘vast fiscal chasm’. Fisher has not always been so dramatic in spite of saying recently ‘I am a Texan and Texans speak plainly and directly’ and he is not being very direct these days either.
Tuesday, May 19, 2009
Barrons on U.S. Treasury Bond Bubble Bursting / Interest-Rates / US Bonds
By: Guy_Lerner
This is the second cover story in 5 months for Barron's on the bursting of the bubble in Treasury yields. I have been closely following the yield on the 10 year Treasury since December, 2008, and I would agree that Treasury yields are ripe for a secular trend change. However, this won't be confirmed until there is a monthly close over 3.43% in yield.
Tuesday, May 19, 2009
Credit Crisis Freeze Thawing Following Massive Reflation Efforts / Interest-Rates / Credit Crisis 2009
By: Prieur_du_Plessis
Are the various central bank liquidity facilities and capital injections having the desired effect of unclogging credit markets and restoring confidence in the world’s financial system? This is precisely what the “Credit Crisis Watch” is all about - a review of a number of measures in order to ascertain to what extent the thawing of credit markets is taking place.
First up is the LIBOR rate. This is the interest rate banks charge each other for one-month, three-month, six-month and one-year loans. LIBOR is an acronym for “London InterBank Offered Rate” and is the rate charged by London banks. This rate is then published and used as the benchmark for bank rates around the world.
Read full article... Read full article...
Tuesday, May 19, 2009
U.S. Treasury Bonds Recovery from Deeply Oversold Levels / Interest-Rates / US Bonds
By: Levente_Mady
The bond market recovered from deeply oversold levels last week. Former support at 3% on the 10 Year Treasury Note will be the first major resistance level to watch. The yield curve on the other hand maintained its steepness as yields declined across the maturity spectrum. The economic data might look good from far but it is far from good so the main concern for the bond market is not an imminent recovery but a continued deterioration of the credit quality of government bonds as more and more of the excesses of this enormous credit bubble continue to migrate from the private to the public sector. Look for real yields to expand.
Read full article... Read full article...
Friday, May 15, 2009
Non-Existant U.S. Economic Recovery Bullish for Treasury Bonds / Interest-Rates / US Bonds
By: Mike_Shedlock
Given that Bernanke's green shoots are withering on the vine it was a sure bet that someone else would find another feel good term to describe what is essentially not happening. That term is "pre-recovery".
Thursday, May 14, 2009
Russia Cuts Interest Rates to 12%, 2nd Cut for May / Interest-Rates / Russia
By: Pravda
Russia's Central Bank cut key interest rates by half a percentage point to 12 percent to help the ailing economy and borrowers amid signs that inflation is slowing.Read full article... Read full article...
Wednesday, May 13, 2009
Credit Card Crisis as Huge Losses Cause Lending to Stop / Interest-Rates / Credit Crisis 2009
By: Mike_Shedlock
The credit card industry is in huge stress and things are about to get worse. Please consider Advanta Halts Credit-Card Lending Amid Surging Losses.
Tuesday, May 12, 2009
Here's How to Make Far More Money in Bonds than Stocks in 2009 / Interest-Rates / Investing 2009
By: DailyWealth
Porter Stansberry writes: In the past two weeks, I've spent a considerable amount of time researching the corporate bond market.I think it's one of the greatest opportunities to make a substantial amount of capital gains – and earn high income – you'll ever see.
Read full article... Read full article...
Monday, May 11, 2009
U.S. Treasury Bonds Break Below Short-term Support / Interest-Rates / US Bonds
By: Levente_Mady
The bond market gave up a major support level 2 weeks ago as the 10 Year Treasury Note moved decisively through 3%. Last week the bond market followed through with yields rising and prices falling further. The stocks for bonds switch also continued unabated. The yield curve also broke out of its trading range around 200 basis points to steepen toward the 230 level. Long term rates rose from 2.5% just before year end to 4.27% as of last weekend. That is a 71% rise in a little over 4 months. That is about double the measly 35% rise in the stock market. The record debt to GDP level maybe changing in its composition but it is not going away. Any “green-shoot” that might be fixing to sprout will be nipped in the bud by rising yields.
Read full article... Read full article...
Monday, May 11, 2009
Quantitative Easing Aka Counterfeiting Money / Interest-Rates / Quantitative Easing
By: LewRockwell
Michael S. Rozeff writes: I begin by describing quantitative easing in technical terms. I go on to describe what it means when a central bank and its government engage in quantitative easing. What is quantitative easing? It is a central bank’s "purchase" of government securities (bills, notes, bonds) directly from the government.
Friday, May 08, 2009
The Clock is Ticking on the U.S. Dollar and Bond Markets! / Interest-Rates / US Bonds
By: Ty_Andros
This is the beginning of the third edition of the “Fingers of Instability” series. The first edition was in the winter/spring of 2007, the second in the winter/spring of 2008, and now the third in the spring of 2009. The Fingers of Instability are ANALOGOUS to nature as seen in a sand pile. In August 2006, John Mauldin (John@frontlinethoughts.com) commented on a study of sand piles by three physicists who created a sand pile with a computer program that dropped one grain of sand on top of another to study critical states: NON-EQUILIBRIUM systems and uncertainty. When I read this, I immediately realized the debt bubbles throughout the world were an analogy to these studies and explained a great deal about the last three decades of debt creation. It reinforced my observations about Ponzi finance and asset-backed economies. It explained quite nicely what was transpiring and what to expect at some point in relation to PILES of DEBT and the FAKE prosperity and growth caused by EASY MONEY and runaway credit expansion.
Friday, May 08, 2009
Bursting Of The U.S. Treasury Bond Bubble: Not So Fast! / Interest-Rates / US Bonds
By: Guy_Lerner
The yield on the 10 year Treasury bond has spiked 10% in the past two weeks, and many are now jumping on the "bonds are the next bubble to burst" bandwagon. I was one of the first to be bearish on Treasury bonds calling for the likelihood of a secular trend change back in December, 2008 and a top in back in February, 2009. Higher Treasury yields are in our future, and it isn't a matter of if but when.
Thursday, May 07, 2009
Will Interest Rates Sky Rocket as Inflationary Pressures Build? / Interest-Rates / US Interest Rates
By: Money_Morning
Martin Hutchinson writes: U.S. Treasury bond yields are going higher - much higher. And that’s even before we factor in the likely effects of rising inflation, which we haven’t seen yet, but can certainly anticipate.
Wednesday, May 06, 2009
Inflation or Deflation: Who is the Winner? / Interest-Rates / US Bonds
By: Q1_Publishing
In this environment, we anticipate that inflation will remain low. Indeed, given the sizable margin of slack in resource utilization and diminished cost pressures from oil and other commodities, inflation is likely to move down some...
Wednesday, May 06, 2009
Bernanke Warns of Danger of Credit Crisis Relapse / Interest-Rates / Credit Crisis 2009
By: Mike_Shedlock
While Fed Chairman Ben Bernanke Warns of a Credit Market 'Relapse', Congress is increasingly willing to stand up to the Fed Chairman.Read full article... Read full article...
Wednesday, May 06, 2009
U.S. Treasury Bonds Break Below Support / Interest-Rates / US Bonds
By: Levente_Mady
The bond market gave up a major support level last week as the 10 Year Treasury Note moved decisively through 3%. The stocks for bonds switch continued unabated, where it stops, nobody knows. As the short end remains anchored, any back-up in long term rates causes the yield curve to steepen. This is a good news – bad news story in the present environment. It is excellent news for financials that can still afford to borrow short and lend long as they can earn a significant carry on that trade.
Tuesday, May 05, 2009
Some Corporate Bonds Looking Better than U.S. Treasuries / Interest-Rates / Corporate Bonds
By: Money_and_Markets
Nilus Mattive writes: I think Mike Larson did a great job outlining the dangers of longer-term U.S. Treasury bonds in his past two Money & Markets columns. And like Mike, I continue to believe there is more pain ahead for that category of bonds.
Monday, May 04, 2009
Sorry Ben Bernanke, You Don’t Control Long Term Interest Rates / Interest-Rates / US Interest Rates
By: Michael_Pento
It is disappointing to discover that the Harvard- and M.I.T.-educated Ben Bernanke did not learn while attending school that long-term interest rates must be set by the free market. Belatedly, the Chairman of the Federal Reserve is about to learn this valuable and costly lesson because these rates cannot be manipulated lower by any central bank for a great length of time.
Friday, May 01, 2009
U.S. Treasury Bond Debt Bubble Bursting! / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: You’d think that after the dot-com bubble … the housing bubble … and the bubbles in commercial real estate and private equity, investors would have learned their lesson.
Nope! They did the same stupid things this fall …
Read full article... Read full article...
Tuesday, April 28, 2009
Bond Vigilantes are Fighting the Fed By Pushing Up Yields / Interest-Rates / US Bonds
By: Ashraf_Laidi
Cant' fight the Fed? Bond vigilantes are fighting the Fed and winning at bidding up bond yields. Short of another shock-&-awe policy announcement this Wednesday, the FOMC decision is likely to generate fresh dollar strength against risk currencies (non-JPY).
Tuesday, April 28, 2009
Falsifying Bank Balance Sheets / Interest-Rates / Credit Crisis Bailouts
By: Professor_Emeritus
Our title is borrowed from a caption of the Chicago economist and monetary scientist Melchior Palyi (1892-1970) writing on the fiscal and monetary legerdemain of the U.S. government in his Bulletin #401, dated February 27, 1960, as follows.
Faking balance sheets legalized
Read full article... Read full article...
Monday, April 27, 2009
Obama Says Short US Treasuries, an Update / Interest-Rates / US Bonds
By: Michael_Pollaro
Back in March, I penned this essay, Obama Says Short US Treasuries, making the bear case for the US government’s fiscal position and the Treasury long bond: http://mises.org/story/3364
Then I wrote this follow-up, Inflection Point in US Treasury Bond Interest Rates Near: http://www.marketoracle.co.uk/Article9294.html
Monday, April 27, 2009
U.S. Treasury Bonds Fall Despite Supportive Fundamentals / Interest-Rates / US Bonds
By: Levente_Mady
The bond market is testing the line in the sand drawn by the Bernanke Fed at 3% on the 10 Year Treasury note yield. While stocks held their own with the Nasdaq closing positive for the 7th week in a row, bonds continued to trade in a leaky fashion. There was all sorts of chatter about the government stress tests being flunked by most financial institutions, but until we see an official announcement, rumours of across the board insolvencies remain just that: rumours!
Thursday, April 23, 2009
LIBOR Interest Rate Nudges Below 1.5% On Quantitative Easing and Price Deflation / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The 3 Month Inter bank Money Market Interest Rate (LIBOR) drifted below 1.5% for the first time in over 50 years despite the budget busting deficit budget delivered on Tuesday. The prime drivers of lower LIBOR rates are the Bank of England providing near unlimited liquidity to the Banking System coupled with the 0.5% base rate coupled with Quantitative Easing (monetization of debt) with the prime aim of driving down interest rates across the curve i.e. from the short end to the long-end. This is further reinforced by the deflationary driven sentiment following RPI of -0.4% for March.
Tuesday, April 21, 2009
UK Savings Interest Rates in Free Fall, Pensioners Pay the Price / Interest-Rates / UK Interest Rates
By: MoneyFacts
Savings rates are still in freefall with the average no notice rate currently at 0.64%, just above bank base rate.The recent published inflation figures shows that the real return after basic tax and inflation on an average no notice savings account is 1.06 per cent for RPI, but is at a worrying minus 2.24 per cent for CPI.
Sunday, April 19, 2009
U.S. Treasury Bonds Now 2 Standard Deviations Cheaper than Stocks / Interest-Rates / US Bonds
By: Levente_Mady
The bond market continues to chop around aimlessly. The market was stronger most of the week, but a 2 point sell-off on Friday destroyed all the gains and then some. The fundamental news turned considerably weaker – even in relation to expectations - but the stock market managed to show further gains for the 6th week in a row now. That generated further outflow from bonds to stocks. Based on the Fed model which compares the 10 year Treasury note to the dividend yield in the stock market, stocks made a close to 4 standard deviation move relative to bonds in a little over one month.
Read full article... Read full article...
Tuesday, April 14, 2009
Bernanke's Un-shrinkable Fed Balance Sheet / Interest-Rates / Money Supply
By: Michael_Pento
As he stated again clearly today, the Chairman of the Federal Reserve has deluded himself into thinking that when the time comes, he will be able to shrink the size of the Fed’s balance sheet and reduce the monetary base with both ease and impunity. He also has deluded himself into thinking inflation will be easily contained.Read full article... Read full article...
Tuesday, April 14, 2009
What to Do When the U.S. Treasury Bond Market Falls / Interest-Rates / US Bonds
By: DailyWealth
Tom Dyson Writes: Jesse Livermore called it "the path of least resistance." Livermore is probably the greatest trader that ever lived. He made his first fortune in the stock market as a teenager... in the late 1890s. The book of his trading techniques – Reminiscences of a Stock Operator – is the best book on stock market trading ever written. You shouldn't buy another stock until you've read it. (Just don't copy his money-management techniques. By overtrading, Livermore made and lost several multimillion-dollar fortunes in his lifetime.)Read full article... Read full article...
Monday, April 13, 2009
Economic Weakness Supportive of Bond Prices / Interest-Rates / US Bonds
By: Levente_Mady
Before the start of this week’s column, I would like to make a quick announcement. I am not affiliated with MF Global any longer, so please note the new contact email below if you wish to reach me. The old email address and phone number that was published in previous editions is no longer functional.Read full article... Read full article...
Friday, April 10, 2009
How To Take Advantage of Low Mortgage Interest Rates / Interest-Rates / Mortgages
By: Mike_Shedlock
President Obama declares "good news" and says Timing right for millions to refinance . Declaring "good news" in the midst of an economic meltdown, President Barack Obama on Thursday urged families to take advantage of near-record low mortgage rates by refinancing their home loans.
Read full article... Read full article...
Thursday, April 09, 2009
UK Interest Rates on Hold, the Easing of Quantitative Easing? / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
UK Interest rates are expected to be kept on hold at today's MPC meeting at the record low of 0.5%, which is indicative of the FAILURE of monetary policy to counter the economic slump as the economy started to fall off the edge of the cliff during the summer months of 2008 in the wake of a housing market in freefall as bank after bank teetered on the edge of bankruptcy requiring literally a £1 trillion tax payer guarantee and capital injection bailouts to prevent financial armageddon. Read full article... Read full article...
Tuesday, April 07, 2009
Corporate Bond Default Rate Highest Since Great Depression / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
Moodys says Default Rate Surges to Highest Since Depression .Thirty-five companies defaulted in March, the highest number in a single month since the Great Depression, according to Moody's Investors Service.
Read full article... Read full article...
Monday, April 06, 2009
Fed's Flawed Strategy of Buying Long Dated Treasuries to Force Rates Lower / Interest-Rates / US Bonds
By: Mike_Shedlock
Bernanke thinks he can manipulate treasury yields by purchasing long dated treasuries. He can't. The market is simply too big. Please consider Treasurys slide after Fed purchases .Read full article... Read full article...
Saturday, April 04, 2009
Debt is a drug...Danger of Overdose? / Interest-Rates / US Debt
By: Andrew_Butter
Kids are diff-erent today, I hear evry mother say...but there's a little yellow pill...Doctor please, some more of these...outside the door, she took four more. (Rolling Stones: Mother's Little Helper).
The problem with drugs is you develop a tolerance to the thrill part, without necessarily developing a tolerance to the addictive part.
Read full article... Read full article...
Wednesday, April 01, 2009
U.S. Debtor Meets G20 Creditors at the Dollar's Funeral / Interest-Rates / US Debt
By: Jim_Willie_CB
An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, US Dollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.Read full article... Read full article...
Wednesday, April 01, 2009
Commercial Real Estate Market in Limbo as Lenders Ignore Defaults / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
There is a new twist in commercial real estate action today. Lenders are ignoring defaults of $billions on commercial real estate as if nothing happened, praying that credit conditions will improve. Read full article... Read full article...
Tuesday, March 31, 2009
Bank Losses Spreading as Interest Rate Derivatives Start Imploding / Interest-Rates / Credit Crisis 2009
By: Money_and_Markets
Martin Weiss writes:For the first time in history, U.S. banks have suffered large, ominous losses in a giant sector that, until now, they thought was solid: bets on interest rates.
In a moment, I'll explain what this means for your savings and your stocks.
Read full article... Read full article...
Tuesday, March 31, 2009
Current Financial Crisis Russia Debt Default Risk Lower than 1998 / Interest-Rates / Credit Crisis 2009
By: Pravda
The current economic crisis will be a lot harder than the financial collapse of 1998, a recent report from the World Bank said. WB experts believe that Russia will have to deal with severe problems as a result of the crisis. The economic growth in the country will decline considerably and the recovery will take a much longer time in comparison with the critical period of 1998, when Russia declared default.Read full article... Read full article...
Monday, March 30, 2009
The Thinking Behind the Stimulus and Bailout Programs / Interest-Rates / Economic Stimulus
By: John_Mauldin
It is important to understand the thinking of those who are in fact making the decisions at the Fed and Treasury. In today's Outside the Box, Paul McCulley, Managing Director at PIMCO, gives us some insight into the thinking that is driving the massive stimulus and bailout programs. Whether or not you agree, it is important to have a handle on what is actually happening and the thinking behind it.Read full article... Read full article...
Saturday, March 28, 2009
The SEVEN "Values" of Toxic Assets FAQ / Interest-Rates / Credit Crisis 2009
By: Andrew_Butter
The Hiesenburg Uncertainty Principle says the more you know about the weight of something the less you know about how fast it's moving. A toxic asset follows the same principle, which is presumably why investment banks used to hire rocket scientists. Read full article... Read full article...
Saturday, March 28, 2009
Do Bonds Beat Stocks Over the Long Run? / Interest-Rates / US Bonds
By: John_Mauldin
Why Bother With Bonds?
So Then, Bonds for the Long Run?
P/E Ratios at 200? Really?
Mark-to-Market Slip Slides Away
Housing Sales Improve? Not Hardly
Investors, we are told, demand a risk premium for investing in stocks rather than bonds. Without that extra return, why invest in risky stocks if you can get guaranteed returns in bonds? This week we look at a brilliantly done paper examining whether or not investors have gotten better returns from stocks over the really long run and not just the last ten years, when stocks have wandered in the wilderness. This will not sit well with the buy and hope crowd, but the data is what the data is. Then we look at how bulls are spinning bad news into good and, if we have time, look at how you should analyze GDP numbers. Are we really down 6%? (Short answer: no.) It should make for a very interesting letter.
Read full article... Read full article...
Saturday, March 28, 2009
How the Free Market Mortgage Bond Scam Works / Interest-Rates / Credit Crisis Bailouts
By: Submissions
Michael Hudson writes: Newspaper reports seem surprised at how high banks are bidding for the junk mortgages that Treasury Secretary Geithner is now bidding for, having mobilized the FDIC and Fed to transfer yet more public funds to the banks. Bank stocks are soaring – thereby bidding up the Dow Jones Industrial Average, as if the “financial industry” really were part of the industrial economy. Read full article... Read full article...
Friday, March 27, 2009
U.S. Treasury Bonds Heading for Day of Reckoning / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: The U.K. Treasury held a bond auction on Wednesday morning. On the offer were 1.75 billion pounds ($2.55 billion ) worth of 40-year “Gilts” — the U.K. equivalent of U.S. Treasuries. There was just one problem …
Buyers went on strike! They offered to purchase just 1.63 billion pounds ($2.37 billion) of debt.
Read full article... Read full article...
Thursday, March 26, 2009
Quantitative Easing Begins; "Operation Twist" Revisited / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
Quantitative easing in the US has begun. The Fed Buys $7.5 Billion of Debt to Cut Borrowing Costs . The Federal Reserve bought $7.5 billion of Treasuries in the first outright purchase of U.S. government debt by the central bank to keep consumer borrowing costs low since the 1960s. It is the first step in a six-month program to buy up to $300 billion in Treasuries.
Read full article... Read full article...
Wednesday, March 25, 2009
U.S. Treasury Bond Yields: Government Intervention Breeds Uncertainty / Interest-Rates / US Bonds
By: Guy_Lerner
For many months, I have been tracking US Government 10 year Treasury bonds essentially stating that they have topped out. In my most recent article on Treasury bonds, I stated: "the upside for Treasury bonds is limited, and there is a high degree of certainty that a new secular trend is developing that favors higher yield pressures. " Read full article... Read full article...
Wednesday, March 25, 2009
How China Will Deal with the Growing U.S. Debt Mountain / Interest-Rates / US Bonds
By: Money_Morning
William Patalon III writes: Although there's a veritable laundry list of obstacles that could blunt the U.S. government's ongoing economic turnaround efforts, its single-biggest challenge may come from its single-biggest creditor - China.
When China announced a new array of stimulus measures earlier this month , this very important plan was overshadowed by China Premier Wen Jiabao's concerns about the United States' quickly growing debt load.
Read full article... Read full article...
Tuesday, March 24, 2009
Fed Debt Monetization- Creating Credit Out of Thin Air / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
Last week the Fed announced that it would purchase $300 billion of longer-maturity Treasury securities. The mainstream media got all excited, talking about the Fed "printing money." But the Fed figuratively "prints money" or creates credit whenever it acquires assets - loans or investments. For example, when the Fed purchases a mortgage-backed security, it pays for the security simply by crediting the deposit (reserve) account of the security seller's bank. Read full article... Read full article...
Monday, March 23, 2009
U.S. Treasury Bond Market Jolted by Panic Mode Quantitative Easing / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was jolted up by the “surprise” (not entirely for the readers of this column) announcement that the Fed will be buying not only additional boatloads of Mortgage Backed Securities and Agency bonds, but also up to $300 Billion Treasury paper during the next 6 months in order to keep a lid on interest rates for the foreseeable future. As previously discussed, the Fed has already taken the Fed Funds Rate down to zero, so they are “all in” on that front. Now they opened a new kettle of fish by joining the Bank of England and the Bank of Japan in what is called Quantitative Easing – i.e. purchasing Treasury bonds in the Fed's case. Read full article... Read full article...
Sunday, March 22, 2009
Fed illusion as Rising U.S. Bond Prices Cancelled Out by Plunging Dollar / Interest-Rates / US Bonds
By: Clive_Maund
Last week a very dangerous precedent was set when the Fed announced that it is going to start overtly intervening to backstop the ailing Treasury market. The market's verdict on this announcement was immediate and unequivocal. While Treasuries rallied sharply as one might expect, the dollar cratered and gold staged a dramatic turnaround to close sharply higher. The reason that this precedent is so dangerous is that once they start monetising this debt, which means creating money to buy that portion of newly created Treasury debt that cannot be sold off, there will be no end to it - they will eventually find themselves buying more and more of it, as foreign buyers continue to withdraw, deterred by a combination of pitifully low yields and any prospective capital gain being wiped out by the continued decline in the dollar that must transpire as a result of diluting the currency by creating money to absorb unsold Treasury paper. Read full article... Read full article...
Sunday, March 22, 2009
U.S. Treasury Bond Yields Reach the Bottom, Upward Pressure Starts / Interest-Rates / US Bonds
By: Donald_W_Dony
The Fed has done everything possible to stimulate the economy by slashed interest rates to record lows, injecting billions of dollars into the financial system and even recently saying it will begin a program to buy up to $300 billion in government treasuries. All of these efforts have driven bond yields down to record lows. Models are now indicating that yields are on the rise.Read full article... Read full article...
Sunday, March 22, 2009
US Bond Market Crash and the Stealth Return of Hyperinflation / Interest-Rates / HyperInflation
By: Eric_Chevrette
Sometimes it can happen that analyzing financial markets is as much a disappointment as cooking a nice meal: in plain words, you spend several hours to cook a fine recipe with a heavy load of good intention in your mind, but you mishandle your work in the oven and you don't dare serve it to the table but with big sorry words to your guests; that's somehow what did happen with the Gold2XAU ratio study which didn't stand the oven of reality more than 2 days; when the Gold2XAU ratio closed at 6.86 on March 18 (breaking below red wave 4 from chart #2 in “Gold and miners throw their full weight into the stocks bear market?”), you knew immediately that the Gold and miners case had to be tackled from another angle of view. Read full article... Read full article...
Sunday, March 22, 2009
Fed Hits Panic Button and Signals Trillions of Dollars Will be Printed to Buy Bonds / Interest-Rates / Quantitative Easing
By: Prieur_du_Plessis
Phew - what a week! What an announcement!
The Federal Open Market Committee (FOMC) on Wednesday left the Fed funds range unchanged at zero to 0.25%, but stunned the financial markets with an announcement that it would purchase up to $300 billion in longer-term Treasuries over the next six months.
Read full article... Read full article...
Sunday, March 22, 2009
Fed Delivers a Gift to Bond Bulls with More to Come / Interest-Rates / US Bonds
By: Professor_Emeritus
On Wednesday, March 18, another handsome gift was delivered by the Fed to the bond bulls. It was the announcement that the Open Market Committee has made a unanimous decision for the central bank to buy $300 billion in long-term Treasury bonds and notes over the next six-month period. The yield on the 30-year Treasury bond immediately fell from 3.8% to 3.5%, while the yield on the benchmark 10-year Treasury note fell more: from 3% to 2.53%, increasing the price of the note by 42/32 from 9726/32 to 10128/32, the biggest one-day rise in years. The gift of risk-free profits is granted to the bond bulls through courtesy of the Fed, in telling them in advance about its intention of buying long-dated government debt. Read full article... Read full article...
Sunday, March 22, 2009
Fed’s $1 Trillion Debt-Buying Plan Loosens Lending and Drains the Dollar / Interest-Rates / Quantitative Easing
By: Money_Morning
Jason Simpkins writes: While the U.S. Federal Reserve's plan to buy more than $1 trillion in debt has helped unfreeze the credit markets, it has also effectively capped U.S. Treasury yields and undermined the dollar. And that's caused commodities to soar as currency speculators and safe-haven investors head for higher ground. Read full article... Read full article...
Sunday, March 22, 2009
Fed Launching Trillion Dollar Bond Market Lifeboat Before the Ship Sinks / Interest-Rates / US Bonds
By: Paul_Craig_Roberts
On March 19 the New York Times reported : "The Fed said it would purchase an additional $750 billion worth of government-guaranteed mortgage-backed securities, on top of the $500 billion that it is currently in the process of buying. In addition, the Fed said it would buy up to $300 billion worth of longer-term Treasury securities over the next six months." Read full article... Read full article...
Saturday, March 21, 2009
The Federal Reserve: The Greatest Scam in History / Interest-Rates / Central Banks
By: Bob_Kirtley
We first posted this article on 13th August 2007 when it appeared to us that the US Dollar along with the economy was heading into such dangerous waters that gold would be the beneficiary. At the time gold was trading at around $670/oz and it closed yesterday at $960 for a gain of $290 or 43.2%. Yesterday was the first time that we have seen the ‘ C ‘ word used as the Federal Reserve announced that it would be buying back $300 billion in longer-term Treasuries in order to assist the economic recovery. This move to buy these Treasuries is regarded by many as a last resort or a sign of panic as the turmoil in the financial markets reaches a crisis point.Read full article... Read full article...
Friday, March 20, 2009
Fed Rings the Mother of all Inflationary Bells / Interest-Rates / Inflation
By: Peter_Schiff
There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril. The bell's reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine.Read full article... Read full article...
Friday, March 20, 2009
Fed Debt Monetization Moves Spark Refi Madness / Interest-Rates / Quantitative Easing
By: Money_and_Markets
Mike Larson writes: The Federal Reserve has done it now. In poker terms, it's gone “all in.” Specifically, the Fed said this week that it will ramp up its purchases of Fannie Mae and Freddie Mac Mortgage Backed Securities (MBS) from $500 billion to a whopping $1.25 TRILLION in the coming months. The Fed is also going to double its purchases of Fannie Mae, Freddie Mac, and Federal Home Loan Bank bonds to $200 billion from $100 billion. Read full article... Read full article...
Thursday, March 19, 2009
Central Banks Detonate the Quantitative Easing Monetary Nuclear Option / Interest-Rates / Quantitative Easing
By: Gary_Dorsch
Desperate times call for desperate measures. As the global “credit crunch” has grown increasingly severe, central bankers are examining the Great Depression of the 1930's for possible parallels that are relevant to today's situation. Most worrisome, is the synchronized meltdown of the global stock markets, which had wiped-out $32-trillion of wealth, on top of another $10-trillion in losses in real estate. Read full article... Read full article...
Thursday, March 19, 2009
The US Fed To Print Money / Interest-Rates / Quantitative Easing
By: PaddyPowerTrader
Shock and awe is back in vogue. Yesterday was a landmark day in this crisis with the Fed going all-in (see below) after flip flopping about on the merits of quantitative easing (QE). But now it's all hands to the eletronic printing presses as they clearly don't believe that Geithner's TALF could do the heavy lifting required. Stock rallied as VIX declined back to 40 (the floor of its recent range). But is QE a sign of desperation? It is a serious negative for the EUR/USD , which kissed 1.3536 overnight. Gold of course bounced as the textbooks say this will ultimately be inflationary. But it beats living in caves. Read full article... Read full article...
Wednesday, March 18, 2009
Bernanke Fights Debt Deflation By Printing Money / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
We are in the middle of a grand experiment. Bernanke upped the ante today in his foolish quest to beat deflation. Please consider the FOMC Press Release.Read full article... Read full article...
Wednesday, March 18, 2009
US Treasury Bonds As Competitor Safe Haven For Gold / Interest-Rates / US Bonds
By: Jim_Willie_CB
Dogs and cats are mortal enemies in the animal world. In the insect world, ants and termites are mortal enemies. In the financial world, gold and USTreasury Bonds are mortal enemies. They compete for the revered role of safe haven for funds. In today's day and age, with numerous storms, some unprecedented, safe haven is especially valuable. One of the most important jobs for the US Federal Reserve, JPMorgan (its agent), and the US Congress is to create the impression that USTreasurys are indeed not only safe, but beyond reproach and free from any hint of default potential. In recent months, with a failure of many important US-based financial engines, and sharp economic decline, made more complex by mammoth commitments from the USGovt on rescues and stimulus, the pristine image of USTreasurys has suffered from severe tarnish. Read full article... Read full article...
Tuesday, March 17, 2009
The Real Ponzi Scheme– Unreal Interest Rates / Interest-Rates / US Interest Rates
By: Rob_Kirby
Recently, former chairman of the Federal Reserve – Alan Greenspan – penned an editorial, “ The Fed Didn't Cause the Housing Bubble ”. It was published in The Wall Street Journal March 11, 2009 .
In the article Mr. Greenspan attempts to blame today's global financial crisis on “too-low mortgage rates” between 2002 and 2005 which led to a real estate bubble.
Read full article... Read full article...
Sunday, March 15, 2009
Will Global Quantitative Credit Easing Work? / Interest-Rates / Quantitative Easing
By: Prieur_du_Plessis
The Wall Street Journal: New fears as credit markets tighten
“The credit markets are seizing up again amid new anxieties about the global financial system.
“The fear and uncertainty that sent stocks to 12-year lows is now roiling the market for corporate bonds and loans, which have given back much of the gains they chalked up earlier in the year.
Read full article... Read full article...
Sunday, March 15, 2009
Swiss Quantitative Easing, Where are the Safe Havens Now? / Interest-Rates / Quantitative Easing
By: Michael_Pollaro
Where or where have our safe havens gone? Ah yes, there is always the Swiss Franc, right? Not any more!
First, the Swiss National Bank (SNB) sold off its gold reserves. Next, it began cutting interest rates. Later it announced a bias towards “quantitative easing.” Then we learn it's even willing to loosen bank secrecy rules. Now, this headline from MarketWatch:
Read full article... Read full article...
Saturday, March 14, 2009
Bond Market Fails to Follow Stock Markets Sharp Rally / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded sideways last week in spite of the sharp rally in equities. The market received the bond auctions quite smoothly as it was supported by further rumours of potential Federal Reserve purchases of Treasury securities. Since the US Federal Reserve has already lowered their benchmark to the 0-0.25% range, there is not much room left for them to stimulate the economy with further rate cuts. As a result, bond traders are expecting the Fed leaders to announce a Treasury bond purchase program as early as at their next policy meeting on Wednesday, March 18. Most market watchers are familiar with the “Greenspan put” that got the economy off the hook every time it encountered a bump in the road.Read full article... Read full article...
Friday, March 13, 2009
New Recovery Highs Expected in UltraShort TBT T-Bond ETF / Interest-Rates / US Bonds
By: Mike_Paulenoff
My near and intermediate term work indicates strongly that the upside pivot low at 44.01 last Friday (3/06) in the ProShares Ultrashort 20+ Year T-Bond ETF (NYSE: TBT) completed the corrective period off of the 2/09 recovery rally high at 49.86. If that proves to be the case, then all of the action this week- the climb to 48.20 on Wed., followed by the pullback yest. and today- represent the start of a new upleg that should propel the TBT to new recovery highs. Read full article... Read full article...
Thursday, March 12, 2009
Disintegrating Financial System: Haircut Time for Bond Holders / Interest-Rates / US Bonds
By: Mike_Whitney
"The only function of economic forecasting is to make astrology look respectable." John Kenneth Galbraith
When George Soros recently said that the financial system had "effectively disintegrated", it caused quite a flap. But Soros was not exaggerating. The financial system has disintegrated. What we are experiencing now is just the fallout from that event. This is easier to understand by using an analogy. Imagine watching the demolition of a hundred-story skyscraper. After the explosives detonate and the building implodes, the chunks of debris and the shattered glass begin to fall to the ground below.
Read full article... Read full article...
Thursday, March 12, 2009
Global Zero Interest Rates Policy Means Spend Now Pay Later / Interest-Rates / Global Financial System
By: Mike_Shedlock
ECB President Trichet has effectively cut its interest rate policy to .5% by agreeing to provide banks an unlimited supply of cash. Let's tune in with a look at ECB Approaches Zero Rates by Stealth With New Weapon .
Read full article... Read full article...
Monday, March 09, 2009
U.S. Treasury Bonds Short-term Bounce Continues / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded up last week. All you little traders out there who have long positions in the bond market, let's all say a big thank you to the Bank of England – which not only lowered their benchmark rate to a new all time low of 0.50%, but also loudly trumpeted that they will be in the market buying long term Gilts (UK Government bonds) in the not too distant future. This announcement caused a close to 50 basis point rally in the 10 year Gilts and rallies of lesser magnitude in other government bond markets. Supply will be a front page item again in the US as the Treasury will be conducting what used to be a quarterly auction cycle for the second month in a row. The market will need to deal with new supply of 3, 10 and 30 year bonds as the week unfolds. Read full article... Read full article...
Saturday, March 07, 2009
Inflection Point in U.S. Treasury Bond Interest Rates Near? / Interest-Rates / US Interest Rates
By: Michael_Pollaro
Pity the tortured Treasury bond buyer; what to do, what to do. These headlines from Bloomberg news chronicle the struggle. On March 4th :
Treasuries Fall on Looming Auctions, Deficit Funding Concern
By Susanne Walker
March 4 (Bloomberg) – Treasuries fell as stocks rose and traders speculated the U.S. will sell $60 billion of notes and bonds next week after the worst two months of losses in government debt in five years
Saturday, March 07, 2009
Hedge Funds Profit from Ratings Agencies AAA Rated Junk Bonds / Interest-Rates / Corporate Bonds
By: John_Mauldin
- Unintended Consequences
- The I-Factor
- Rating Agencies Gone Wild
Rules have consequences. And sometimes they have unintended consequences. If I told you that the US government was going to give multiple tens of billions of taxpayer dollars to hedge funds and private investors, you would justifiably not be happy. I think the word angry would come to mind. But that is exactly what is happening, as a result of rules that were written for a time and place seemingly long ago and far, far away. Further, we are looking at potentially much larger sums being lost in the bank bailout (can we say hundreds of billions?), a reduced lending capacity at banks and, in general, a worsening of the very problems at the core of the crisis.
Read full article... Read full article...
Thursday, March 05, 2009
Bank of England Ignites Quantitative Inflation / Interest-Rates / Credit Crisis 2009
By: Nadeem_Walayat
Economic Shock and Awe as Interest Rates are cut to 0.5% coupled with £75 Billion conjured out of thin air by Mervyn King Waving his "Central Bank Magic Wand". The government through what should be more accurately termed as "Quantitative Inflation" than "Quantative Easing" sanctioned £75 billion in the initial print run which will have a multiplier effect through fractional reserve banking and leverage of anywhere from between X10 to X20 the amount depending on how it filters through the economy, therefore £75 billion increase in the money supply implies the supply of credit should jump by anywhere between £750 billion to £1.5 trillion, but more probably in the region of X10 at £750 billion over the next few months, with expectations of several more doses of "Quantitative Inflation" during 2009 that seeks to devalue the British Pound towards parity to the U.S. Dollar.Read full article... Read full article...
Tuesday, March 03, 2009
U.S. Treasury Bond Market Outlook / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded down last week. The market action was quite disappointing for a number of reasons. The fundamental data remains dismal and considerably weaker than consensus forecasts. Pressure on the stock markets has not eased up one bit. The S&P500 Stock Index broke key support at 800 a couple of weeks ago and it ended the month of February below the lows of last November. Needless to say stocks had a brutal 2008, a record January drop to start 2009 and then followed up with the worst February performance on record. Read full article... Read full article...
Monday, March 02, 2009
U.S. Bond Market Performance Analysis / Interest-Rates / US Bonds
By: Richard_Shaw
For a while after the Q4 2008 simultaneous crash of nearly all forms of assets, bonds recovered and stocks did not. However, of late, bonds are not so strong. Read full article... Read full article...
Saturday, February 28, 2009
Obama Says Short U.S. Treasuries / Interest-Rates / US Bonds
By: Michael_Pollaro
Bank bailouts, homeowner bailouts, auto industry bailouts, and now massive stimulus packages; the Federal Government spending list goes on and on. The Federal Deficit for this fiscal year is projected by Goldman Sachs to be as high as $2.5 trillion. That's 5.5 times the fiscal 2007 Federal Deficit and 1.5 times Gross U.S. Savings. A $2.5 trillion deficit will create quite a waterfall on this graph, don't you think:Read full article... Read full article...
Tuesday, February 24, 2009
U.S. Treasuries on the Move / Interest-Rates / US Bonds
By: Mike_Paulenoff
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) gapped to the upside this morning ahead of Bernanke's testimony, likely expecting some supportive news, such as the Fed intending to buy Treasury paper to foster lower mortgage rates. As of yet, longs either are disappointed in Bernanke's prepared text or are so uncertain that they are taking profits as the TLTs test prior resistance at 106.50/60. Whatever the actual reason, as long as the TLTs do not break and sustain beneath 104.80, my technical work encourages me to remain long.Read full article... Read full article...
Monday, February 23, 2009
U.S. Bond View Positive Despite Higher than Expected Inflation / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded higher last week. The fundamental data remains weak and pressure on the stock markets lent renewed support for bonds. Supply remains a topic of conversation for traders as the Treasury will be auctioning close to a total of another $100 Billion 2, 5 and 7 Year Notes next week. If interest remains as solid as it was on the Quarterly refunding last week, then bonds should manage to continue to hold the support levels that were tested and held during the recent down-trade.Read full article... Read full article...
Wednesday, February 18, 2009
Key Market Indicater Says Sell Gilts, Buy Stocks / Interest-Rates / Investing 2009
By: FleetStreetInvest
Watch out! The next bubble could be about to burst. This also signals a great opportunity for smart investors – because a key indicator shows that now's a fantastic time to get into stocks. In the past 24 months, emerging markets, housing and commodity bubbles have all popped with painful impact. Now, the same could happen again, but this time in the government bond market.
Read full article... Read full article...
Tuesday, February 10, 2009
Treasury Bonds Trade Lower on Increasing Supply / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded down again last week, as the main driver appears to be the supply side of the equation. As expected, setting up for the Quarterly Treasury refunding kept a lid on the market even as the economic landscape continues to deteriorate. Traders will have to deal with $32Billion 3 Year Notes on Tuesday, $21Billion 10 Year paper on Wednesday and $14Billion 30 Year Bonds on Thursday. The key is normally in the second leg of these 3 day auctions, so if the 10 Year tranche is well distributed, that could provide a bit of relief for this market that has seen nothing but trouble during the first 5 weeks of 2009.Read full article... Read full article...
Monday, February 09, 2009
Investment Strategy Favours Corporate Bonds / Interest-Rates / Corporate Bonds
By: Paul_J_Nolte
The worst employment report in well over a decade and the market jumps nearly 3% - could stocks be whistling past the graveyard or is there something more that we're missing? To be sure the news is bad and is going to be bad for the next couple of months as the reports are referencing the worst part of the severe recession. Job cuts seem to go hand in hand with earnings reports, housing remains dormant and even new home construction is well below “replacement” rates. Read full article... Read full article...
Monday, February 09, 2009
Stimulus Financing Faces Major Difficulties as Treasury Bond Market Shows / Interest-Rates / Economic Stimulus
By: Money_Morning
Martin Hutchinson writes: As I watch the $900 billion stimulus bill wind its way through Congress, knowing this will be piled atop the estimated 2009 deficit of $1.19 trillion, the longtime banker in me keeps asking the same worrisome question: How the devil are they going to finance all this rubbish?
A report released Wednesday by the U.S. Treasury Department's Borrowing Advisory Committee on the government's borrowing plans gave me the answer I expected: With great difficulty.
Read full article... Read full article...
Sunday, February 08, 2009
Bad Debt Crisis: Inadequate Loan Loss Reserves at Numerous Minnesota Banks / Interest-Rates / Credit Crisis 2009
By: Mike_Shedlock
At Minnesota banks, bad loans are piling up much faster than the amount of money being set aside to cover them. The StarTribune takes a look at the problem in State's banks below norm in reserves . Despite repeated warnings of economic trouble ahead, banks in Minnesota have failed to keep pace with the rise in bad loans. Among those banks, the ratio of past-due and nonaccrual loans -- or loans for which payment is in doubt -- as a percentage of total loans rose 50 percent since 2006, while the reserves to total loans ratio remained virtually unchanged. Read full article... Read full article...
Thursday, February 05, 2009
UK Interest Rates Crash to 1% New Record Low / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England fired the fifth shot in its series of panic interest rate cuts that have taken the base interest down from 5% in October 2008 to 1% today. This follows the crash in UK GDP for the fourth quarter of 2008 which contracted by -1.5% and is inline with earlier analysis that projects towards an additional 3% GDP contraction for 2009. Read full article... Read full article...
Wednesday, February 04, 2009
Credit Crisis Watch: Liquidiy Injections Starting to Thaw Credit Freeze / Interest-Rates / Credit Crisis 2009
By: Prieur_du_Plessis
Are the various central bank liquidity facilities and capital injections having the desired effect of unclogging credit markets and restoring confidence in the world's financial system? This is precisely what the “Credit Crisis Watch” is all about - a regular review of a number of measures in order to ascertain to what extent the thawing of credit markets is under way. Read full article... Read full article...
Tuesday, February 03, 2009
Fixed-Income Investing: Safer Alternative to Equity Indexed Annuities / Interest-Rates / Investing 2009
By: Money_Morning
Keith Fitz-Gerald writes: For many investors, the concept of an equity indexed annuity (EIA for short) - which establishes a guaranteed minimum rate of return, and the ability to capture the upside of the next bull market with no risk of loss - is proving irresistible. That's especially true at a time when the Standard & Poor's 500 Index is still down nearly 45% from its 2007 high of 157.52 and new U.S. President Barack Obama's stimulus plan has yet to be finalized. Read full article... Read full article...
Monday, February 02, 2009
U.S. Treasury Bond Market Puts in a Top Ahead of Treasury Auctions / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded down again last week, oddly competing with stocks for the “most pathetic security class” title for January. The Long Bond futures declined 10.5% from the highs on December 30. In January stocks declined 8.6% but the Bond Future was off 9.2%. In spite of the mostly pathetic (and therefore supportive for the Treasury market) fundamental data, the main theme that drove trading last week was the supply both on the Treasury and corporate front. The bond friendly Fed policy statement supported the market for about 5 minutes before it buckled sharply. Read full article... Read full article...
Sunday, February 01, 2009
United States Day of Reckoning Treasury Bond Market Collapse Underway / Interest-Rates / US Bonds
By: Money_and_Markets
Martin Weiss writes: If you read just one of my Money and Markets issues this year, make sure it's this one.
You will not hear what I'm about to say from our nation's leaders. Nor will it pour forth from talking heads on Wall Street.
Read full article... Read full article...
Wednesday, January 28, 2009
Today's Interest Rates are Unreal! / Interest-Rates / Gold & Silver 2009
By: Michael_Pento
I'm often asked the question if rising interest rates will cause downward pressure on gold prices. The answer is yes, but only if those rates are rising in real terms and not in nominal terms only. But an even more important question that needs to be asked is whether or not the Fed will be able to allow rates to rise to a level that provides the market with a positive real return. The answer, unfortunately, is no. Read full article... Read full article...
Wednesday, January 28, 2009
U.S. Treasury Bond Bubble About to Pop / Interest-Rates / US Bonds
By: Money_Morning
Shah Gilani writes: Frighteningly, like the rush into tech stocks, then the rush into real estate, and then the rush into commodities, the rush into U.S. government bonds has created a Treasury bubble. In a cruel twist of economic fate, passage of an aggressive Obama administration stimulus plan could further inflate that bubble - before popping it. Read full article... Read full article...
Tuesday, January 27, 2009
Foreigners Puking Up U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Oxbury_Research
New York Times: “ All the key drivers of China's Treasury purchases are disappearing — there's a waning appetite for dollars and a waning appetite for Treasuries, and that complicates the outlook for interest rates,” said Ben Simpfendorfer, an economist in the Hong Kong office of the Royal Bank of Scotland.Read full article... Read full article...
Tuesday, January 27, 2009
Bullish Pattern for Corporate Bond LQD ETF / Interest-Rates / Corporate Bonds
By: Mike_Paulenoff
My technical work in the iShares Investment Grade Corporate Bond ETF (LQD) is very constructive, and points still higher on an intermediate term basis. My near term work has pivoted to the upside after a pullback from the 102.60 high on 1/09 into yest.'s low at 97.32. Why? Mr. Market perceives that there is "value" and relative safety in the corporate bond sector compared with the excess-supply, debt-beleaguered sovereign (US) Treasury sector. Read full article... Read full article...
Tuesday, January 27, 2009
Bond Market Payment Rates Analysis / Interest-Rates / US Bonds
By: Richard_Shaw
Bond rates are easy to access, but understanding what you are being paid for the components of bond rates takes a little bit of simple math to break it down. Important insights can be gained from knowing the building blocks of a rate.
Rates for key bond types are published by multiple public internet sources. You may need to go to more than one to get all the detail you want.
Read full article... Read full article...
Monday, January 26, 2009
Treasury Bonds 5 Years of Interest Destroyed in 6 Weeks! / Interest-Rates / US Bonds
By: Money_and_Markets
Martin Weiss writes: Last month, investors from all over the world — spooked by the debt crisis — flocked to buy long-term U.S. Treasury bonds.
They bought U.S. bonds with money earned from China's export boom. They scooped up bonds with money gleaned from the savings of millions of Japanese families … with government money … oil money … even drug money.
Read full article... Read full article...
Monday, January 26, 2009
U.S. Treasury Bonds Expected to Bounce After Sharp Sell-off / Interest-Rates / US Bonds
By: Levente_Mady
The bond market appears to be settling down into a trading range after the sharp rally during the last 2 months of 2008. The Long Bond traded to its lowest level in nearly 2 months. My favoured scenario is that the market recovers a bit during the next 2 weeks and then it trades lower. Before that happens, traders need to deal with record size 2 and 5 Year Treasury Note auctions early in the week. Read full article... Read full article...
Thursday, January 22, 2009
U.S. Treasury Bond Market Forecast 2009 / Interest-Rates / US Bonds
By: Nadeem_Walayat
The explosive long T-bond rally of November and December 2008 following deep U.S. interest rate cuts towards ZERO appears to have come to an end as treasury bonds broke below the most recent low. Therefore this analysis seeks to determine if the bond bubble is about to burst and how bonds could trend during the next 5 months of 2009. Read full article... Read full article...
Tuesday, January 20, 2009
Are Inflation Proof TIPS Breathtakingly Cheap? / Interest-Rates / US Bonds
By: Mike_Shedlock
Inflation backed securities have been on a good run since November. Some still suggest that TIPS Are "Breathtakingly Cheap" . At a time when central banks are attempting to prevent deflation, the hottest investments in the government bond market are securities that protect debt holders against rising consumer prices.
Read full article... Read full article...
Tuesday, January 20, 2009
UltraShort TBT ETF Benefiting from U.S. Treasuries Decline / Interest-Rates / US Bonds
By: Mike_Paulenoff
The long end of the bond market, and the TLT's (Barclay's 20+ Year T-bond, ETF), are getting hurt today, despite a climbing US dollar. The TBT's (Proshares Ultrashort T-bond, ETF) is benefiting from the price action. Read full article... Read full article...
Tuesday, January 20, 2009
Treasury Bonds Are the Key in 2009 / Interest-Rates / US Bonds
By: Jordan_Roy_Byrne
In 2008, the market that was the trigger for other markets was the currency market. The bottom in the dollar led to a peak in commodities and helped spur massive deleveraging and selling of various holdings. For certain, the increasing strength of the Yen also caused great damage to the global economy and global capital markets. There were only a handful of places to hide, free of volatility and immediate risk. Either you owned government bonds, the dollar or the yen. Gold advanced in 2008, though with extreme volatility compared to other safe-havens. Read full article... Read full article...
Tuesday, January 20, 2009
Credit Crisis Explained: History of Debt Bubbles and Long-term Interest Rates / Interest-Rates / Credit Crisis 2009
By: John_Mauldin
There is a reason I call this column Outside the Box. I try to get material that forces us to think outside our normal comfort zones and challenges our common assumptions. And this week's letter from Hoisington Investment Management Company does just that. Let me give you two quotes to pique your interest: "Monetary policy works by creating the environment for a renewed borrowing and lending cycle. This cycle would require that the debt to GDP ratio, which is already at a record level, grow even higher. Would such an outcome really be that desirable when the controlling problem of the U.S. economy is too much improperly financed debt? If the Fed were able to engender an increase in the debt to GDP ratio, this might merely serve to postpone the reckoning of the current debt levels while laying the foundation for an even more vicious unwinding down the road.Read full article... Read full article...
Monday, January 19, 2009
U.S. Treasury Bond Market Enters 2009 Trading Range / Interest-Rates / US Bonds
By: Levente_Mady
The bond market appears to be settling down into a trading range after the sharp rally during the last 2 months of 2008. The Long Bond essentially recovered the losses from the previous week. The financial sector continues to unravel and the effects are translating into massive problems for the global economy. Read full article... Read full article...
Thursday, January 15, 2009
The Trading Opportunity of 2009 Shorting U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Guy_Lerner
In a previous post on long term Treasury bonds, I reviewed some of the technical factors that have me bearish. "So it is highly likely, from this perspective, that Treasury bonds will be an under performing asset class over the next 12 months. But more importantly, will this market top lead to an investing opportunity (i.e., by shorting Treasury bonds)? In other words, will the market top lead to a secular trend change in Treasury bonds?" Read full article... Read full article...
Thursday, January 15, 2009
U.S. Treasury Bond Bubble in Trouble? / Interest-Rates / US Bonds
By: Brady_Willett
If you have not yet read about the ominous U.S. Treasury bubble (which has been around for awhile ), here is recent a recap: “Risk-free return” is the standard tag attached to the government's solemn obligations. An investor I know, repulsed by prevailing government yields, has a timelier description – “return-free risk”.James Grant – December 4, 2008
Read full article... Read full article...
Wednesday, January 14, 2009
Credit Crisis Contraction Gaining Positive Traction / Interest-Rates / Credit Crisis 2009
By: Prieur_du_Plessis
In order to gauge the progress being made to unclog credit markets and restore confidence in the world's financial system, I monitor a range of financial spreads and other measures. By perusing these, as summarized in this “Credit Crisis Watch” review, one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect. Read full article... Read full article...
Wednesday, January 14, 2009
Ultra-Short Treasury Bond ETF Heading Sharply Higher / Interest-Rates / US Bonds
By: Mike_Paulenoff
Below is what I wrote about the ProShares UltraShort 20-year T-Bond ETF (AMEX: TBT) exactly 24 hours ago, which appears to have unfolded pretty close to expectations. If the pattern continues to unfold as I expect, the TBT should hold between 39.00 and 38.50 ahead of a potent upleg that continues the advance off of the 12/18 low at 35.51. Read full article... Read full article...
Tuesday, January 13, 2009
Breakpoint for the Global Monetary System / Interest-Rates / Global Financial System
By: Dr_Krassimir_Petrov
CHAOS & ORDER - The global monetary system is at a critical juncture. It is fast approaching a breakpoint. We take a philosophical worldview based on chaos theory that considers the evolution of seemingly stable complex systems reaching a bifurcation point, where the whole system rather unpredictably either “explodes” or “implodes” with a lightning speed. The transition is perceived as “chaotic” – the old order collapses and a new order is established. We think that the global monetary system approaches bifurcation – the breakpoint. Read full article... Read full article...
Monday, January 12, 2009
Bond Market Plunges as Yields Move Sharply Higher / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded off for 2 weeks after 8 consecutive weeks of substantial gains. The pullback was sharp, but insignificant relative to the magnitude of the unprecedented move that the long bond futures made over the past 2 months. As expected, once the yearend buying demand was out of the way, the bong bond cracked in a significant fashion. Last week the market faced the same tug of war that is likely to dominate the market going forward: supportive fundamental news countered by increasing supply concerns. During the first full trading week of the year, the bears won the battle in spite of relatively successful Treasury Note auctions. Read full article... Read full article...
Friday, January 09, 2009
The Fed’s U.S. Treasuries Bubble Trouble / Interest-Rates / US Bonds
By: Peter_Schiff
A few weeks ago when the Fed announced a strategy designed to bring down long-term interest and home mortgage rates through unlimited Treasury bond purchases, government debt staged a spectacular rally. To the unschooled market observer, the spike may be difficult to understand. After all, why would the value of Treasury bonds rise while their underlying credit quality is deteriorating faster than Bernie Madoff’s social schedule? The move is actually a perfect illustration of the tried and true Wall Street strategy of “buy the rumor and sell the fact”.Read full article... Read full article...
Friday, January 09, 2009
U.S. Debt Crisis 2009, What must our Creditors be Thinking? / Interest-Rates / US Debt
By: Chris_Galakoutis
I read an article recently about problem gambling. You can't help but notice all the poker on television these days. Gambling, lotteries, and all forms of speculation become more popular in inflationary times, as more people have difficulty making ends meet. Problem gambling has been known to strain relationships, interfere with responsibilities at home and work, and lead to financial catastrophe, as more good money is thrown after bad.Read full article... Read full article...
Thursday, January 08, 2009
UK Interest Rate Cut to New All Time Low of 1.5% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England cut UK interest rates earlier today by 0.5% to 1.5%, the lowest that the base rate has been in the BoE's 315 year history. The series of rate cuts are a belated panic response to the UK economy plunging over the edge of a cliff that looks set to endure GDP contraction of 3% this year which is worse than any 12 month period since World War 2. Sterling rallied from near record lows against the Euro buoyed by a less than expected cut as many market commentators had expected rates to be cut by 1% today. Read full article... Read full article...
Thursday, January 08, 2009
U.S. Treasury Bills, Can you hear the Bond Market POP!? / Interest-Rates / US Bonds
By: Daniel_Smolski
Keynesian capitalism continues to bring with it a saga of never ending bubbles. In just the past decade, we have been faced with the internet bubble bursting of 2000 and a massive real estate bubble that has brought the American economy to its knees. All are examples of a gross misallocation of resources caused by an excess money supply searching for home. The recent credit crunch has provided us with an opportunity to deflate and wipe away all unnecessary liquidity but the Federal Reserve, along with their posy of world bankers, have chosen instead to attempt to reflate a balloon that has already burst. Turning on all the world's liquidity taps has thus far proven to be working. We have beaten down the “evil” that is deflation and we look forward to an era of continued inflation. Inflation that will, undoubtedly, spiral out of control and potentially lead to a period of hyper-inflation. Read full article... Read full article...
Wednesday, January 07, 2009
Your Country Needs You to Buy Government Bonds / Interest-Rates / US Bonds
By: Adrian_Ash
"Are you 100% American? Prove it! Buy US government bonds..." - Poster from the US Treasury promoting the Third Liberty Loan, 1918
THE BRITISH PRIME MINISTER, David Lloyd George, joked in 1915 that it was Britain's political and financial stability which would always enable it to raise "the last million".
Read full article... Read full article...
Wednesday, January 07, 2009
U.S. Dollar Dead Bounce Ends, Treasury Bond Bubble Begins to Dissipate / Interest-Rates / US Bonds
By: Jim_Willie_CB
The marquee line best describing the past two to three months has been that the Dollar Death Dance has been fueled by failure of US banks & corporations, along with sponsored assaults against speculative hedge funds. The climate has changed from liquidation and bankruptcies, obviously steered and exploited by the Powerz, toward more legitimate attempts to have a recovery initiative take root across the landscape, It is fast approaching a wasteland. The most vivid signal of market manipulation, intended to benefit the USGovt borrowing costs, and designed to promote the totally false notion of a Flight to Safety, has been the USTreasury bubble. Read full article... Read full article...
Wednesday, January 07, 2009
Long-term U.S. Treasury Bonds Update / Interest-Rates / US Bonds
By: Guy_Lerner
I have been bearish on long term Treasury bonds long before it was fashionable, and this past week, Barron's has a cover story on Treasuries entitled, "Get Out Now!" It is their belief that "the bubble in Treasuries looks ready to pop, sending prices on government debt sharply lower." Read full article... Read full article...
Wednesday, January 07, 2009
Zero Interest Rate Policy and the Liquidity Trap / Interest-Rates / Credit Crisis 2008
By: Mick_Phoenix
Welcome to the Weekly Report (published 4 Jan 09). I had a nice break over Christmas and the New Year, having spent a week in Norway skiing enjoying guaranteed snow and a good exchange rate to Sterling, thus avoiding the horrible reality of a less than 1:1 Sterling/Euro tourist rate. Sometimes all this macro-econobabble has its uses.
Read full article... Read full article...
Wednesday, January 07, 2009
U.S. Treasury Bond Bubble Bursting? / Interest-Rates / US Bonds
By: Captain_Hook
They've done it now. The Fed has revealed the level of panic they are in behind the scenes by cutting rates to zero and promising unbounded quantitative easing . Here, it should be noted that based on remarks from the Fed Policy Statement Tuesday, quantitative easing is now set to go beyond the bailout style monetiziations of financials that have primarily characterized re-inflation efforts under the gaze of Bernanke and Paulson so far to include just about anybody who needs ‘social assistance', which apparently includes all degrees of bad investors / speculators these days. Make a bad investment. No worries if you're an American apparently as ‘the check is in the mail'. Read full article... Read full article...
Tuesday, January 06, 2009
U.S. Banks Refuse to Detail How They’re Spending Federal Bailout Money / Interest-Rates / Credit Crisis Bailouts
By: Money_Morning
William Patalon III writes: After receiving hundreds of billions of dollars in taxpayer-funded federal bailout money, the biggest U.S. banks say they can't track how that money is being spent.
Some of the banks are outright refusing to discuss the matter, a new study has found. Read full article... Read full article...
Monday, January 05, 2009
U.S. Treasury Bond Bubble Primed for Inevitable Crash / Interest-Rates / US Bonds
By: Paul_Lamont
As Treasury Bill yields fell during the early 1930's, Treasury Bonds moved in the opposite direction . As you can see from Table 48 (also from A History of Interest Rates ), Bonds rose in yield (fell in price) during the banking crises of 1930-32. Read full article... Read full article...
Friday, January 02, 2009
U.S. Treasury Bond Bubble Ripe for Explosion / Interest-Rates / US Bonds
By: John_Browne
Bonds in 2009: A Tough Call - The second half of 2008 will be remembered as the era in which justifiably panicked investors fled the global equity markets and flooded into the bond markets, particularly the U.S. Treasury market. As I write this, the migration largely continues.Read full article... Read full article...
Monday, December 29, 2008
Investment Opportunity in Municipal Bonds / Interest-Rates / US Bonds
By: John_Derrick
We all know that 2008 has been a rough year for virtually all investors, and the municipal market has not been immune. Municipals, however, have weathered the storm better than most asset classes. Read full article... Read full article...
Monday, December 29, 2008
Grossly Overbought Bond Markets Continue Chugging Higher into New Year / Interest-Rates / US Bonds
By: Levente_Mady
The bond market just keeps on chugging higher. Yields on the 30 year Treasury Bond decreased for an 8th consecutive week as the Long Bond future continues its unstoppable march higher. There are a couple of undercurrents that I would like to discuss heading into the New Year. Read full article... Read full article...
Sunday, December 28, 2008
U.S. Corporate Bonds Show Recovery Progress / Interest-Rates / Corporate Bonds
By: Richard_Shaw
Several US bonds types have mostly recovered from the steep losses of October. The differences in recovery generally correspond to the position of the bonds in the capital structure, or to credit quality.
After this difficult year, we expect more investors will consider bonds as part of their portfolio and a volatility moderator.
Read full article... Read full article...
Sunday, December 28, 2008
ETF Bond Yields Confirm Deflation / Interest-Rates / US Bonds
By: Richard_Shaw
The table below presents the SEC 30-day yield and the portfolio yield-to-maturity reported for most of the Barclay's iShares bond ETFs.
Friday, December 26, 2008
Treasury Inflation Protected Securities Investment Tip / Interest-Rates / Investing 2009
By: Richard_Shaw
Treasury Inflation Protected Securities (TIPS) are more attractively priced than ordinary Treasuries of the same maturity.
About Ordinary Treasuries
Read full article... Read full article...
Wednesday, December 24, 2008
Credit Crisis Watch: Credit Market Freeze Continues to Thaw / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
Are the various central bank liquidity facilities and capital injections having the desired effect of unclogging credit markets and restoring confidence in the world's financial system? This is precisely what the “Credit Crisis Watch” is all about – a regular review of a number of measures in order to ascertain to what extent the thawing of credit markets is under way.
Updating the report at this time is also to gauge the credit markets' reaction to the Federal Open Market Committee's (FOMC) announcement of a week ago about a Fed funds rate cut and specific actions that would move the Fed further towards a quantitative easing approach to monetary policy. (Also see my “ Words from the Wise ” review.)
Read full article... Read full article...
Monday, December 22, 2008
Fiscal Insanity Virus Rapidly Spreading The Globe (Part 2) / Interest-Rates / Credit Crisis Bailouts
By: Mike_Shedlock
This post is a continuation of Dangerous Virus Rapidly Spreading The Globe (Part 1) . If you have not yet done so, please read part 1. The symptoms of the FIV disease are complex. Part 1 addresses the symptoms and part 2 below continues with more symptoms and a discussion about preventative measures and cures.
Read full article... Read full article...
Monday, December 22, 2008
U.S. Treasury Bond Steamroller Keeps Chugging Higher / Interest-Rates / US Bonds
By: Levente_Mady
The bond market just keeps on chugging higher. Yields on the 30 year Treasury Bond decreased for a 7th consecutive weeks as the Long Bond future rallied an unprecedented 29 points since the end of October. If it looks like a duck, walks like a duck and quacks like a duck, then it must be just another blow-off top. It is really no big deal, blow-offs have been a dime a dozen this year, so there is no reason to get too excited. I apologize for plagiarizing my own work from last week, but I just could not think of presenting it in a more appropriate manner. Heading into the year end, the signs of extreme distress remain evident in the bond market. Read full article... Read full article...
Monday, December 22, 2008
Bank of England's Failure at Handling of the Financial Crisis / Interest-Rates / Credit Crisis 2008
By: Nadeem_Walayat
Having watched and written about the increasing failure of the Bank of England to act throughout the crisis that broke way back in September 2007 as the run on Northern Rock Bank began, having always acted too little too late that was most recently evident during the summer of 2008 when the BoE was paralysed by the fear of inflation into a state of inaction on interest rates, the MPC members basically sat twiddling their thumbs whilst the economy burned. It took until a frustrated Gordon Brown effectively took away control of Monetary policy from the BoE on the eve of financial armageddon on 8th of October when he announced the first 0.5% cut in interest rates at the Prime Ministers question time despatch box. Read full article... Read full article...
Sunday, December 21, 2008
Panorama: The Year Britain's Credit Bubble Burst / Interest-Rates / Credit Crisis 2008
By: BBC
Happy Christmas? For many people the holiday season is more likely to be a fearful one as they worry about their finances and job security after a year of global economic turbulence.
The last 12 months have seen house prices tumble and repossessions rise, with banks needing billion-pound bailouts. Such has been the speed of the economic crisis that the notion of the credit crunch has been replaced by the very real prospect of a recession.
Sunday, December 21, 2008
Global Recession, Crashing Interest Rates Igniting Government Bond Bubbles / Interest-Rates / Recession 2008 - 2010
By: Prieur_du_Plessis
Duke University: CFO Survey – historic recession to last another year “Chief financial officers in the United States and around the world are more pessimistic than at any time in the history of the Duke University/CFO Magazine Global Business Outlook Survey. The majority of chief financial officers in the US and Europe say their firms will slash spending and employment in 2009, and their firms will post losses. The recession will last another year, according to nearly two-thirds of CFOs.
Read full article... Read full article...
Saturday, December 20, 2008
Fed Targeting Long-term Interest Rates to Force Mortgage Rates Lower / Interest-Rates / US Interest Rates
By: John_Mauldin
- I Meant to Do That
- The Lights of Myanmar
- Some Good News for Borrowers
- Madoff May Give Us a Sell-Off
The Fed has taken interest rates to zero. They have clearly started a program of quantitative easing. What exactly does that mean? Are we all now Japanese? Is the Fed pushing on a string, as Japan has done for almost two decades? The quick answer is no, but the quick answer doesn't tell us much. We may not be in for a two-decades-long Japanese malaise, but we will experience a whole new set of circumstances. In what will hopefully be a shorter holiday version of the e-letter, I will tackle these questions and more.
Read full article... Read full article...
Friday, December 19, 2008
The Greatest Wealth Transfer in the History of Mankind Starts Now! / Interest-Rates / Economic Depression
By: Brent_Harmes
Right now, the Treasury, the Federal Reserve, and the banking system seem to be gearing up for an event the likes of which has never been seen. I believe the crisis that will unfold over the next few years will add up to the biggest economic event in history. The scale of what is happening will dwarf all other economic events combined. The Tulip mania of 1637, John Law's "Mississippi Scheme" of 1720, and the dot-com / tech bubble of 1999 will pale by comparison. Even the hyperinflation in Weimar Germany in 1923 and the Great Depression will seem like a walk in the park compared to what is coming. Read full article... Read full article...
Thursday, December 18, 2008
Bond Investors Turn Bullish on U.S. Treasuries / Interest-Rates / US Bonds
By: Mike_Shedlock
Here is a headline I am laughing at: Bond Investors Turn Most Bullish on Treasuries Since February
Treasuries will appreciate over the next six months as the U.S. economy reels from its worst recession in a quarter-century, a monthly survey of Bloomberg users showed.
Read full article... Read full article...
Wednesday, December 17, 2008
U.S. Fed Opts to Inflate Treasury Bond Bubble / Interest-Rates / US Bonds
By: Gary_Dorsch
Beware - “Quantitative Easing” is Hallucinogenic - American bankers are so fearful of a replay of the 1930's Great Depression, they've finally reached the point of "No-return," – lending $30-billion to Uncle Sam at a rock-bottom interest rate of zero-percent. Demand was so great at the last auction, the Treasury could have sold four-times as many T-bills. If short-term T-bill rates go negative, frightened bankers would effectively be paying the US Treasury for the privilege of lending money to it! But remember, "The Fed can guarantee cash benefits as far out, and at whatever size you like, but we cannot guarantee their purchasing power," former Fed chief, "Easy" Al Greenspan told Congress on Feb 15, 2005.Read full article... Read full article...
Wednesday, December 17, 2008
U.S. Treasury Bonds Soar Following Zero Interest Rates Policy / Interest-Rates / US Bonds
By: Mike_Paulenoff
The extraordinary near-vertical advance in the Lehman 20 Year T-bond ETF (AMEX: TLT) continues, as yield on both the 10 and 30 year Treasuries plummets. Let's notice that for the first time in what I consider to be the "blow-off" stage (since 12./12), the TLTs have gapped up, which technically suggests strongly that the price structure has entered the final phase of the incredible "parabolic" move. Read full article... Read full article...
Wednesday, December 17, 2008
Fed Policy to Drive U.S. Dollar Lower to Prevent Deflation / Interest-Rates / US Dollar
By: Axel_Merk
Faced with the threat of deflation, the Federal Reserve (Fed) may be trying to drive the dollar lower to spur inflation. As policy makers don't want home prices to deteriorate further, an alternative is to inflate the prices of all other goods and services: as a result, the relative prices of homes would be less expensive. Weakening the dollar is an effective policy tool to drive up inflation as the cost of import goes up. Just be careful: the Fed may be getting more than it is bargaining for. Read full article... Read full article...
Wednesday, December 17, 2008
Fed Fights Deflation with Zero Interest Rates / Interest-Rates / US Interest Rates
By: Prieur_du_Plessis
The US Federal Reserve yesterday pulled out all the stops in a frantic effort to save the US economy from collapse and stem the deflationary forces. The Fed funds rate was slashed from 1% to a target range between 0 and 0.25% – the lowest the central bank's key rate has been since records began in 1954. Read full article... Read full article...
Wednesday, December 17, 2008
Quantitative Interest Rate Easing American Style: Free Money / Interest-Rates / US Interest Rates
By: Mike_Shedlock
The Treasury rally continued in spectacular fashion in conjunction with the ZIRP Arrival: Fed Targets Interest Rates 0 to 1/4 Percent . From the FOMC Press Release . The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level.
Read full article... Read full article...
Tuesday, December 16, 2008
Madoff Fraud and the U.S. Government Debt Ponzi Scheme / Interest-Rates / Scams
By: Peter_Schiff
As the multi-billion dollar Ponzi scheme orchestrated by Wall Street insider Bernard Madoff unravels in the media spotlight, the nation is being presented with a rare opportunity to understand the true nature of many of our most cherished financial structures. Hopefully we have the wisdom to connect the dots.Read full article... Read full article...
Tuesday, December 16, 2008
Zero Interest Rates Policy Arrives as Fed Targets 0% to 0.25% / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Effective today, the Fed is done cutting rates. ZIRP has arrived. The Fed is targeting interest rates in a range of 0 to 1/4 percent as noted today's FOMC Press Release .
Release Date: December 16, 2008 - For immediate release
Read full article... Read full article...
Tuesday, December 16, 2008
U.S. Treasury Bonds Blow-off Top? / Interest-Rates / US Bonds
By: Levente_Mady
The bond market just keeps on chugging higher. Yields on the 30 year Treasury Bond decreased for a 6 th consecutive weeks as the Long Bond future rallied an unprecedented 23 points since the end of October. If it looks like a duck, walks like a duck and quacks like a duck, then it must be just another blow-off top. It is really no big deal, blow-offs have been a dime a dozen this year, so there is no reason to get too excited. Read full article... Read full article...
Tuesday, December 16, 2008
Federal Reserve Characteristics of a Crime Syndicate Faces Lawsuits / Interest-Rates / Credit Crisis Bailouts
By: Jim_Willie_CB
The principal missing piece in the grand American mosaic of banking destruction, corrupt collusion, fraudulent bonds, Wall Street control, suppressed regulators, compromised ratings agencies is JUSTICE . Foreign entities are aghast as the lack of prosecution, remedy, and removal from positions of power, as policy continues to be set by the participants responsible for the structural failure and prevalent fraud. Their actions are reaching climax levels. The climax of the Wall Street strangehold is the confiscation of the TARP funds to date. However, whatever has not been nationalized is subject to lawsuits . The pattern of human behavior indicates that lawsuits can spawn additional lawsuits, and quickly control is lost. It is open season on Citigroup, Bank of America, and perhaps other lesser players. Read full article... Read full article...
Monday, December 15, 2008
Any Confidence in Corporate America could send Corporate Bond Prices Higher / Interest-Rates / US Bonds
By: Paul_J_Nolte
Cars – from the musical group to songs about various models (Little Deuce Coupe, Pink Cadillac) to songs about the road (Route 66, King of the Road) it is little wonder the market was captivated by the death dance in Washington regarding the auto companies. When it looked as though they would crash and burn, the markets indicated a 4-5% decline coming into Friday, only a willingness by the White House and the Treasury to use money earmarked for the financial sector, did the markets turn slightly higher on the week.Read full article... Read full article...
Saturday, December 13, 2008
Free Money with that Credit Default Swap? / Interest-Rates / Credit Crisis 2008
By: John_Mauldin
- Things That Should Not Be
- I'll Pay You to Hold My Cash
- Pushing on a String
- Free Money with that Credit Default Swap?
- Oil Does a Strange Contango Dance
- The Tragedy of Bernie Madoff
There are things in today's markets that are simply astounding. They should not exist, yet they do. Why should US bills trade at negative interest? How can oil be trading at all-time highs in terms of spreads over the next year? Bank debt and bonds are trading at discounts not to be believed. Want some free money? I show you a trade that gives you (almost) just that. Fed funds at zero? Are we starting to push on a string? We'll cover all this and more in this week's letter.
Read full article... Read full article...
Friday, December 12, 2008
Government Flood of Treasury Obligations Telegraphing Inflation / Interest-Rates / Inflation
By: Peter_Schiff
A Nightmare Before Christmas - Like many pragmatic economists I have always warned that rapid expansions of government debt would result in inflation and higher interest rates. The explanation was always simple: rising supply of government debt inflates the money supply and weakens the government’s ability to service its debt through legitimate means.Read full article... Read full article...
Friday, December 12, 2008
Trillion Dollar Bailout Liabilities Desensitisation / Interest-Rates / Credit Crisis Bailouts
By: Andy_Sutton
In the current climate, where the overriding opinion of most mainstream financial commentators is that deficit spending is a good thing and the only thing better than one bailout is two bailouts, it is time to inject a bit of logic and sanity.
Sure, I made the argument in last week's edition that IF the Feds are going to throw over $8 Trillion at the financial system which produces nothing, why not throw Big Auto a bone? At least they produce something. However, this line of reasoning should not be taken as any kind of endorsement of our Bail-o-Matic Congress or its actions.
Read full article... Read full article...
Friday, December 12, 2008
U.S. Bond Markets on the Edge of Collapse / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: I thought I had witnessed a lot of craziness in the bond market over the past year:
• The utter obliteration of subprime mortgage bonds …
Friday, December 12, 2008
U.S. Treasury Bond Market Bubble Hits Manic Stage / Interest-Rates / US Bonds
By: Michael_Pento
This week marked the beginning of what I believe is the manic bubble stage in the nearly three decade long Treasury bull market. On Monday, the U.S. Department of Treasury sold $27 billion of three month bills at a discount rate of .005%. That rate is the lowest since the auction began in 1929. On Tuesday, $30 billion of four-week Treasury bills were sold at 0%! Again, the lowest yield ever recorded for that security.Read full article... Read full article...
Thursday, December 11, 2008
Fed Seeks to Issue Own Debt to Soak up Excess Liquidly / Interest-Rates / US Debt
By: Paul_L_Kasriel
The Credit Rating on a Benevolent Counterfeiters Debt - Infinity A? - In today's Wall Street Journal a trial balloon was floated with regard to the Fed issuing its own debt. This is akin to a counterfeiter issuing her own debt. There could never be a default. All the counterfeiter would have to do is print up some new currency to pay the interest on or redeem her debt. The Fed also possesses the power of the printing press, so it would never default on its debt. Of course, there is no guarantee what the future purchasing power of the payments would be to the Fed's creditors, but that is a different issue. Read full article... Read full article...
Wednesday, December 10, 2008
Goldman Recommends Credit Default Swaps as States Face Bankruptcy / Interest-Rates / US Bonds
By: Mike_Shedlock
On November 25 I wrote State of New Jersey Is Insolvent
The state of New Jersey is insolvent. Bankrupt might be a better word. New Jersey is $60 billion in the hole on pension funding and the Governor is planning on skipping payments in a "pension payment holiday" until 2012 so as to not increase property taxes. To top it off, the ongoing plan assumptions are 8.25%. Sorry NJ, that simply is not going to happen. ....
Read full article... Read full article...
Wednesday, December 10, 2008
The State of State Municipal Bond Funds / Interest-Rates / US Bonds
By: Richard_Shaw
Several of our clients have come to us this past week with questions and concerns about municipal bond funds.
They are concerned about recent performance, about California projected cash shortages, about many states struggling with budget deficits, about the fate of revenue bonds in the face of current economic problems; and whether the US government would bailout states the way they are bailing out banks, insurance companies, industrial “banks”, federal mortgage agencies, and automobile companies.
Read full article... Read full article...
Tuesday, December 09, 2008
Credit Crisis Watch- Banking Sector Distrust Remains High / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
In order to gauge the progress being made to unclog credit markets and restore confidence in the world's financial system, I monitor a range of financial spreads and other measures. By perusing these, as summarised in this “Credit Crisis Watch” review, one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect.
First up is the LIBOR rate. This is the interest rate that banks charge each other for one-month, three-month, six-month and one-year loans. LIBOR is an acronym for “London InterBank Offered Rate” and is the rate charged by London banks, and which is then published and used as the benchmark for banks' rates around the world.
Read full article... Read full article...
Monday, December 08, 2008
The Great U.S. Treasury Bond Market Trap / Interest-Rates / US Bonds
By: Captain_Hook
One of the more unusual manifestations of the financial meltdown this year has been the dollar spike, that caught a lot of traders by surprise, and was generated in part by a stampede into the percieved safety of short-expiry US Treasuries, which necessitated the purchase of US dollars. This is now arriving at its ultimate conclusion where Treasury yields have been beaten down to zero, which means that in real terms they are negative, resulting in the bizarre situation where investors are now paying the US government for the privilege of lending them money. This is clearly an untenable circumstance that cannot be expected to continue indefinitely, and it has only been occasioned by desperation, as panicked investors have sought safe haven. Read full article... Read full article...
Monday, December 08, 2008
U.S. Treasury Bonds Reach Extreme Overbought State / Interest-Rates / US Bonds
By: Levente_Mady
The bond market not only held the breakout levels from a couple of weeks ago, but continued to power ahead to the lowest yields seen on long term Treasury Bonds in half a century. The US administration, the Treasury and the Federal Reserve along with authorities world wide have been desperately trying all sorts of new programs to foster the flow of credit. Thus far these programs have not seemed to work. It feels like the authorities are just throwing money, programs, bailouts at a wall and hope that something will stick. Read full article... Read full article...
Saturday, December 06, 2008
Low Interest Rates Spell Big Problems / Interest-Rates / US Bonds
By: Peter_Schiff
Government and mainstream economists have erroneously concluded that the key to reversing the financial free fall can be found in stopping the plunge in home prices. (I would offer the corollary that the key to reducing injuries in auto accidents is to suspend the laws of inertia). But to accomplish the improbable task of re-inflating the housing bubble, the government appears ready to announce a coordinated plan to push down mortgage rates to just 4.5%. Of course, this is precisely the wrong solution to the housing crisis, but when it comes to bad ideas our government has been remarkably consistent. Read full article... Read full article...
Friday, December 05, 2008
Bank of England's Money Printing Nuclear Option / Interest-Rates / UK Interest Rates
By: Mark_OByrne
Gold fell nearly 0.6% yesterday on light volume as the dollar was mixed and oil and most commodities fell sharply again. Gold in euros and particularly British pounds rose sharply when interest rates were slashed by the ECB and BoE. Both central banks indicated that more cuts were likely. Gold has given up some of yesterday’s gains but remains firm in British pounds and Euros at £526/oz and €604/oz respectively.Read full article... Read full article...
Friday, December 05, 2008
U.S. Treasury Bonds the Biggest Bubble of All? / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: We've lived through some truly historic bubbles in recent years:
• The dot-com bubble was a doozy …
• The housing bubble was even bigger, and …
Read full article... Read full article...
Friday, December 05, 2008
European Historic Interest Rate Cuts Suggest Dismal Economic Outlook / Interest-Rates / Euro-Zone
By: Victoria_Marklew
The Bank of England (BoE), the European Central Bank (ECB), and Sweden's Riksbank all slashed their policy interest rates Thursday morning, and all cited the same reasons - that demand conditions have deteriorated markedly, and that inflation is likely to undershoot their respective medium-term targets. Even after the drama of this morning's moves, rates are likely to go lower in 2009, particularly in the Euro-zone. Read full article... Read full article...
Thursday, December 04, 2008
ECB Biggest Interest Rate Cut in History Heading for ZIRP / Interest-Rates / Euro-Zone
By: Mike_Shedlock
The race to Global ZIRP took another big step forward today as central bankers around the globe cut rates. Let's take a look at the recent action .Europe's Central Banks Lower Rates to Fight Recession
The European Central Bank delivered a 75 basis-point reduction in its main refinancing rate, the most in its 10-year history, while the Bank of England cut its benchmark rate to 2 percent, the lowest level since 1951. The Swedish and Danish central banks also lowered their key rates.
Read full article... Read full article...
Thursday, December 04, 2008
Central Banks Slash Interest Rates to Prevent Global Depression / Interest-Rates / Economic Depression
By: Mark_OByrne
Gold fell nearly 1.6% yesterday on light volume as the dollar remained firm. Buyers held back waiting on important interest rate decisions in Europe today and the release of U.S. nonfarm payrolls data tomorrow. Gold remains firm in British pounds and Euros at £523/oz and €613/oz.
Nonfarm payrolls are expected to be poor (economists expect US employers slashed nonfarm payrolls by 320000 in November, which would be the sharpest drop in employment since 2001) and this should put pressure on the dollar and equity markets and see gold remain firm.
Read full article... Read full article...
Thursday, December 04, 2008
UK Interest Rates Forecast to Crash to 1% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
Gordon Browns government having abandoned all of the fiscal rules that it once prided itself on religiously following, is now hell bent on kick starting the UK economy in advance of the looming May 2010 general election deadline. The steady as she goes economic policy has been replaced by the panicking 'unprecedented action's' economic policy and in that having rested away control of UK interest setting from the Bank of England in all but name, UK interest rates are now set to be the latest to take a crash course towards an unprecedented level of just 1%.Read full article... Read full article...
Wednesday, December 03, 2008
Central Banks Open the Money Printing Floodgates to fight Deflation / Interest-Rates / Money Supply
By: Gary_Dorsch
In the early 1980's, the Federal Reserve's headlines figures for the M1, M2, and M3 money supply aggregates flashed at the top of trader's radar screens, and jolted US T-bill rates by 50-basis points or bond yields by 30-points within minutes. Inflation was raging at a 10.7% annualized rate, and repeated attempts to cure it had failed. Former Fed chief Paul A. Volcker was doggedly pursuing a radical monetary policy that led to skyrocketing interest rates and two back-to-back recessions. Read full article... Read full article...
Tuesday, December 02, 2008
Search For Stimulus In a Zero Interest Rate Policy World / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Central bankers everywhere are Looking for Tools in a Zero Interest-Rate World .
The Swiss National Bank is becoming the first central bank in Europe to learn what it's like to live in a zero interest-rate world.
Read full article... Read full article...
Tuesday, December 02, 2008
U.S. Fed Monetizing Debt by Printing Money / Interest-Rates / Central Banks
By: Axel_Merk
Deflation won't happen here; at least not if Federal Reserve (Fed) Chairman's Ben Bernanke's plan pans out. Deflation is considered a persistent decline in prices of goods and services; in a speech in 2002 , Bernanke outlined the steps he would take if the U.S. ever faced the threat of deflation. Deflation is suffocating anyone holding debt as the debt burden becomes more difficult to finance with shrinking income; in contrast, inflation bails out those who have a lot of debt. In our assessment, fighting deflation is the Fed's top priority now; the latest minutes from the Fed's Open Market Committee (FOMC) meeting state: Read full article... Read full article...