Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, November 19, 2009
What If the Foreigners Stop Buying Our Debt? / Interest-Rates / US Debt
By: Doug_Horning
By Doug Hornig, Senior Editor, Casey Research - “I have always depended on the kindness of strangers,” said Blanche DuBois, in the final words of the play A Streetcar Named Desire. Well, don’t we all.
Many citizens probably still cling to the old saw that public debt doesn’t matter because “we owe it to ourselves.” Wrong. Debt always matters. And as for whom we owe it to, it is a lot of kind (or, at least, not yet unkind) strangers.
Read full article... Read full article...
Monday, November 16, 2009
The Fed's Policy of Near Zero Interest Rates / Interest-Rates / US Interest Rates
By: Bob_Chapman
One of the outcomes of Fed policy of near zero interest rates is that seniors cannot live on an income of 1-1/% and that pension funds, insurance companies and endowments cannot fulfill their commitments. As yields eventually rise, although the Fed has signaled that is at least a year away, and if Japan is any guideline, we could be 19 years away from solving the problem of fiduciaries.
Monday, November 16, 2009
Are U.S. Treasury Bond Yields Headed Lower? / Interest-Rates / US Bonds
By: Guy_Lerner
I am beginning to see signs that there is a high likelihood of this occurring over the next couple of weeks. Figure 1 is a weekly chart of the Ultra Short Lehman 7-10 Year Treasury (symbol: PST); this is an ETF that corresponds to the inverse of the daily performance of the Barclays Capital 7-10 Year U.S. Treasury index.
Monday, November 16, 2009
Fixed Interest Rate Bonds Shelf Life Hits New Low / Interest-Rates / Savings Accounts
By: MoneyFacts
Savers looking to take out a fixed rate bond need to act fast after the average bond shelf-life fell to a new low of 23 days last month.
At its peak in March 2006, the average shelf-life of a fixed rate bond was 158 days.
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Saturday, November 14, 2009
Origins of the Federal Reserve Banking System- Part 3 / Interest-Rates / Central Banks
By: Murray_N_Rothbard
Jacob Schiff Ignites the Drive for a Central Bank
The defeat of the Fowler Bill for broader asset currency and branch banking in 1902, coupled with the failure of Secretary of Treasury Shaw's attempts of 1903–1905 to use the Treasury as a central bank, led the big bankers and their economist allies to adopt a new solution: the frank imposition of a central bank in the United States.
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Saturday, November 14, 2009
Origins of the Federal Reserve Banking System-Part 2 / Interest-Rates / Central Banks
By: Murray_N_Rothbard
Charles A. Conant: Surplus Capital and Economic Imperialism
The years shortly before and after 1900 proved to be the beginnings of the drive toward the establishment of a Federal Reserve System. It was also the origin of the gold-exchange standard, the fateful system imposed upon the world by the British in the 1920s and by the United States after World War II at Bretton Woods. Even more than the case of a gold standard with a central bank, the gold-exchange standard establishes a system, in the name of gold, which in reality manages to install coordinated, international, inflationary, paper money.
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Saturday, November 14, 2009
Origins of the Federal Reserve Banking System / Interest-Rates / Central Banks
By: Murray_N_Rothbard
The Progressive Movement
The Federal Reserve Act of December 23, 1913, was part and parcel of the wave of Progressive legislation on local, state, and federal levels of government that began about 1900. Progressivism was a bipartisan movement that, in the course of the first two decades of the 20th century, transformed the American economy and society from one of roughly laissez-faire to one of centralized statism.
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Friday, November 13, 2009
The Sterling Interest Rate Yield Curve Steep and Steepening / Interest-Rates / International Bond Market
By: Seven_Days_Ahead
The Technical Trader’s view:
Friday, November 13, 2009
Buying Government Bonds is a Mugs Game / Interest-Rates / US Bonds
By: Michael_S_Rozeff
Suppose that I am thinking about buying a bond and its yield is 3.5 percent. This is a nominal yield before taxes and before accounting for price inflation. To estimate my real return, I need to estimate future price inflation. If, for example, I think that price inflation is going to be 3.0 percent, then I expect my before-tax yield will be only about 0.5 percent.
Wednesday, November 11, 2009
Governments in a Hurry to Borrow Cash to Re-Finance Debt / Interest-Rates / Recession 2008 - 2010
By: Adrian_Ash
"With 30-year bond yields still lower than they were before last winter's wipe-out, there's an urgency about refinancing debt as 2010 draws near..."
IT'S NOT JUST the US Treasury that needs to borrow more, for longer, over the next few months and years.
Read full article... Read full article...
Wednesday, November 11, 2009
Monetary Policy Outlook / Interest-Rates / Global Economy
By: RGE_Monitor
In this week’s note, we take a look at some recent monetary policy trends in advanced economies. This content is excerpted from a longer piece, “Global Monetary Policy Review,” which includes in-depth analysis of when the world’s emerging markets might shift interest rate strategy. This longer piece is available exclusively for the use of RGE’s clients.
Sunday, November 08, 2009
Municipal Bonds A Dangerous Investment For 2009 / Interest-Rates / US Bonds
By: Andrew_Abraham
Many times just using logic an investor can steer away from problems. It seemed forever municipal bonds were considered one of the safest investments. One did not get rich by investing in municipal bonds however they were consistent and the default possibility was almost not a possibility. Fast forward to 2009 municipal bonds have to be one of the scariest investment choices. All one has to do is to look at State by State finances to be aware.
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Wednesday, October 28, 2009
Are US Treasuries About to Rally… or Crash? / Interest-Rates / US Bonds
By: Graham_Summers
Historically, because the US was the #1 superpower (and the largest economy in the world), Treasuries have generally held to be one of the very few “risk free” investments on the planet. Consequently, Treasuries are where money runs to hide when the rest of the financial world is in trouble.
You can see this in the below chart: as soon as the Financial Crisis began in earnest with the credit market lockup in July 2007, 30-Yr Treasuries broke above 112: a point of historical resistance. This told us two things:
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Monday, October 26, 2009
Bailed Out Banks Continue to Raise Loan Interest Rates / Interest-Rates / Credit Crisis 2009
By: MoneyFacts
Since Bank Rate dropped to the historic low level of 0.50% in March, loan rates have continued to increase.
In this period half of all lenders offering personal loans, have upped their rates.
Read full article... Read full article...
Monday, October 26, 2009
Confusing Bond Markets / Interest-Rates / International Bond Market
By: Seven_Days_Ahead
The US, UK and European bond markets have all experienced recent double failures at long-term all-time highs. So the long-term technical outlook is bearish. But those failures occurred nearly a year ago. They have fallen since, but from June this year they have lacked any bear impetus at all. Any medium and long-term structures that have developed are far from completion and markets are locked in trading ranges. Traders should stand aside and await events.
Thursday, October 22, 2009
Affordable Mortgage Interest Rates / Interest-Rates / Mortgages
By: LiveCharts
Neil Kokemuller writes: While most banks aren’t currently offering rates at the historically low levels seen earlier this year, overall, mortgage rates are still very affordable. According to bankrate.com, the national average cost for a 30-year fixed rate loan Wednesday (October 21) is 5.23 per cent, compared to 4.99% one week ago.
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Wednesday, October 21, 2009
U.S. Interest Rates Set to Rocket with Falling Dollar? / Interest-Rates / US Bonds
By: Mike_Paulenoff
See our comparison chart between Cash Dollar Index (DXY) and the Proshares Ultrashort 20+ Year T-bond, ETF (NYSE: TBT), in which I am trying to show that right now the vulnerable juxtaposition of the dollar is creating nervousness among bond traders and investors. Once the bond vigilantes get their meat hooks into the bond market, the Fed will have one heck of a challenge on its hands.
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Tuesday, October 20, 2009
If Bernake Doesn’t Raise The Fed Interest Rate Very Soon There Will Be BIG Trouble / Interest-Rates / US Interest Rates
By: Andrew_Butter
The debate about whether it was Alan Greenspan’s “fault” will continue for generations, the “other side” summed up their position nicely in a quip that came up in the debate about whether to let the Fed have more power, “ That’s like buying your teenager a sports car after he wreaked the family saloon”.
Tuesday, October 20, 2009
Treasury Inflation Protected Securities (TIPs) Breakout / Interest-Rates / US Bonds
By: Guy_Lerner
I last mentioned Treasury Inflation Protected Securities or TIPs in an article written on September 10 entitled, "If You Don't Like 'em, Then Don't Trade 'em". In that article, I discussed the fact that there were other places to look for that "fat pitch" besides U.S. equities. If you didn't like the risk in equities, then play in another sandbox.
Monday, October 19, 2009
Bernanke Gone Berserk! Bank Reserves Explode! Fed Money Printing Gone Wild! / Interest-Rates / Quantitative Easing
By: Martin_D_Weiss
Martin here with the most shocking new numbers I’ve seen in my lifetime.
My conclusion: Fed Chairman Bernanke has dumped so much funny money into the U.S. banking system and has done so little to manage how that money is used, the fate of our entire economy has now been cast under a dark shadow of doubt.
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Saturday, October 17, 2009
The Fed Does Not Care About the Dollar, Easy Money is Here to Stay / Interest-Rates / US Interest Rates
By: Mike_Larson
Every so often, someone decides to pick a fight with me over the Federal Reserve. They say I’ve got it all wrong. They say the Fed is going to prove its mettle. They say that foreign central banks are crying “Uncle” over the dollar, and that this will force the Fed to reverse course and start raising rates.
Monday, October 12, 2009
CEBR UK Interest Rate Forecasts 0.5% Until 2011, Below 2% until 2014 / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Centre for Economics and Business Research (CEBR) is forecasting that UK interest rates will stay at 0.5% into 2011 and not reach 2% until 2014.
Monday, October 12, 2009
Bank of England MPC UK Inflation Forecasting Track Record Analysis / Interest-Rates / UK Interest Rates
By: Lloyds_TSB
Each year, in the August Inflation Report, the Bank of England reviews the accuracy of the inflation forecasts made by the UK Monetary Policy Committee (MPC). The reports have become of increased interest, as there has been a suspicion that the policy committee has been unduly conservative about the inflation risks facing the UK economy. If true, this would suggest that over the past decade monetary policy may have been tighter than it should have been given the MPC’s strict inflation remit. By extension, GDP growth may have been commensurately, but unnecessarily, weaker. However, some also argue that the MPC has underestimated inflation. If so, there is a risk that policy has been too loose, potentially leading to higher inflation.
Saturday, October 10, 2009
On CNBC: Will Japan Drive Our Interest Rates Higher? / Interest-Rates / Japan Economy
By: Vitaliy_Katsenelson
I was on CNBC a few days ago discussing the Japan debt situation. Here are my talking points and some additional thoughts – a lot of them I did not have a chance to cover in the previous note or the interview.
Saturday, October 10, 2009
The Securitization Boondoggle / Interest-Rates / Credit Crisis 2009
By: Mike_Whitney
The relentless financialization of the economy has resulted in a hybrid-system of credit expansion which depends on pools of loans sliced-and-diced into tranches and sold into the secondary market to yield-seeking investors. The process is called securitization and it lies at the heart of the current financial crisis. Securitization markets have grown exponentially over the last decade as foreign capital has flooded Wall Street due to the ballooning current account deficit.
Friday, October 09, 2009
What are the Central Banks Up To? / Interest-Rates / Central Banks
By: Sy_Harding
At its FOMC meeting last month the Fed said that while it is more confident that the economic recovery is underway, it expects to keep interest rates low for some time to come. Analysts took that to mean until sometime late in 2010.
Thursday, October 08, 2009
The Fed's Financial Crisis Balance Sheet Exit Strategy Dilemma / Interest-Rates / Credit Crisis 2009
By: Philipp_Bagus
The Federal Reserve (Fed) and other central banks currently face a dilemma. A strong central-bank balance sheet is essential for the quality of a currency and the stability of a financial system. Unfortunately, the financial crisis has seen substantial changes in the balance sheets of the world's major central banks.
Thursday, October 08, 2009
Bank of England Keeps UK Real Interest Rate at Minus 1.1% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England as expected has kept the UK base interest rate on hold at 0.5% which translates into a real interest rate of -1.1% adjusted for CPI inflation of 1.6% which continues to seek to punish savers for the crimes of the bankers.
Friday, October 02, 2009
UK Treasury Bond Market, Surging Gilts Sleep Walking Toward Edge of a Cliff / Interest-Rates / UK Debt
By: Seven_Days_Ahead
The Gilt has remained well-supported over recent months despite some of the worst public sector borrowing data ever seen, and certainly in peace time. In recent days it has begun to surge -in line with or even better than other bond markets What then, as we have asked before, keeps this market up?
Thursday, October 01, 2009
U.S. Treasuries TLT on the Move / Interest-Rates / US Bonds
By: Mike_Paulenoff
As we discussed with subscribers last evening, the iShares 20+ Year Treasury Bond ETF (NYSE: TLT) looked like they were in a high-level consolidation ahead of a thrust to the upside, which is exactly what has transpired so far here today, likely in reaction to disappointing data on initial Jobless Claims ahead of tomorrow’s monthly Employment Report.
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Wednesday, September 30, 2009
Are U.S. Treasuries A Bubble Ready To Pop? / Interest-Rates / US Bonds
By: Andrew_Butter
The standard theory is that the price/cost of risk-free long-term debt is a function of (a) the cost of short-term debt plus (b) some function of the market's anticipation of the likely course of inflation or deflation over the term of the debt.
Governments (the Fed) can control short-term rate but they are at the mercy of markets to fix long-term rates. And of course markets are "efficient", unless of course there is a "bubble", when...Err...they are not.
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Wednesday, September 30, 2009
What the Fed Doesn’t Want You To Know About U.S. Debt / Interest-Rates / US Bonds
By: Graham_Summers
The Fed’s FOMC announcement came out…
We got exactly what I expected, a kind of wishy-washy, “hedging our bets” statement from the Fed. You have to remember that Bernanke was Greenspan’s right hand man for much of the bubble days of the ‘90s and early ‘00s, so the guy is an expert at walking both sides of the line when it comes to policy and public statements.
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Wednesday, September 30, 2009
PIMCO's Bill Gross Bets On Deflation and U.S. Treasury Bonds / Interest-Rates / Deflation
By: Mike_Shedlock
PIMCO's Bill Gross has a switch of heart. He has gone from hating treasuries to liking them. Please consider Pimco’s Gross Buys Treasuries Amid Deflation Concern.
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Saturday, September 26, 2009
The Federal Reserve Has Attempted to Corner the Credit Market / Interest-Rates / Market Manipulation
By: Submissions
Daniel Aaronson and Lee Markowitz write: During a market corner, a buyer accumulates an asset with the intention of driving the price higher without any regard for its true value. Additionally, the buyer amasses such a large holding that market prices cannot remain elevated without continuous buying. For example, when the Hunt Brothers cornered the silver market, silver rose from $11 per ounce in September 1979 to nearly $50 an ounce in January 1980. Eventually, the Hunt Brothers stopped buying silver as they ran out of capital and the market for silver dried up. As happens with all market corners, when the buyer disappeared from the market, the price of silver spiraled downward. The Federal Reserve, knowingly or not, has cornered the credit market.
Wednesday, September 23, 2009
Impact of LIBOR Interest Rate Trends on Currencies / Interest-Rates / Forex Trading
By: Ashraf_Laidi
While FX trading seems to become increasingly bifurcated (broad USD weakness & broad JPY strength or vice versa), the unfolding trend remains a concerted move away from the QE currencies (USD, GBP) and into the commodity/high yielders as well as the EUR. Emerging talk on whether the US dollar has become the new low-yielding vehicle for carry trades financing equities, commodities and currencies vehicle highlights the difference between the USD and JPY carry trades.
Tuesday, September 22, 2009
Bailed Out Banks Not Lending, Sitting on Tax Payers Cash / Interest-Rates / Credit Crisis 2009
By: Nadeem_Walayat
The Bank of England has both pumped hundreds of billions of tax payer cash into the bankrupt banking sector and cut interest rates to near zero (0.5%) to enable the banks to have funds available to lend out to the wider economy. However the banks instead of lending this money out are in effect sitting on tax payer cash with a view to earning interest on the money at the Bank of England which is illustrated by a sharp drop in the interbank rate towards the base rate as the following graph illustrates.
Tuesday, September 22, 2009
When Will the Fed Start Raising U.S. Interest Rates? / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Calculated Risk has an interesting chart and discussion on the unemployment rate and Fed rate hikes.
Monday, September 21, 2009
Massive Relief for U.S. Homeowners and Trouble for the Banks / Interest-Rates / Credit Crisis Bailouts
By: Ellen_Brown
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership.
Monday, September 21, 2009
Bond Funds Price Change vs Volatility / Interest-Rates / US Bonds
By: Richard_Shaw
Stock volatility versus price change gets a lot of financial media attention, but bonds don’t get so much.
Bonds are an important part of portfolios that deserve investigative attention too.
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Saturday, September 19, 2009
Keynesian Economics and Negative Interest Rates / Interest-Rates / US Interest Rates
By: Gary_North
There is considerable discussion about the possibility that the Federal Reserve could and possibly should create a monetary environment in which interest rates are negative.
Read full article... Read full article...First, why should it do this?
Friday, September 18, 2009
Easy-Money Fed Fueling U.S. Dollar “Carry Trades” / Interest-Rates / US Dollar
By: Mike_Larson
A fascinating thing just occurred in the global interest rate market: For the first time since 1993, it became cheaper to borrow dollars than Japanese yen! The three-month dollar-based London Interbank Offered Rate, or LIBOR, slumped to 0.292 percent, compared with the yen-based LIBOR rate of 0.352 percent.
Friday, September 18, 2009
Jim Cramer Calling For A Top In US Treasury Bonds / Interest-Rates / US Bonds
By: Guy_Lerner
Jim Cramer is at it again. This time he is calling for a top in US Treasury Bonds. Mama mia, I am heading for the hills. Cramer is calling for higher interest rates, therefore it must be so.
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Thursday, September 17, 2009
The Looming Global Debt Crisis / Interest-Rates / Credit Crisis 2009
By: Bob_Chapman
What do you do after you have zero interest rates and you have flooded the world with money and credit?
The answer is you attempt to fight off higher interest rates and see if you can dodge the inflation bubble that follows. The commitment for this current fiasco to save the world’s Illuminist banks has already caused an official debt responsibility for the US of more than $23 trillion or about 40% of world GDP. That is staggering and it is official. We wonder what the real figure is? It is also wise to remember that the Federal Reserve, and other reserve banks worldwide, all international, are responsible for the carnage we are witnessing.
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Wednesday, September 16, 2009
Treasury Bond Market Bullish Sentiment, Circumstances Are Different / Interest-Rates / US Bonds
By: Guy_Lerner
If you have been paying attention the last couple of weeks, I have been warming up to bonds. However, earlier in the year, I thought that Treasury yields would head higher (i.e., bonds lower), and that this would result in a secular trend change. In other words, we would be embarking on a long period of increasing yield pressures. This did not come to pass although yields on the 10 year Treasury bond did reach 4.0%. Despite this failed signal, Treasury yields still have the technical characteristics of an asset poised to undergo a secular trend change, and by secular, I mean lasting years. But not now.
Tuesday, September 15, 2009
Are Foreign Purchases of U.S. Treasury Bonds Being Faked? / Interest-Rates / US Bonds
By: Washingtons_Blog
Everyone knows that the American government is gaming the market for treasury bonds to some extent.
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Monday, September 14, 2009
U.S. Treasury Bonds Trade Higher on Weak Economy / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded mostly positive all week and followed the recent pattern of one ugly Friday alternating with one neutral Friday. This last one actually managed to eke out a small gain. The financial markets are shaping up to be a diverging tale of three themes. On the one hand we have the stock markets around the world relentlessly grinding to new highs, while on the other hand the bond market refuses to buckle as it continues to retain a strong safe haven bid. In the mean time, gold is also breaking out to the upside with some conviction. The yellow metal managed to achieve its highest weekly closing level ever at $1007 per ounce.
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Saturday, September 12, 2009
What Will Happen When Foreign Investors Dump U.S. Treasury Bonds? / Interest-Rates / US Bonds
By: Mike_Larson
Every time I talk about the risk of our foreign creditors selling off their U.S. Treasuries, I hear the same objection: These guys have no place else to put the money! They’ll ALWAYS buy our debt because our bond market is the most liquid, freest place to stash their money.
Friday, September 11, 2009
UK Government Bond, Gilt Market’s Uncertainty / Interest-Rates / US Bonds
By: Seven_Days_Ahead
The Macro Trader’s view:
‘The Gilt is a government bond market that is dogged by an unprecedented build of peacetime debt, supported by the Central Bank.’ Discuss.
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Friday, September 11, 2009
Junk Bond Defaults Worst Since Great Depression, Why Is the Stock Market Rallying? / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
Numerous people have asked for an update to Corporate Bond Spreads Key To Continued S&P Rally.
Specifically, inquiring minds are interested in my statement "It will pay to keep one eye on the credit markets to help ascertain long-term equity direction. In August of 2007 the corporate bond market cracked wide open. Although the S&P 500 made a new high in November, the corporate bond market didn't. It was the mother of all warning calls that most missed."
Tuesday, September 08, 2009
U.S. Treasury Bonds Move Higher in Spite of Stronger Economic Data / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded mostly positive all week only to give up most of its weekly advance for second time in the past three Fridays. Ironically, the worst fundamental news was released on Friday in the form of the monthly Employment report (see details in the economic data section below).Read full article... Read full article...
Monday, September 07, 2009
A Plan for the Resolution to the Insolvency of the United States Banking System / Interest-Rates / Credit Crisis 2009
By: Mansoor_H_Khan
The core problem of the United States' banking system (and maybe the world's banking system) is not liquidity but insolvency. The liabilities of the United States' banking system exceed the value of its assets. The issue is not only the toxic assets (toxic mortgage backed securities, toxic commercial real estate loans, sub-prime mortgages, alt-A loans, adjustable loans likely to go bust, increase in prime mortgage default rates, etc) but also off-balance sheet liabilities (such as expected huge unaccounted for future derivatives losses).
Read full article... Read full article...
Sunday, September 06, 2009
China is Now a Net SELLER of U.S. Treasury Notes and Bonds! / Interest-Rates / US Bonds
By: Mike_Larson
We told you this was coming. Heck: A blind man could have seen it a mile away.
For many months now, we’ve predicted that Washington’s wild spending and borrowing spree would make the global investors who buy our longer-term Treasuries — notes and bonds — as nervous as long-tailed cats in a room full of rocking chairs.
Read full article... Read full article...
Friday, September 04, 2009
U.S. Treasury Bonds Supply and Quantitative Easing, Got Gold? / Interest-Rates / Quantitative Easing
By: Adrian_Ash
We are struck by the size of the needs of the State, and the meager assistance offered by patriotic gifts..." - Finance committee of the French National Assembly, March 1790
BY END-JULY 2009, sales of new US Treasury bonds had already outstripped full-year sales in calendar 2008.
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Thursday, September 03, 2009
Can a Central Bank Go Broke? / Interest-Rates / Central Banks
By: David_Howden
Centralized monetary authorities enjoy a privileged position in the current monetary system. People tend to view the economists and politicians at these institutions as demigods, individuals who if given enough resources will ensure that the economy continues an ever-advancing and smooth trajectory. However, unlike the Greek demigods of yore, today's central bankers are mere mortals who must work within the confines and constraints of the institution that they head.
Wednesday, September 02, 2009
Rising U.S. Treasuries Foretell Lower Interest Rates / Interest-Rates / US Bonds
By: Mike_Paulenoff
While gold prices attempt to break out to the upside, the bond market continues to climb as well. Let's take a look at the pattern developing in the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT).
Monday, August 31, 2009
The Interest Rate Cosa Nostra / Interest-Rates / Market Manipulation
By: Rob_Kirby
Recently, Bloomberg News reported that a legal brouhaha has developed in Italy surrounding the municipality of Milan entering into a refinancing package, including retiring older existing debt and associated interest rate swaps, with a combination of new bonds and interest rate swap agreements designed to protect Milan against a rise in long-term interest rates, back in 2005. This financing was arranged with a quartet of banks including J.P. Morgan Chase, U.B.S. AG, Deutsche Bank AG and Depfa Bank Plc.
Monday, August 31, 2009
U.S. Treasury Bonds Lower, Despite Supportive Fundementals / Interest-Rates / US Bonds
By: Levente_Mady
The bond market moved up last week as yields dropped across the curve. In spite of stronger than expected economic data, another auction cycle and a rock solid stock market, bonds spent most of the week in positive territory and managed to hold on to their gains better than the previous week.
Read full article... Read full article...
Thursday, August 27, 2009
Bernanke: Central Bankers' Bob the Builder? / Interest-Rates / Central Banks
By: Axel_Merk
First, the good news about Bernanke’s nomination for a second term as head of the Federal Reserve (Fed): we know what we are getting and may be able to prepare for the risks his continued leadership may pose to inflation and the dollar. The bad news: more of the same.
Wednesday, August 26, 2009
Long Term U.S. Treasury Yields, Someone Is Going To Be Wrong / Interest-Rates / US Bonds
By: Guy_Lerner
For over 8 months now, I have been chronicling the plight of the 10 year Treasury bond. Based upon the "next big thing" indicator it was my expectation that yields on the 10 year Treasury bond would rise once there was a monthly close above a yield of 3.342%. This occurred at the end of May, 2009.
Wednesday, August 26, 2009
Understanding Money Market Funds / Interest-Rates / Credit Crisis 2009
By: Paul_Petillo
Paul Volker doesn't like them much. Institutional investors use them frequently. And individual investors, particularly those of the smaller variety don't really understand what they do and in many instances, use them for the wrong reasons. They are like banks but are not regulated as such. The Securities and Exchange Commission currently oversees their activity as per the Investment Company Act of 1940.
Monday, August 24, 2009
U.S. Treasury Bond Market Kept Positive by Friendly Inflation Data / Interest-Rates / US Bonds
By: Levente_Mady
The bond market ended flat after spending most of the time trying to move up last week. Friendly inflation data and a confirmation of solid international demand kept the market in positive territory for most of the week.
Read full article... Read full article...
Monday, August 24, 2009
Global Debt Bubble, Steve Keen on Causes and Solutions / Interest-Rates / Credit Crisis 2009
By: Mike_Shedlock
Australian economist Steve Keen is one of the very few who have called this economic crisis correctly. What distinguishes Keen is that his economic forecasts are based on levels of debt and changes in levels of debt as opposed to money supply, output capacity and other things that led most economists astray.
Sunday, August 23, 2009
Big Interest Rate Move Around the Corner? / Interest-Rates / US Interest Rates
By: Marty_Chenard
Interest rates ... housing demand ... housing affordability ... bank loans ...
Headline confusion? ... Here are the current housing related headlines on a Yahoo news search:
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Saturday, August 22, 2009
Even Warren Buffett Is Now Saying U.S. Treasury Bonds Could Crack! / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: I’ve made no secret about my view on U.S. bonds and the U.S. dollar …
I’ve minced no words, and cut no corners …
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Thursday, August 20, 2009
Monetization of U.S. Treasury Bonds In Isolation / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
Every few months a chart comes along that needs almost no follow-on paragraphs to make the point of the issue. The chart provided by CIGA Eric covers several important types of US$-based bonds, their inflow and outflow, and the aggregate GrandNet. The financial data is publicly available from the USGovt TIC Reports. The messages are clear. Inflows of foreign funds are dwindling.
Wednesday, August 19, 2009
Ruining Public Credit with Imaginary Fiat Money / Interest-Rates / Quantitative Easing
By: Adrian_Ash
"Expect more 'imaginary money – with or without negative bank rates – often and soon..."
IT'S NOT OFTEN that Sweden gets to lead the world. Saab mimicked BMW. Nokia improved on Motorola. Abba took The Carpenters and added a hi-hat.
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Wednesday, August 19, 2009
Broke FDIC Squeezes Banks for More Insurance Cash / Interest-Rates / Credit Crisis 2009
By: Mike_Shedlock
Here is an interesting Email from a Bank Owner and CEO regarding As of Friday August 14, 2009, FDIC is Bankrupt
ABO, who as been in the business 30 years, writes:
Tuesday, August 18, 2009
Bernanke’s Federal Reserve Interest Rate Indecision Meeting / Interest-Rates / US Interest Rates
By: Money_and_Markets
Nilus Mattive writes: Last week, the Federal Reserve held a two-day interest rate policy meeting, and nobody was surprised by their lack of action. Heck, it’s unlikely that we’re going to see a real change in their target rate for a while yet.
But I do think there were some important suggestions buried in their comments, and I want to talk about those today. Plus, I want to throw my hat into the ring on the “Will Bernanke get another term?” debate as well.
Read full article... Read full article...
Monday, August 17, 2009
U.S. Treasury Bond Yields, Where to From Here? / Interest-Rates / US Bonds
By: Mike_Shedlock
Last week's treasury rally was the biggest in eight months notes Bloomberg in Treasuries Rise Amid Flat Consumer Prices, Declining Confidence.
Monday, August 17, 2009
U.S. Treasury Bonds Positive Seasonal Influences / Interest-Rates / US Bonds
By: Levente_Mady
The bond market bounced back last week. We went through another 3-10-30 year auction cycle, but the restless natives did not even wait for the auctions to be out of the way as the bond started its move up first thing on Monday. Needless to say the supply was well received. Not only was the bidding substantial and aggressive, but also the closely watched “International Buyers” showed up in force again. They took over 50% of all the bonds auctioned and were especially aggressive in buying the 30 year tranche on Thursday.
Read full article... Read full article...
Saturday, August 15, 2009
FDIC Depositor Insurance Scheme is Bankrupt! / Interest-Rates / Credit Crisis 2009
By: Mike_Shedlock
Bank Failure Friday is in full swing. Tonight there were 5 more failures, numbers 73 through 77 on the year. In the biggest failure since WaMu, BB&T Takes Over Colonial.
Saturday, August 15, 2009
U.S. Debt as a Percentage of GDP Means No Growth for 50 Years / Interest-Rates / US Debt
By: Andy_Sutton
Apparently, a bazooka wasn’t enough. Last summer, that is what then Secy. of the Treasury Henry Paulson asked for when he made his case for sweeping financial powers. Instead, Congress gave him a nuke, and apparently that wasn’t enough either. Making the jump from completely absurd to the absolutely ridiculous, Timothy Geithner became the latest in a long line of Treasury Chiefs to run to Congress to ask for an increase in the nation’s debt ceiling.
Friday, August 14, 2009
Moment of Truth for U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Mike_Paulenoff
The moment of truth for the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT). If current strength continues to propel prices into and ABOVE a key near-term resistance plateau between 94.15 and 94.85, then prices should explode even more rapidly towards 97 thereafter (and I will be forced to chase the long side).
Read full article... Read full article...
Thursday, August 13, 2009
The Federal Reserve is Immoral / Interest-Rates / Central Banks
By: Tim_Iacono
During the first few days of each month comes a task that is increasingly approached with dread around here and, unfortunately, that condition is likely to persist for some time.
Shortly after banks make their month-end update to various short-term savings accounts that we hold, these balances are queried, only to find that, almost without exception, interest credited is less than it was in prior months and far less than it was eight or ten months ago.
Thursday, August 13, 2009
Fed a Rudderless Ship? / Interest-Rates / Central Banks
By: Axel_Merk
How much excitement can a statement by the Federal Reserve’s Open Market Committee (FOMC) generate? Given that the Fed has been printing over a $1 trillion of fresh currency over the past year, more are indeed taking note when the Fed speaks.
Read full article... Read full article...
Thursday, August 13, 2009
Bernanke, Do You Have The Cojones To Raise U.S. Interest Rates? / Interest-Rates / US Interest Rates
By: Mike_Whitney
Mike Whitney writes: Booyah. It's morning in America. The jobless numbers are stabilizing, the stock market is sizzling, quarterly earnings came in better than expected, traders have turned bullish, housing is showing signs of life, and clunker-swaps have given Detroit a well-needed boost of adrenalin. Even Cassandra economists --like Paul Krugman and Nouriel Roubini--have been uncharacteristically optimistic. Is is true; did we avoid a Second Great Depression? Is the worst really behind us?
Monday, August 10, 2009
Treasury Bond Holders Receive a Pasting, Though Seasonal Influences Remain Bullish / Interest-Rates / US Bonds
By: Levente_Mady
The bond market got pasted last week. While the trend in bonds has been sideways, it is noticeable that there has been a fairly predictable cycle within the course of each month related to the Treasury auction calendar. The first week of the month has the announcement for the long auction cycle consisting of 3-10-30 year auctions to be conducted during the second week.
Read full article... Read full article...
Tuesday, August 04, 2009
Derivatives Interest Rate Swaps, The Elephant In the Room: More Pieces of the Puzzle / Interest-Rates / Credit Crisis 2009
By: Rob_Kirby
This following article was an address by Rob Kirby at the Gold Anti-Trust Action Committee Inc., GATA Goes to Washington -- Anybody Seen Our Gold?, at the
Hyatt Regency Crystal City Hotel, Arlington, Virginia, Saturday, April 19, 2008. The original address has been updated and added to since new information has come to light.
Read full article... Read full article...
Tuesday, August 04, 2009
U.S. Treasury Bond Market Expected to Surprise to the Upside / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded sideways in July. This is remarkable in light of the events that have transpired last month in the financial markets. The risk trade remained in vogue for another month as stocks, commodities and peripheral currencies powered ahead. Chinese equities have almost doubled from their lows and they have led the charge in emerging market equities. Market participants however fully realize that efforts to re-flate prices only have a chance in a steady to declining interest rate environment.
Read full article... Read full article...
Thursday, July 30, 2009
Economic Statistical Deceptions to Sell U.S. Treasury Bonds / Interest-Rates / Market Manipulation
By: Paul_Craig_Roberts
Last week on NPR a professor in the Sloan School of Management at MIT explained that what is really at stake in the health care bill is the US government’s ability to borrow. In other words, the bill is about cutting health care costs, not about providing hard-pressed Americans with health care.
Thursday, July 30, 2009
Hidden Flaw in Bernanke's Fed Money Printing Exit Strategy Could Trigger Depression / Interest-Rates / Quantitative Easing
By: Money_Morning
Shah Gilani writes: At its most basic level, the U.S. Federal Reserve’s so-called “exit strategy” is designed to let government bailout and liquidity programs unwind on their own, as markets return to a state of “normalcy.”
Wednesday, July 29, 2009
U.S. Govt Yuan Bond Threat to U.S. Dollar / Interest-Rates / US Dollar
By: Jim_Willie_CB
The tables are fast turning against the deeply indebted USGovt officials. USA Inc is in deep trouble. Its productive engines in both finance and industry are either wrecked or sputtering, even as its debt burden grows exponentially. Debt default litters the landscape. Next its sovereign bonds will be have to be sold to some extent outside the US$ Sphere, which will put at great risk its stock, namely the USDollar itself. Let’s call them USGovt Dragon Bonds.
Wednesday, July 29, 2009
Foreign Investment Flows into U.S. Treasuries and Money Printing Consequences / Interest-Rates / US Bonds
By: Michael_Pollaro
Obama and Company say... All We Need Is A Little Help From Our Foreign Friends
Oh I get by with a little help from my friends
Mm going to try with a little help from my friends
Oh I get high with a little help from my friends
Yes I get by with a little help from my friends
With a little help from my friends
Refrain to The Beatles “With a Little Help from My Friends”
Read full article... Read full article...
Tuesday, July 28, 2009
Why the U.S. is Financing its Debt at the Short End of the Yield Curve / Interest-Rates / US Debt
By: Michael_Pento
The Greatest Subprime A.R.M. of All is our Debt - It troubles me greatly to know that while the 30 year Treasury bond is yielding a mere 4.6%, we are not locking in that low rate for our newly issued debt. Any thinking American knows it would be best to take advantage of that ridiculously low yield and finance the Treasury’s borrowing at the long end of the curve.
Read full article... Read full article...
Tuesday, July 28, 2009
Trading Eurodollar August 2009 Put Option Update / Interest-Rates / Options & Warrants
By: Patrice_V_Johnson
LONG-TERM TREND (> 1YR) OF THE MARKETS: DOWN
SHORTS LONGS _____________________
None August 2009 Eurodollar (Ticker Symbol: EDQ9)
Monday, July 27, 2009
Real U.S. Treasury Yields Highest In History / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Bloomberg is reporting Real Yields Highest Since 1994 Aid Record Debt Sales.
Sunday, July 26, 2009
Darling Warns UK Banks on Loan Interest Rates / Interest-Rates / UK Interest Rates
By: Sarah_Jones
The Chancellor, Alistair Darling is "Extremely concerned" at the high interest rate being charged to small firms.
Read full article... Read full article...
Friday, July 24, 2009
How to Profit if Bernanke's Quantitative Easing 'Exit Strategy' Fails / Interest-Rates / Quantitative Easing
By: Money_Morning
By Jason Simpkins
writes: After more than a year of lax monetary policy and direct capital infusions, U.S. Federal Reserve Chairman Ben S. Bernanke has finally outlined an "exit strategy" that he says will lead to the "smooth and timely" withdrawal of monetary stimulus and keep inflation at bay.
Thursday, July 23, 2009
How California Could Turn its Debt IOUs into Dollars / Interest-Rates / US Debt
By: Global_Research
Ellen Brown writes: California has over $17 billion on deposit in banks that have refused to honor its IOUs, forcing legislators to accept crippling budget cuts. These austerity measures are unnecessary. If the state were to deposit its money in its own state-owned bank, it could have enough credit to solve its budget crisis with funds to spare.
Wednesday, July 22, 2009
Shorting U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Mike_Paulenoff
The bond, TLT, TBT charts and technicals are urging me to get short the long end of the yield curve...looking for longer term rates to climb in the days ahead. My near-term work in the ProShares UltraShort 20+ Year T-Bond ETF (NYSE: TBT) argues that the upmove off of the July lows at 48.01/05 exhibits very bullish form, in the aftermath of the completion of a major correction from the 6/10 high at 59.97 into the July lows.
Wednesday, July 22, 2009
Bernanke Revealing Statement on Accommodative Monetary Policy / Interest-Rates / Quantitative Easing
By: Brian_Bloom
In my article entitled “Case against Hyperinflation” dated June 30th 2009, I attempted to explain, in very broad brush terms, how the Fed might head hyperinflation off at the pass. It fell short of what Bernanke outlines in his article but, thankfully, not so short as to be an embarrassment to me J. Clearly, Bernanke believes he is on top of what he is doing. From a different perspective it might be a serious mistake to predicate one’s investment strategies on the base assumption that Bernanke is an intellectual hunchback who doesn’t understand what he is about.Read full article... Read full article...
Monday, July 20, 2009
US Treasury Bonds Still Heading Lower / Interest-Rates / US Bonds
By: Frederic_Simons
In our last update for the US Treasury Bonds (click here to view), we could observe a downward reversal in Treasury bonds. This downtrend has gained momentum during the last days, especially in the 30 year US Treasuries. The following chart was send to subscribers on July 15th:
Thursday, July 16, 2009
Background Info on Leading Bond Market ETFs / Interest-Rates / Exchange Traded Funds
By: Richard_Shaw
We find that investors tend to have a clearer understanding of the portfolios behind equity funds than behind bond funds. This blog post is provided to shine some light in a comparative way on the portfolios and recent performance of several leading bond ETFs.
To be clear, we are not recommending any particular asset allocation or fund in this post — just providing background information that may be helpful in a general way.
Read full article... Read full article...
Thursday, July 16, 2009
California's Debt Crisis as Bond Holders Lose Confidence in the States Ability to Repay / Interest-Rates / US Debt
By: John_Browne
Bad for the Goose, Worse for the Gander - Last week, major banks announced they would no longer offer cash for the IOU's written by the state of California. At the same time, China proposed that the U.S. dollar be replaced as the world's official reserve currency. Although seemingly unrelated, these two developments have at their root the same issue: uneasy creditors.
Sunday, July 12, 2009
Fed Gets It Wrong, Credit Crisis Losses Rising Everywhere / Interest-Rates / Credit Crisis 2009
By: Money_and_Markets
Mike Larson writes: Remember when policymakers at the Federal Reserve told us in 2007 and 2008 that the credit problems were “contained” to the subprime mortgage sector? Or when then-Treasury Secretary Henry Paulson spouted the same line?
Friday, July 10, 2009
US Treasury Bonds Retracement, But Still Bullish / Interest-Rates / US Bonds
By: Frederic_Simons
Desperate bond bears got their retracement in the 30 year treasury bond yesterday, as it gave back some of the huge gains of the last days. However, this does not change the bullish picture that can be observed when looking at the short and intermediate term charts.
Friday, July 10, 2009
Rising Interest Rates, the Governments Worst Nightmare / Interest-Rates / US Debt
By: DailyWealth
Brian Hunt writes: The government's worst nightmare is off the table for now.
Friday, July 10, 2009
How to Earn 18% Interest From the Government / Interest-Rates / US Bonds
By: DailyWealth
Dr. Steve Sjuggerud writes:
Here in Florida, counties are desperate for money...
Where I live on the Florida Coast, the main source of county government revenue is property taxes. The problem is, more people than ever are not paying their property taxes.
Thursday, July 09, 2009
Fixed Mortage Interest Rates Still Rising / Interest-Rates / Mortgages
By: MoneyFacts
The cost of fixed rate mortgages continues to rise, even though swap rates have continued to fall during the past month.Read full article... Read full article...
Thursday, July 09, 2009
Irrelevant UK Base Interest Rate on Hold as Real Rates have Already Begun to Rise / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England is expected to keep UK interest rates on hold at 0.5% today for a fourth month. However the deep interest rate cuts have failed to lift the economy out of recession, hence the reason why the Bank of England has detonated the monetary policy equivalent of a nuclear bomb in the form of Quantitative Easing, printing £125 billion of electronic money primarily to monetize government debt to help finance the huge annual budget deficit that is mushrooming towards £180 billion for 2009 alone by artificially keeping longer term interest rates lower.
Wednesday, July 08, 2009
The True Cost of 0.25% Interest Rate / Interest-Rates / US Interest Rates
By: Adrian_Ash
"Hey! If banks won't lend at low-to-zero rates of interest, maybe we should try sub-zero rates instead..."
IT'S NO BIG DEAL at present – only about $200 in fact.
Read full article... Read full article...
Tuesday, July 07, 2009
California Bankrupt, If You Live in California, Here's What You Do... / Interest-Rates / US Bonds
By: DailyWealth
Dr. Steve Sjuggerud writes: Would you lend money to someone who is completely broke and in a mountain of debt... and only demand 3.75% interest?
That's what California is forcing many people to do today.
Monday, July 06, 2009
Monster U.S. Treasury Bond Supply, a Game Changing Event? / Interest-Rates / US Bonds
By: Michael_Pollaro
For the US Treasury bond market it’s time for some reflection. What we have in front of us could be “game-changing.” This, from a June 7 Bloomberg essay entitled, Treasury’s Summer Rally Not This Year Due to Supply:
Sunday, July 05, 2009
Treasury Bonds, Not the Time to Become a Bear (yet) / Interest-Rates / US Bonds
By: Frederic_Simons
Despite all hyper-inflation scenarios that can be read about in almost every financial newspaper and market commentary nowadays, the 30 year Treasury Bond (ZB September 09) has been in a steady uptrend for quite a while now, advancing from a low of 111'215 on 6/11/09 to a high of 119'095 this past week.
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.
Read full article... Read full article...
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.
Read full article... Read full article...
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.
Read full article... Read full article...
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.
Read full article... Read full article...
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.
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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.
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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%.
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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.
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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:
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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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 .
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