Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, August 23, 2014
U.S. Interest Rate Rise to Occur Mid-2015 According to Fed's Williams / Interest-Rates / US Interest Rates
By: Bloomberg
Bloomberg Television's economics editor Michael McKee spoke with San Francisco Federal Reserve President John Williams in Jackson Hole, WY today, who said that very accommodative policy is what's needed now.
Williams said, "...it's clear unemployment is too high and inflation is still too low and it calls for a very strong accommodative policy, and I think that's been a big factor helping our economy recover. And I wouldn't want to see us tightening the policy until we've made further progress in that some time next year."
Friday, August 22, 2014
Negative Real Interest Rates Show Yield Trade in Bubble Territory / Interest-Rates / International Bond Market
By: EconMatters
No Financial Crisis
This is one of my main criticisms of central bank policy, especially the last three years when there was no financial crisis but all the central banks continued to keep interest rates at recession era levels which has incentivized inappropriate uses of capital allocation, and this money being used for yield arbitrage plays would be more beneficial to sustainable growth projects and overall growth in the economy if interest rates were normalized.
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Friday, August 22, 2014
U.S. Interest Rates Can Rise States Fed President / Interest-Rates / US Interest Rates
By: Bloomberg
In an interview with Bloomberg's Michael McKee, Federal Reserve Bank of Kansas City/MO President Esther George said she sees 'significant progress' in the labor market in 2014, "We have seen significant progress in the labor market over the last three years, and particularly this year," gains have been "broad-based, and that's a very encouraging sign."
George told McKee that "Inflation looks to be stable," and "there's every reason to think we should start talking about normalization."
The Kansas City Federal Reserve President also said that we must return the balance sheet to the smallest amount we can and noted that the very large balance sheet has "complicated the process of monetary policy."
Thursday, August 21, 2014
The Bond Market is taking Advantage of Janet Yellen`s Dovishness / Interest-Rates / US Bonds
By: EconMatters
Push the Limits
It has been a common theme in financial markets to push the limits on any possible edge, so if there are restrictions on banks and financial institutions use of leverage, lobby for change, or if activity falls under a certain governmental regulation, alter the activity so that it is classified under a different interpretation so that previous limits can be exceeded.
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Wednesday, August 20, 2014
Ukraine Interest Rates Soars to 17.5% As External Debt Cannot be Repaid / Interest-Rates / Ukraine Civil War
By: Mike_Shedlock
It's crystal clear Ukraine has no interest in a ceasefire under any terms. Instead it demands rebels lay down weapons and for Russia to stop intervention. In short, Ukraine demands surrender.
Thus death and destruction will continue, possibly long after Ukraine takes over Luhansk and Donetsk (or rather what's left of Luhansk and Donetsk).
Wednesday, August 20, 2014
Rising Interest Rates and The End of Stimuland / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
It’s Jackson Hole week, and we’re going to hear a lot of fairy tales and otherwise invented-from-scratch material. Since it may not always be easy to distinguish between pure mud and actual information, let’s destroy a few fantasy piñatas right here and now. So when Yellen and Draghi speak on Friday, you’ll be able to tell a few things apart. It’ll be hard enough, the speech writers and spin doctors won’t get much sleep this week.
Monday, August 18, 2014
Europe Economy Is Tanking, QE Is Coming / Interest-Rates / Quantitative Easing
By: Anonymous
Last year the world kind of forgot about Europe. After ECB head Mario Draghi vowed to “do whatever it takes” to get the Continent growing, the markets calmed down, money got cheap and plentiful and functionally-bankrupt countries like Greece, Italy and Spain stopped making scary headlines. To the casual observer it began to look like the euro project might actually succeed.
Sunday, August 17, 2014
A New Interest Rates Record Is Set... And It Is Foreboding / Interest-Rates / ECB Interest Rates
By: DailyWealth
Dr. Steve Sjuggerud writes: A new record was set in Germany yesterday...
The interest rate on a 10-year government bond in Germany fell below 1%.
This number is shocking... Interest rates have never been this low in German history.
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Sunday, August 17, 2014
Variable Interest Rates World, Japan's Home Buyers Up In ARMS / Interest-Rates / Japanese Interest Rates
By: John_Rubino
Everyone knows that Japan deeply is in debt and one way or another is going to suffer for it. But for those who thought the story couldn't get any worse, well, the creativity of the financial repressors never ceases to amaze.
It turns out that, in addition to a government that borrows way too much money at unnaturally low rates -- guaranteeing that rates can never be allowed to rise because the cost of paying even 2% interest would bankrupt the country -- Japan's homeowners have discovered the joys of adjustable-rate mortgages:
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Sunday, August 17, 2014
The Federal Reserve in Denial Mode - Bond Market Explained / Interest-Rates / US Bonds
By: EconMatters
Business Media Rock Star
On Thursday Mohamed A. El-Erian was on CNBC`s Halftime Report and he said something that a lot of people have been saying regarding the bond market, and it needs to be cleared up, because the amount of poor understanding regarding the bond market by people who make their living, i.e., are in the financial market business is astounding. It is even more mind blowing given that Mohamed A. El-Erian actually worked at a Bond Firm in PIMCO, and helped manage Harvard` s endowment in the past.
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Friday, August 15, 2014
Bonds Persist in Their Warning About the U.S. Economy / Interest-Rates / US Bonds
By: Sy_Harding
Bonds do not like economic strength, but love economic weakness.
It makes sense. In a strong economy there is upward pressure on interest rates, and therefore on bond yields. When bond yields go up, their prices go down.
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Friday, August 15, 2014
Cry for Argentina: Fiscal Mismanagement or Pillage? / Interest-Rates / Global Debt Crisis 2014
By: Ellen_Brown
Argentina has now taken the U.S. to The Hague for blocking the country’s 2005 settlement with the bulk of its creditors. The issue underscores the need for an international mechanism for nations to go bankrupt. Better yet would be a sustainable global monetary scheme that avoids the need for sovereign bankruptcy.
Thursday, August 14, 2014
Government Spending and Negative Interest Rates / Interest-Rates / ECB Interest Rates
By: MISES
Dickson Buchanan writes: In June, the European Central Bank (ECB) made a historic and downright diabolical announcement. They decided to inaugurate negative interest rates for overnight deposits. Here are the details from the official transcript:
Read full article... Read full article...The rate on the deposit facility was lowered by 10 basis points to -0.10 percent. These changes will come into effect on 11 June 2014. The negative rate will also apply to reserve holdings in excess of the minimum reserve requirements and certain other deposits held with the Eurosystem.
Thursday, August 14, 2014
Don't Get Ruined by These 10 Popular Investment Myths / Interest-Rates / Learning to Invest
By: EWI
Interest rates, oil prices, earnings, GDP, wars, terrorist attacks, inflation, monetary policy, etc. -- NONE have a reliable effect on the stock market
You may remember that during the 2008-2009 financial crisis, many called into question traditional economic models. Why did the traditional financial models fail?
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Wednesday, August 13, 2014
Interest Rate Policy Global Divergence - Really? / Interest-Rates / Global Financial System
By: Axel_Merk
If you own dollars, the euro or gold, you might want to pay attention to this one.
What could possibly be wrong with conventional wisdom? It shouldn't be a surprise that pundits merely regurgitate what others say. But why would Draghi join the fray? It turns out, he has a vested interest in the 'policy divergence' view, as promoting it might help to weaken the euro. If indeed the U.S. interest rate path is upward, while rates in the Eurozone stay lower for longer, it might justify a weaker euro.
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Sunday, August 10, 2014
The Bottom Is In For US Treasury Bond Yields / Interest-Rates / US Bonds
By: EconMatters
Russian Invasion Tension
It occurred Friday morning while most traders were asleep in illiquid markets where the 10-Year was forced down to basically 2.35% in Yield first on Ukraine worries over the Russian buildup of troops on the Ukrainian border, and then on the announcement that the US would provide air strikes in Iraq to stem ISIS aggression.
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Friday, August 08, 2014
Argentina's Debt Default: A Devastating Lesson in Unfunded Government Liabilities / Interest-Rates / Global Debt Crisis 2014
By: Peter_Schiff
Dickson Buchanan Jr writes:
Last week, on July 30, the Republic of Argentina was declared to be in default for the third time in 30 years.
Let's put that into perspective. If you were a bank officer who offered a 30-year mortgage to the Government of Argentina in the early '90s you would have spent nearly the entire life of the loan in a perpetual nightmare of refinancing. You would likely be not only fired from your job, but a pariah in the entire industry. This is what Argentina's international creditors and domestic citizens have faced in real life. At the time of writing this article S&P has downgraded Argentina to CCC-, one of the lowest ratings available for sovereign governments.
Friday, August 08, 2014
The QE Could Be Coming to an End – So What? / Interest-Rates / Quantitative Easing
By: Matt_Machaj
It is important to review the minutes released recently by the Fed, since they may well signal a turning point in monetary policy. The programs of active purchasing of government debt and commercial assets may be curtailed. Yet, as we have often discussed at length, it is not the most important element. There are other factors of monetary policy to be considered: interest rates for one, and the Federal Open Market Committee suggested they may start to discuss interest rate hikes. The so called taperie (small version of tapering) process discussed earlier in the Market Overview appears to be slowly finalizing:
Wednesday, August 06, 2014
Confusing Capitalism with Fractional Reserve Banking / Interest-Rates / Global Financial System
By: Frank_Hollenbeck
Today, capitalism is blamed for our current disastrous economic and financial situation and a history of incessant booms and busts. Support for capitalism is eroding worldwide. In a recent global poll, 25 percent (up 2 percent from 2009) of respondents viewed free enterprise as “fatally flawed and needs to be replaced.” The number of Spaniards who hold this view increased from 29 percent in 2009 to 42 percent, the highest amongst those polled. In Indonesia, the percentage went from 17 percent to 32 percent.
Wednesday, August 06, 2014
Inflation Adjusted Bond Prices Tell Different Story on Relative Value / Interest-Rates / US Bonds
By: EconMatters
One of the arguments for why US Bonds are such an attractive investment even at these low yields is that relative to European Bonds the US Treasuries provide such a higher yield, but this analysis is shortsighted because it fails to take into account the factor of inflation. Once you adjust yields based upon inflation it tells investors an entirely different story in regards to relative value of bonds and the comparison is different between European and US Bonds.
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