Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, November 16, 2010
Analysis of QE2 Success or Failure at Lowering Bond Market Interest Rates / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Curve Watchers Anonymous is investing Bernanke's claim that QE II has already been a success at lowering treasury rates.
Tuesday, November 16, 2010
Ireland Bailout Threatens to Reignite Euro Debt Crisis / Interest-Rates / Global Debt Crisis
By: Money_Morning
Don Miller writes:
Ireland's reeling banking system, and the government's reluctance to accept outside help, is threatening to reignite the European debt crisis that nearly led to the demise of the European Union (EU) and its currency last spring.
EU officials are trying to persuade Irish officials to shore up the country's devastated banking sector with a possible $100 billion (73.5 billion euros) aid package as Irish policymakers continue to insist that the financially troubled nation doesn't require a bailout.
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Monday, November 15, 2010
Shocked that QE2 is Akin to Printing Money and Public Debt Monetization! / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
Every student who took Econ 101 and stayed awake during the lectures learned that the Federal Reserve has the power to create credit figuratively "out of thin air." The A-students also learned that the commercial banking system, not individual banks, under the fractional-reserve system that we and every other developed economy has also has the power to figuratively create credit out of thin air if the Federal Reserve first provides the "seed" money to do so. This is not unique to the Federal Reserve and the U.S. commercial banking system. This holds wherever there are central banks and fractional-reserve commercial banking systems. So, when there is an increase in the sum of Federal Reserve credit and commercial banking system credit, credit is created out of thin air, which is akin to "printing money."
Monday, November 15, 2010
Growing Signs of Renewed Debt Crisis in Europe / Interest-Rates / Global Debt Crisis
By: Global_Research
Stefan Steinberg writes: There are growing signs of a renewed debt crisis in a number of European nations, as bond yields soar to record highs and the continent’s economic growth stagnates.
The heads of leading European countries took the exceptional step of using the Group of 20 meeting in Seoul to announce that the European Union had confidence in the measures undertaken by Irish leaders to address the nation’s budget deficit. At the same time, the leaders of Germany, France, Italy and the United Kingdom issued a statement declaring that the EU had no plans for an additional bailout of European nations until at least 2013.
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Monday, November 15, 2010
Fed QE Money Printing Getting Even Wilder! / Interest-Rates / Quantitative Easing
By: Martin_D_Weiss
I’ve seen a lot of crazy monetary shenanigans in my lifetime — in Brazil, Japan and elsewhere.
But I’ve never seen anything quite like the explosion of out-and-out money printing we’re witnessing in the United States today.
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Sunday, November 14, 2010
Bankrupting Ireland in Economic Depression Announces Policy of Quantitative Cheesing / Interest-Rates / Global Debt Crisis
By: Nadeem_Walayat
Ireland's economic depression is intensifying as the economy remains in recession and Irish bonds plunged sending yields soaring on concerns of more banking sector losses that continue to send Irelands public debt and liabilities soaring as the bankrupt banks continue offload their huge losses onto Irish tax payers, that negates all of the austerity pain suffered to date, which requires even more sacrifice to ensure that the bankster's and bond holders are bailed out 100%, resulting in an country bankrupting annual budget deficit of 32%, which Ireland cannot monetize through money printing.
Saturday, November 13, 2010
Sterilizing Money at the QE Corral / Interest-Rates / Quantitative Easing
By: Richard_Daughty
There are a lot of intricacies in the Federal Reserve's evil ways, especially as concerns creating $900 billion in the next six months in another round of quantitative easing, and one of them is explained by Daniel R. Amerman of DanielAmerman.com. He says, "There is something else essential for investors and savers to understand about the process which the Federal Reserve has just outlined. The Federal Reserve is not directly purchasing treasury bonds from the US government. Instead, US banks are purchasing the bonds from the US Treasury to fund the deficit, and then selling an equal amount of other bonds (likely at a nice profit) to the Federal Reserve."
Friday, November 12, 2010
QE2, They Just Don't Get It / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
No, I am not talking about the Democratic Party. I am talking about the mainstream commentators on the Federal Reserve's second round of quantitative easing, or QE2. In their defense, perhaps one of the reasons they don't get is because the way the Fed, itself, marketed it. This might suggest that the Fed doesn't really get it either. Firstly, the fact that the Fed announced that QE2 would involve the purchase of Treasury coupon securities rather than Treasury bills implied that one of the goals of QE2 was to bring down the interest rate levels on longer-maturity securities. Why is it so desirable to bring down the yield on longer-maturity securities? Because for decades, economists have clung to the unsubstantiated hypothesis that the interest rates on longer-maturity securities are what "count" in terms of decisions related to private-fixed investment expenditures.
Friday, November 12, 2010
Bernanke QE2 Program Backfiring! Global Money War Intensifying! / Interest-Rates / Quantitative Easing
By: Mike_Larson
The reviews are coming in fast and furious — and they’re downright terrible!
I’m not talking about the latest romantic comedy or action movie. I’m talking about the reviews of the Federal Reserve’s quantitative easing, or “QE2,” program! Get a load of these comments …
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Thursday, November 11, 2010
BAC Rallying in Sync with U.S. Treasury Bonds TBT ETF? / Interest-Rates / US Bonds
By: Mike_Paulenoff
The enclosed comparison chart supports my sense that the banks in general, and Bank of America (BAC) in particular, are sensitive to the recent shift in the shape of the yield curve. In a loose sort of way, the patterns between the ProShares UltraShort 20+ Year Treasury (TBT) and BAC exhibit some pattern similarity. Certainly, the April-August downtrends paralleled closely, which represented a relentless decline in longer-term interest rates (TBT) concurrent with the declining price of BAC.
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Wednesday, November 10, 2010
Bernanke’s Money Printing Monetary Policy Is Doomed! / Interest-Rates / Quantitative Easing
By: Claus_Vogt
Last week Ben Bernanke wrote an article for The Washington Post to justify the Fed’s decision of another round of quantitative easing. Here’s his core argument:
Read full article... Read full article...“Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment.
Wednesday, November 10, 2010
Foreign Government's No More U.S. Treasury Debt Purchases Would be Bullish for Commodities / Interest-Rates / US Debt
By: Gary_North
The familiar slogan of investing is this: "Timing is everything." If true, then Ben Bernanke had a bad week. Calling it a bad week barely does justice to it.
On November 2, the American people went to the polls in the greatest numbers in history for a mid-term election and threw out Democrats in the House of Representatives. If the Senators had all been up for re-election, the Democrats would have lost their majority. It was the largest reversal in the House since 1938, when Roosevelt's Supreme Court-packing scheme led to a huge veto at the polls by Republicans – an event not mentioned in the (universally) pro-Roosevelt history textbooks. The textbooks do admit that Roosevelt knew that he had gone too far. He never mentioned the plan again. It was the only major defeat of his Presidency.
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Tuesday, November 09, 2010
Bond Market Disaster For Treasury, Municipal and High Yield Bond Investors / Interest-Rates / US Bonds
By: EWI
Elliott wave analysis can warn you of trend changes when the rest of the investment public least expects a market reversal. With that in mind, we have created a new report for our free Club EWI members: "The Next Major Disaster Developing for Bond Holders."
Tuesday, November 09, 2010
Fed Accelerating Cycles of Money Pritning Without Exit Strategy / Interest-Rates / Quantitative Easing
By: Peter_Schiff
While it's true that history repeats itself, the patterns should always be separated by a generation or two to keep things respectable. Unfortunately, in today's economic world, it seems the cycle can be counted in months.
Friday, November 05, 2010
Beware The Fed Money Printing Tide / Interest-Rates / Quantitative Easing
By: John_Browne
This week, desperation became palpable at the Fed. In both the formulaic statement that accompanied its FOMC policy decision and Chairman Ben Bernanke's unusual (and clumsy) Washington Post op-ed follow up, the guardians of our currency expressed grave disappointment at the slow pace of US economic recovery and emphasized the continued threat of deflation. The Fed is now pledging to defeat this recession using any monetary means necessary. Unfortunately, their embrace threatens to smother our economy.
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Friday, November 05, 2010
Winners and Losers in the Global Money Printing War / Interest-Rates / Quantitative Easing
By: Mike_Larson
There’s a Great Global Money War raging right now — and the U.S. is losing.
That’s the inescapable conclusion I draw from the market action I see on my screens … the headlines coming across the tape … and the actions being taken in the financial capitals around the world.
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Friday, November 05, 2010
U.S. Fed Buying $600 Billion in Debt with Debt / Interest-Rates / Quantitative Easing
By: Midas_Letter
Here is the glaring hole in the United States Federal Reserve’s approach to what it calls stimulus, and what history will one day categorize as fraud: You can’t use your own debt to purchase more debt when you can’t repay the original debt. The crime is compounded when you know you’re never going to repay the debt. It amounts to treason to intentionally destroy the integrity of the nation’s money. The Federal Reserve’s ability to “purchase” U.S. Treasury Bills is completely dependent on the fact that there is no overseer above the Board of Governors of the U.S. Federal Reserve to call an end to such self-destructive, immoral, and just plain criminal behaviour.
Friday, November 05, 2010
Bernanke Dares The World with QE2 Money Printing / Interest-Rates / Quantitative Easing
By: Brady_Willett
On November 3, 2010 the Federal Reserve Board announced another round of money printing (aka quantitative easing), and yesterday Chairman Bernanke defended the Fed's actions in the Washington Post. It is unusual for Mr. Bernanke to use the op-ed format to impart the Fed's thought process. This speaks to the fact that while so many are aware of the risks of QE2, so few see the potential benefits. Before some thoughts on QE2, first an overview of Bernanke's commentary.
Friday, November 05, 2010
South Korea, Hong Kong, Brazil, China, Complain about Bernanke's QE Policy / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
A parade of countries have expressed grave concerns over the Fed's misguided Quantitative Easing policy.
South Korea Aggressively Considers Curbing Capital Inflows
Thursday, November 04, 2010
Fed QE2, Insanity Prevails Over Common Sense / Interest-Rates / Quantitative Easing
By: Andy_Sutton
It certainly looks as though once again insanity has prevailed over common sense. In what has become a recurring theme in our world, particularly from a policy standpoint, the Federal Reserve announced another round of government bond purchases, dubbing the effort ‘QE2’. I wonder if QE2 is any relation to R2D2 from the popular Star Wars series? I think a rather strong argument could be made that the little guy has more common sense than the entire board of Fed governors. All jest aside, however, there are rather serious ramifications to this latest round of pumping; especially since there is no reason to believe the results will be any different than the last effort. Banks and the Government will maintain the status quo while Main Street languishes.