Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, October 14, 2010
Will QE2 Go Corporate? / Interest-Rates / Corporate Bonds
By: Dr_Jeff_Lewis
Our friends on the bond markets have put their money where their mouths are with huge positions made in the past few weeks on short term government debt, demonstrating the likeliness that the Federal Reserve will force quantitative easing round two and buy up billions—maybe trillions—of dollars of debt.
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Thursday, October 14, 2010
A Plunge into a Monetary No Man’s Land / Interest-Rates / US Interest Rates
By: Bob_Chapman
The question keeps swirling around regarding the Fed and just how much Treasury paper they can buy from the market under current rules. Our guess is about $1.7 trillion. A good part of that may well be in notes, which will probably keep long dated rates low. On the other hand they may increase the current limit, and buy everything in sight.
Thursday, October 14, 2010
America's Bright Future After U.S. Treasury Debt Default / Interest-Rates / US Debt
By: Gary_North
It is easy to make a case for east Asia's economic success, but only over the next two decades. East Asia's economies are growing because their economies are being freed by decisions by politicians to reduce government regulations. But they all have two major problems: (1) the extreme boy/girl birth ratio of at least 120 to 100; (2) the threat of a rapidly aging population after 2025 or 2030. Economist Nick Eberstadt has been writing about this for a decade.
Thursday, October 14, 2010
Key U.S. Treasury Bond Yields When QE1 Was Put in Place / Interest-Rates / US Bonds
By: Asha_Bangalore
The Fed announced plans to purchase government-sponsored enterprise (GSE) debt [$100 billion] and mortgage backed securities [$500 billion] on November 25, 2008 and increased the size of these purchases on March 18, 2009 to $200 billion and $1.25 trillion, respectively. Purchase of $300 billion of longer-term Treasury securities was also announced on the same day in March 2009.
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Wednesday, October 13, 2010
Investors Inflating the U.S. Treasury Bond Bubble / Interest-Rates / US Bonds
By: Richard_Daughty
Last week, bond prices were so high that a two-year government note yielded a miniscule 0.43%. To get more than one percent interest, you have to accept the five-year Treasury note yield of 1.32%. The ten-year yield? 2.60%. The 30-year long bond? A laughable 3.78%! Hahaha! This is insane!
Sunday, October 10, 2010
$2 Trillion False Flag Event at the U.S. Treasury, The Fed’s Furtive Filching / Interest-Rates / Quantitative Easing
By: Barry_M_Ferguson
$2,000,000,000,000.00 dollars has been stolen from the US Treasury!! What happened? Who did it? Did they get away with it?
The answers: A ‘false flag’ event, the Federal Reserve, and yes.
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Saturday, October 09, 2010
Bernanke's Declaration of Independence, U.S. Treasury Junk Bond Future / Interest-Rates / US Bonds
By: Gary_North
Ben Bernanke gave a grim speech on October 4. It did not get media attention. That was because it was so grim.
It was on the looming fiscal crisis of the Federal government. There will be no easy way to avoid it, he said. Congress has to decide what spending to cut. This means that Congress must decide which special-interest groups to alienate. Then it must decide which taxes to raise. Whose ox will get gored?
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Saturday, October 09, 2010
The Golden-Real Estate Project / Interest-Rates / Global Debt Crisis
By: Richard_Daughty
Japan has taken an interesting approach to preventing people from accumulating so much debt that they default; The Wall Street Journal reports that Japan has a new law "restricting total loans from all lenders to one-third of a borrower's income." Hmmm! Criminal penalties for accumulating too much debt? Wow!
Friday, October 08, 2010
The Fed’s Big Money Printing Tease Continues! / Interest-Rates / Quantitative Easing
By: Sy_Harding
The Fed is not saying whether it will or won’t.After its worst August in years the stock market has rallied back strongly in spite of growing indications that the economic recovery has stalled and is now slowing at a disturbing pace. The catalyst has been the market’s expectation that the Federal Reserve will initiate a second round of policy ‘easing’ that will re-stimulate the recovery.
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Friday, October 08, 2010
The Incredible Two-Day $144 Billion Jump in US Treasury Debt / Interest-Rates / US Debt
By: Richard_Daughty
Things are getting so, so, so weird that I was locked inside the Mogambo Bunker Of Panic (MBOP), looking through the periscope to keep a vigilant watch for the social explosion outside that was coming, I figured, so, so soon, with my finger on the trigger of something fully loaded and reassuringly .45 caliber, and a slice of yummy pizza in my one free hand to keep my energy level up via the universal Magic Of The Pepperoni (MOTP).
Friday, October 08, 2010
As QE2 Money Printing Looms, Is the Fed Focusing on the Wrong Things? / Interest-Rates / Quantitative Easing
By: Money_Morning
Martin Hutchinson writes:
U.S. Federal Reserve Chairman Ben S. Bernanke is looking forward to 1932.
That's not a misprint. Actually, Bernanke is looking forward to a point when the challenges facing today's U.S. economy mirror the problems of that particular Great Depression-era year. And he wants that to happen for a very simple reason.
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Friday, October 08, 2010
Fed QE2 Rhetoric Tied to Mandate of Full Employment and Inflation Stability / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
Financial markets are largely convinced the Fed will embark on QE2 at the November 2-3 FOMC meeting. Bernanke's speech on August 27 was the trigger, followed by the FOMC policy statement on September 21 and recent rhetoric of Fed officials Dudley, Evans, and Rosengren. The dollar has lost significant ground vis-à-vis its major trading partners and others (see chart 1) in a short span to time.
Thursday, October 07, 2010
Debt Alarm, Financial Toxic Waste Continues to Unravel, Loan Assets Created Out of Thin Air / Interest-Rates / Global Debt Crisis
By: Matthias_Chang
DEBTCON-1 (as in DEFCON-1, the highest level of the alarm system for impending military threats/crisis) have been triggered, but the FED, global central banks and regulatory authorities are still in deep denial and treat the ongoing global financial crisis as still in the state of DEBTCON-5 (i.e. DEFCON-5, the lowest threat alert).
Thursday, October 07, 2010
Japan, U.S. Prepare For More Money Printing / Interest-Rates / Quantitative Easing
By: Chris_Ciovacco
Stalling economies around the globe have prompted central bankers to increase their asset purchase or quantitative easing programs. As central banks print money to purchase assets, they increase the amount of paper dollars in the economy, which is often referred to as “inflating the money supply” or “debasing a currency”. We will continue to look for good entry points to add to our gold positions in numerous client accounts. Our current holdings in copper, silver, oil, and gold can help us protect our purchasing power should central banks be successful in their attempts to create positive inflation via currency debasement.
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Thursday, October 07, 2010
Bank Credit: Securities vs. Loans - Guidance about Lags from History / Interest-Rates / Credit Crisis 2010
By: Asha_Bangalore
The role of bank credit in economic recoveries was the theme of the August U.S. Economic and Interest Rate Outlook (Bank Credit: One Month Does Not Make a Trend, But..). The main conclusion of the commentary: A lack of growth in bank credit is the major culprit behind the lackluster recovery. Chart 1, a repeat from the August commentary, illustrates the close link between bank credit and economic growth.
Wednesday, October 06, 2010
Bank of Japan Goes "All In" To Stem Deflation / Interest-Rates / Japanese Interest Rates
By: James_Pressler
In an attempt to fight off worsening deflation and prevent the economy from falling into another recession, the Bank of Japan (BoJ) announced its largest foray yet into the realm of quantitative easing (QE). It lowered its benchmark interest rate to between zero and 0.1% (effectively 0%), set up a ¥5 trillion ($59.7 billion) fund to purchase government and corporate bonds, and also created a ¥30 trillion lending facility using those assets as collateral. The breadth of such QE measures caught the market off-guard and dispelled most concerns about the BoJ being too timid in the face of another economic downturn. And yet, even though the BoJ seems to be placing its largest wager ever on the table, we cannot help but ask: Is it enough?
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Wednesday, October 06, 2010
Bank Excess Reserves Have to Decline for Fed Policy to be Successful / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
The nature of recent Fed rhetoric has raised the probability of a second round of quantitative easing (QE) as early as the November 2-3 FOMC meeting. New York Fed President Dudley's speech on October 1 makes a case for this action. Irrespective of Fed action on November 3, excess reserves of the banking system have to decline noticeably for self-sustained robust economic growth to occur. Excess reserves of the banking system, stood at $976 billion for the week ended September 22 and are down from a high of 1.192 trillion (see chart 1) in February 2010. Ideally, excess reserves have to be a negligible entity.
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Tuesday, October 05, 2010
Fed Crossing the Line? / Interest-Rates / Central Banks
By: Axel_Merk
William Poole writes: New York Federal Reserve Bank (Fed) president Bill Dudley’s speech Friday attracted much press attention, as it should have. His speech is correctly read, as in the press commentary, as providing a broad hint of more policy easing to come. During my tenure as president of the St. Louis Fed, I overlapped with Dudley, who, along with being president of the New York Fed, is Vice Chairman of the Federal Open Market Committee (FOMC). I know him to be a competent and cautious policymaker. It is hard for me to believe that he would not have cleared this speech with Chairman Bernanke before presenting.
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Tuesday, October 05, 2010
Why Certificates of Deposit (CD's) are More Attractive than U.S. Treasury Bonds Today / Interest-Rates / US Bonds
By: Nilus_Mattive
Last week I told you why many mutual fund investors could be setting themselves up for serious losses in Treasury bonds.
Just to recap — the idea was that mutual funds often buy and sell before their bonds reach maturity, which can translate to big losses for fund holders if interest rates rise. And the upshot was that, if you wanted to truly guarantee against any type of loss, you would have to hold individual bonds to maturity.
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Tuesday, October 05, 2010
Still Bullish on Bonds, Don't Buy the Stock Market Yet / Interest-Rates / International Bond Market
By: John_Mauldin
As readers know, I was in Europe a few weeks ago, making a LOT of presentations. My London-based partners seem to feel that an hour or two of down time is wasted and only for sissies. I learn as much as I impart, and come away with lots of interesting information. Every now and then I learn something that gets into the category of what in the wide, wide world of (multiple expletives deleted) economics is going on? Subprime was like that when I first read about it. Could you really design CDOs that were so patently absurd and then sell them to the Europeans and Asians? Turns out you could.