Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, July 05, 2010
U.S. Treasury Bonds Rally on Disturbingly Weak Fundamental Data / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was stronger again last week as bonds rallied with help from more, persistent disturbingly weak fundamental data and an equity market that is still in search of a bottom.
Read full article... Read full article...
Friday, July 02, 2010
The Link Between Public Debt and Private Wages / Interest-Rates / US Debt
By: Adrian_Ash
BETWEEN V.E. Day in 1945 and June 1947, the United States shrank its armed forces from twelve million people to around 1.5 million.
The impact on the economy – and on the US Treasury's then record debts – is hard to overstate...
Read full article... Read full article...
Friday, July 02, 2010
Euribor’s Wobble, How Nervous Should We Be? / Interest-Rates / Euro-Zone
By: Seven_Days_Ahead
Since the beginning of May, Euribor has traded in a clearly defined sideways pattern. Our analysis of this contract had broadly been that it had little room to rally further due to the economic recovery clearly underway, but no reason to turn into a bear market yet since that recovery was still too fragile.
Thursday, July 01, 2010
US Treasury Bond Holders Have Nothing to Fear today, Just Look How Low Yields Are! / Interest-Rates / US Bonds
By: Adrian_Ash
"BOY, the bond vigilantes are really on the warpath," jokes Paul Krugman, noting in his blog at the NY Times that 10-year Treasury yields ended Tuesday below 3.0%.
Thursday, July 01, 2010
Municipal Bonds Crisis, I Get A Pat On the Back From Warren Buffett / Interest-Rates / US Bonds
By: Graham_Summers
Back in February 2010 ago, I wrote an article titled, The Municipal Bond Crisis is About to Begin. The main points presented in that piece were all based on simple common sense. The were:
- Most state governments are broke or in the process of going broke
- Tax receipts were falling (so less money for state coffers)
- Muni bonds would collapse as governments chose to default rather than honor their payments
Wednesday, June 30, 2010
Eurozone and U.S. LIBOR Interbank Interest Rates Divergence / Interest-Rates / Credit Crisis 2010
By: Paul_L_Kasriel
A Tale of Two Cities - New York vs. Frankfurt - Chart 1 shows the recent behavior of the 3-month interbank loan rates in U.S. dollars and euros. Both in dollar and euro terms, these interest rates began drifting up in the second half of April as the Greek, Portugal and Spain (GPS) sovereign debt challenges came to the fore. If GPS were to default on its sovereign debt, this would have an adverse impact on some European banks. These potential losses for European banks caused interbank lending to "tighten up," thereby driving up interbank loan rates.
Tuesday, June 29, 2010
Facing Debt Reality, Most of the So-called Developed World is Broke / Interest-Rates / Global Debt Crisis
By: David_Galland
by David Galland, Managing Editor, The Casey Report writes:
Scanning through a local newspaper this week, I came across a letter to the editor that speaks volumes about the popular misconceptions that are dragging this country, and the world, to its knees.
Tuesday, June 29, 2010
Four Reasons Why the Fed Will Try Quantitative Easing / Interest-Rates / Quantitative Easing
By: Dr_Jeff_Lewis
While we were led to believe that the Fed would begin tightening upon recovery, new fears of a double dip have sparked the Keynesian clan into moving in the opposite direction. Soon enough, we believe, a new quantitative easing program will be unveiled.
Read full article... Read full article...
Tuesday, June 29, 2010
The Social Function of Credit Default Swaps / Interest-Rates / Credit Crisis 2010
By: Philipp_Bagus
Whenever the government causes a mess, chances are high that it will accuse speculators of being responsible.[1] In the recent financial crisis, speculators and their financial instruments have been under attack again. Some famous investors have even supported governments' attacks on speculators. Warren Buffet has called derivatives "financial weapons of mass destruction."
Monday, June 28, 2010
Fed Credit, Inflation and the Idiots in the Middle / Interest-Rates / US Debt
By: LewRockwell
A whole series of alarms occurred after I got the news, although I lost the source, that “food stamp usage just soared to a new record high” of 40.2 million persons.
This number is alarming in itself because it means that the economy is so bad that more and more hungry people cannot afford to even feed themselves, sort of like teenagers, but with hopefully better manners and dietary choices.
Read full article... Read full article...
Monday, June 28, 2010
Weak Economic Data Sends Treasury Bond Prices Higher / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was stronger last week as bonds rallied with help from disturbingly weak fundamental data and a fading equity market. The final release of the first quarter GDP figure was revised down from the first cut of 3.5% to 3.0% on the second look and finally to 2.7% on last week’s figure. Honestly it is beyond me how consensus can still be looking for 3-4% growth during the second half of 2010 in the US and Canada! From my vantage point we will be lucky to print a positive number by the last quarter on either side of the border. The front end of the economy is in shambles, the Fed is out of easing bullets as it is already at 0% and the newly found fiscal responsibility across the globe is certainly highly advisable but its short term impact will most likely be quite painful.
Read full article... Read full article...
Friday, June 25, 2010
U.S. Treasury Bond TLT ETF Pressuring Resistance / Interest-Rates / US Bonds
By: Mike_Paulenoff
The iShares 20+ Yr T-Bond ETF (NYSE: TLT) continues to trade in a high-level coil-type pattern that is putting increasing upward pressure on the 100.00 resistance plateau amidst deteriorating economic data, an uncertain business environment, and defensive equity markets.
Read full article... Read full article...
Friday, June 25, 2010
When It Comes to Increasing Aggregate Demand, What's Fiscal Policy without Monetary Policy? / Interest-Rates / US Interest Rates
By: Paul_L_Kasriel
Not much. Suppose the central government decides to increase spending without increasing taxes. Where do the funds come from? From entities who are willing to lend. If those lending entities are the nonbank public, for the most part, all this does is transfer spending power to the central government from these entities. Net, net, total spending in the economy does not increase. Rather, there is just a change in the distribution of spending.
Read full article... Read full article...
Thursday, June 24, 2010
U.S. Treasury Bonds Look Attractive / Interest-Rates / US Bonds
By: Guy_Lerner
There are two trades in this market: the risk trade and the non-risk trade. The risk trade is in equities and all the other assets, like commodities, real estate and emerging markets, that have become highly correlated to equities. The non-risk trade is in bonds. This works when equities don't. With the bounce in equities sputtering (but not having rolled over yet), Treasury bonds are looking attractive.
Tuesday, June 22, 2010
Fed’s Next Move is to Ease U.S. Interest Rates / Interest-Rates / US Interest Rates
By: Michael_Pento
The FOMC meets today to discuss their record-low interest rate policy. The announcement of their decision will be released on Wednesday. While no increase in interest rates is expected, there is little doubt amongst investors that the future direction for the central bank’s target rate will be up. In fact, Kansas City Fed President Thomas Hoenig has repeatedly expressed his desire for an increase in overnight lending rates to 1 percent from the current zero-0.25 percent range by the end of summer.
Read full article... Read full article...
Monday, June 21, 2010
Flat U.S. Treasury Bond Market / Interest-Rates / US Bonds
By: Levente_Mady
The bond market was flat and choppy again last week as bonds held their ground even as equities continued to rally. A little less than a month ago we reported that bonds became 2.5 standard deviations expensive to stocks. That is no longer the case as that relationship is closer to neutral now due mostly to the rally in the stock market. The fundamental news remains quite supportive, as most of the data points to non-existent inflation and a slowdown in economic activity.
Read full article... Read full article...
Thursday, June 17, 2010
U.S. Fights Global Debt Crisis Hangover: Getting Drunk in the Process? / Interest-Rates / Global Debt Crisis
By: Axel_Merk
To understand how the ongoing global credit crisis may evolve, let’s look at some cultural and structural considerations. Last decade, despite being told that there may be no money to fund retirement, American consumers ramped up vast amounts of credit card debt; the European consumer, in contrast, reined in spending. Presently, European countries have recognized their debt burdens and are committed to austerity measures – contrast this with the U.S. approach: despite Federal Reserve (Fed) Chairman Bernanke’s warnings about unsustainable deficits, policy makers in the U.S. have proposed a $200 billion mini-stimulus package, advising the world to stimulate consumption now, with little apparent concern over future deficit implications.
Thursday, June 17, 2010
Spain's Financial System on the Verge of Collapse or Speculators Are Exaggerating Banks Vulnerability / Interest-Rates / Credit Crisis 2010
By: Money_Morning
Jason Simpkins writes: Somebody is bluffing.
Either Spain's financial system is on the verge of a breakdown, or hedge funds and speculators are exaggerating the vulnerability of Spain's banks to capitalize on short-selling Eurozone securities.
Read full article... Read full article...
Thursday, June 17, 2010
Vanguard 10-Yr U.S. Treasury Yield Interest Rate Forecast / Interest-Rates / US Bonds
By: Richard_Shaw
According to Vanguard projections (made 3/29/10 for, AAII Journal, June 2010, page 7) 10-yr Treasury rates are implied by the current yield curve to be 4.4%, 5.2% and 5.6% by 1 year, 3 years and 5 years into the future. The current rate (June 15) is 3.32%.
They don't do a great job of explaining just how they got to those projections, but given their huge bond asset base, we think they should be presumed to be well qualified to make the projections.
Read full article... Read full article...
Wednesday, June 16, 2010
U.S. Debt Bomb Detonation Expedited by 5 Years / Interest-Rates / US Debt
By: Michael_Pento
A Treasury Department report to Congress last week stated that total U.S. debt will climb to $19.6 trillion by 2015, as opposed to the 2019 date previously estimated. Treasury also estimated that total U.S. debt will top 13.6 trillion this year and would rise to 102% of GDP by 2015 as well. And most astonishingly, the report projected that the publicly traded debt (debt excluding intragovernmental obligations) would rise to $14 trillion by 2015, up from last year’s debt of “just” $7.5 trillion.
Read full article... Read full article...