Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, January 31, 2018
The Most Important Bond In the World Just Broke a 25 Year Downtrend / Interest-Rates / US Bonds
By: Graham_Summers
The single most important bond in the world is the US 10-Year Treasury bond.
According to modern financial theory, this bond, with a duration that is meant to cover a full economic cycle, is generally considered the “risk free” rate of the return for the entire financial system.
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Tuesday, January 30, 2018
US Treasury Bonds: Fuse to Light the Bonfire / Interest-Rates / US Bonds
By: Jim_Willie_CB
Many are the metaphors used to describe the agent that initiates a major crisis. Light the fuse, or pull the trigger, pull the rug out from under the room, or pull on the string for unraveling the sweater, these are commonly heard. What comes soon is the Bonfire of the Vanities, a term the Jackass prefers since irony is thick. Hardly the burning of objects deemed as tempting toward occasions of sin as in the 15th Century. In the present-day case, the burning would be of the massive piles of paper assets the US Federal Reserve has been illicitly supporting for the past several years. The bonfire would be of falsely valued heaps of paper. If truth be known, the Quantitative Easing was put in place in 2012 when the big US banks were all in danger of failures. They required amplified liquidity infusions in order to prevent these giant silos of insolvency from entering financial failure. Their huge bond holdings were supported. Generally, when insolvency meets illiquidity, big failures occur. The USGovt and USFed colluded to prevent the entire set of Wall Street banks from failing like Lehman Brothers did. They all had the same ugly insolvent traits. Few tell the story correctly, but Goldman Sachs and JPMorgan suffocated Lehman to death. Lehman did not fail without help. Like Chief Justice Scalia, Lehman was suffocated in a bed of unpaid bond sales. What comes next is a nasty corrosive dangerous sequence of financial market crises, where pumped paper assets suffer notable declines. It will include the stock, bond, and currency markets. The last times all three suffered simultaneous declines was 1979 and 1987. Add soon 2018.
Tuesday, January 30, 2018
Illinois’ Debt Crisis Foreshadows America’s Financial Future / Interest-Rates / US Debt
By: MoneyMetals
Those wanting a glimpse into the future of our federal government’s finances should have a gander at Illinois. The state recently “resolved” a high-profile battle over its budget. Taxpayers were clubbed with a 32% hike in income taxes in an effort to shore up massive underfunding in public employee pensions, among other deficiencies.
But, predictably, it isn’t working. People are leaving the state in droves.
In fact, Illinois now leads the nation in population collapse. Statistics show people leaving the state at the rate of 1 every 4.3 minutes and the state dropped from 5th place to 6th in terms of overall population.
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Tuesday, January 23, 2018
Government Shutdown Ends – Markets Ignore Looming Debt and Bond Market Threat / Interest-Rates / US Debt
By: GoldCore
– U.S. Senate pass a temporary spending plan through Feb. 8 to end shutdown
– Markets shrug off both government shutdown and re-opening
– Markets, government and media ignoring worsening US debt position
– Gold responding positively to U.S. dysfunction, rising US Treasury yields & weaker dollar
– U.S. government national debt is $20.6 trillion and increasing rapidly
– ‘Bonds, like men, are in a bear market’ – Bill Gross
Sunday, January 14, 2018
Did China Just Burst the Everything Bubble? / Interest-Rates / US Bonds
By: Graham_Summers
The biggest news today comes from China, which has announced it will “slow or halt” US Treasury purchases.
This is the so-called NUCLEAR option: the threat by China to stop buying US debt. And it’s an absolute game-changer.
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Sunday, January 14, 2018
Bubble Watch: Both the Currency Markets and Bonds Markets See Inflation Coming / Interest-Rates / US Bonds
By: Graham_Summers
If you want to make money investing, you first need to understand the structure of the asset classes in our current financial system,
Everyone likes to go bonkers over stocks, but the reality is that the stock market is in fact one of the smallest and least liquid markets on the planet. All told, US stocks are roughly $26 trillion in market cap.
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Wednesday, January 10, 2018
TMV : 3X Leveraged Short on US Treasury Bonds / Interest-Rates / US Bonds
By: Rambus_Chartology
TMV is a 3 X short the TLT 20 year treasure bond etf. This trade is based on the TLT. For well over three years now the TLT has been building out what looks like a massive H&S top with the top of the right shoulder now in play. I’m going to take an initial position and buy 250 shares of TMV, 3 X short the TLT, and buy 250 shares at the market at 18.83 with the sell/stop on a daily close below the right shoulder low on the daily chart for the TMV at 17.35. I’m anticipating the the right shoulder high on the TLT will be the ultimate high. There will be several more entry points if this trades starts to workout.
Tuesday, January 09, 2018
US Interest Rates Walking on Narrow Ledge / Interest-Rates / US Interest Rates
By: Michael_Pento
There is a huge shock in store for those who have been lulled to sleep by a stock market that has become accustomed to no volatility and only an upward direction. And that alarm bell can be found in the price action of Bitcoin, which recently tumbled over 40% is less than a week. For the implosion within the cryptocurrency world foreshadows what will happen with the major averages as the Federal Reserve futilely attempts to stop monetizing the exploding mountain of U.S. debt.
Monday, January 08, 2018
UK Base Interest Rate Rise Aftermath Sees Mortgage Competition Slow / Interest-Rates / UK Interest Rates
By: MoneyFacts
Moneyfacts UK Mortgage Trends Treasury Report data (not yet published) reveals a sharp slowdown in mortgage competition, just two short months after the Bank of England increased the base rate.
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Friday, January 05, 2018
European Bonds Are 2018’s Number One Risk / Interest-Rates / International Bond Market
By: John_Mauldin
BY JARED DILLIAN : No shortage of stupid things these days:
- Bitcoin
- Litecoin
- Pizzacoin
- Canadian real estate
- Swedish real estate
- Australian real estate
- FANG
- Venture capital
Thursday, December 21, 2017
If You Want To Get Rich, Invest In T-Bills, Not FANGs Or Bitcoin / Interest-Rates / US Bonds
By: John_Mauldin
BY JARED DILLIAN : Demand curves are usually downward-sloping. That’s because people will buy more of a product when it is cheaper and less of it when it is more expensive.
Some things—like stocks and especially bitcoin—have upward-sloping demand curves, which should be theoretically impossible. But they happen in the real world. People really want bitcoin when it is expensive, but nobody was interested when it was cheap.
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Friday, December 15, 2017
Trends in the U.S. Unemployment rate and the U.S. Yield curve / Interest-Rates / US Interest Rates
By: Donald_W_Dony
The trends in both the U.S. Unemployment rate and the U.S. Yield curve are linked to similar economic pressures.
The Unemployment rate rises and falls due to a number of key reasons and reflects the changes in the economy.
The U.S. Yield curve acts as a tool for the Fed to conduct its monetary policy in its goal for the long-term health (ie stable prices and sustainable employment) of the economy.
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Tuesday, December 12, 2017
Which Central Bank Will Go Under First When the Everything Bubble Bursts? / Interest-Rates / Central Banks
By: Graham_Summers
In the aftermath of the Great Financial Crisis, Central Banks began cornering the sovereign bond market via Zero or even Negative interest rates and Quantitative Easing (QE) programs.
The goal here was to reflate the financial system by pushing the “risk free rate” to extraordinary lows. By doing this, Central Bankers were hoping to:
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Tuesday, December 12, 2017
A Former Wall Street Veteran: Good Traders Are Born, Not Trained / Interest-Rates / Learn to Trade
By: John_Mauldin
BY JARED DILLIAN : Some people are better with money than others. Is it nature or nurture?
What I mean is: Can investing be taught, or does it come naturally?
I’m going to make a very controversial statement. Financial acumen is almost entirely nature. You are born with it.
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Monday, December 11, 2017
Soaring Deficits Force US Treasury into Foolish Debt Gamble / Interest-Rates / US Debt
By: Michael_Pento
The Treasury opened the fiscal year 2018 with an October budget deficit of $63.2 billion. That is 37.9% larger than the $45.8 billion deficit in October of last year. The primary reason behind this surge in year-over-year deficits was a 21.6% increase in net interest expenses. The annual red-ink problem looks even greater when recognizing that the national debt is already over 105% of Gross Domestic Product (GDP), at nearly $21 trillion, and with an additional $10 trillion projected to be added in the next ten years.
Saturday, December 09, 2017
Jerome Powell vs. Janet Yellen / Interest-Rates / US Federal Reserve Bank
By: Arkadiusz_Sieron
As expected, Donald Trump nominated Jerome Powell as the next Federal Reserve Chair. He is often perceived as a merely Republican version of Yellen. But is that really the case? Let’s analyze in a more detailed way what impact on gold Powell’s term as the head of the U.S. central bank would mean for the gold market.
Tuesday, December 05, 2017
Central Banks Won’t See Our Sympathy / Interest-Rates / Central Banks
By: Rodney_Johnson
It’s official. Lending institutions are having a tough time making loans.Don’t get me wrong, they still make money the old fashioned way: by borrowing from us through deposits on which they pay almost no interest, and then lending it long term to anyone that qualifies. But they’ve had to jack up their other fees because the traditional business plan just isn’t cutting it.
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Tuesday, November 28, 2017
The $76 Trillion Bond Market Is Forecasting Inflation. Are You Ready? / Interest-Rates / Inflation
By: Graham_Summers
This year, (2017) was the year that the financial system moved from fearing deflation to expecting inflation.
You can see this in the breakout in inflation expectations. From 2013 until mid-2016, the financial system’s expectations of future inflation were in a downtrend. Mid-2016 this changed as expectations began to rise, breaking this downtrend in early 2017.
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Tuesday, November 28, 2017
The Fed Is at the Height of Monetary Policy Lunacy / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
How often do central bankers, regulators, corporate leaders, lawyers, politicians, and ordinary investors make the same mistakes over and over again? All the time.
If we stopped erasing our memories and for once learned from our mistakes, we might make better progress. But no, we must always step on the same rake.
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Wednesday, November 22, 2017
New Fed Chairman, Same Old Story / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
President Trump nominated Jerome H. Powell as the new Chairman of the Federal Reserve Bank. Don’t look for much to change. And Janet Yellen’s announcement that she will resign from the board upon Mr. Powell’s induction as board chair is pretty much a non-event.
Where we are today is the culmination of decades of irresponsible financial/fiscal policies and a complete abdication of fundamental economics. But that should not be a surprise. The self-proclaimed purpose of the Federal Reserve Bank is to manage the economic cycles. This is an impossibly presumptive task and a violation of fundamental economic theory.
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