Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, October 21, 2012
Spain’s Back In Debt Crisis Mode… And Will Take The EU Down With It / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
Spain’s Back In Debt Crisis Mode… And Will Take The EU Down With It
As I noted previous articles, Spain has essentially three options:
1) Spain goes the “Greek route” of agreeing to austerity measures in exchange for bailouts (which will implode the economy).
2) Prime Minister Rajoy refuses to impose austerity measures and is removed/ replaced by an EU technocrat who is pro-austerity measures (like Italy experienced last year)
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Friday, October 19, 2012
Is Bernanke Losing Control? / Interest-Rates / US Bonds
By: Marty_Chenard
We all know the talk ... Bernanke has a mission to keep long term interest and mortgage rates low. And, low mortgage rates will be good for housing and the economy.
But ... is Bernanke getting into trouble relative to his ability to keep rates low?
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Friday, October 12, 2012
Age of Debt Deleveraging / Interest-Rates / Global Debt Crisis 2012
By: Puru_Saxena
The world’s major economies are struggling and their private-sector is deleveraging (paying off debt). If history is any guide, this deflationary process is likely to continue for several years.
You will recall that heading into the global financial crisis, corporations and households in the developed world were leveraged to the hilt. During the pre-crisis era, debt was considered a birth right and for decades, the private-sector leveraged its balance-sheet. Unfortunately, when the US housing market peaked and Lehman went bust, asset values plummeted but the liabilities remain unchanged. Thus, for the first time in their lives, people in the developed world experienced the wrath of excessive leverage.
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Friday, October 12, 2012
Negative Real Yields on U.S. Treasury Debt Highly Bullish for Gold / Interest-Rates / US Debt
By: Jesse
Today's 30 year Treasury auction was described as 'soft' as the cover rates were not as robust as yesterday's ten year. Ten-year notes started the day yielding 1.679% and were recently yielding 1.684%, while 30-year bonds were up 12/32 in price to yield 2.875%.
Personally I think that buying a 30 year bond yielding under 3 percent is insanity.
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Wednesday, October 10, 2012
The Muni Bond Market Minefield / Interest-Rates / US Bonds
By: Neeraj_Chaudhary
Municipal bonds have long been viewed as a staple asset class for conservative, income-seeking investors. "Munis," as they are known, are a large, liquid market of credit-rated securities that provide tax-exempt (from Federal taxes) income to millions of American investors. Towns, school districts, and other public sector authorities across the country have issued an estimated $3.7 trillion dollars worth of these bonds.
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Monday, October 08, 2012
How Spain Could Take Down the Entire EU Banking System / Interest-Rates / Credit Crisis 2012
By: Graham_Summers
Spain was already experiencing a banking crisis as well as a sovereign crisis. It’s now on the verge of a constitutional crisis (as well as its ongoing sovereign and banking crises).
Saturday, October 06, 2012
Spain is Beyond Repair, So is the United States / Interest-Rates / Global Debt Crisis 2012
By: Fred_Sheehan
Spain is beyond repair. This is also true of the United States. Following is a bottom-up view of the insatiable parasites clinging to the rump of the Spanish economy and how such gruesome imagery applies elsewhere.
A Bloomberg story on September 27, 2012, resembled many others since the mid-'oughts: "Spain's Boom-Era Building Gear Sold as Developers Cut Off." This does not need much explanation but a connection is offered: though QE3 is designed, and will (in cases) lift asset prices, gravity rather than levitation is the natural direction of assets.
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Thursday, October 04, 2012
U.S. Fed QE Infinity, What is it All about? / Interest-Rates / Quantitative Easing
By: Ellen_Brown
QE3, the Federal Reserve’s third round of quantitative easing, is so open-ended that it is being called QE Infinity.
Doubts about its effectiveness are surfacing even on Wall Street. The Financial Times reports:
Among the trading rooms and floors of Connecticut and Mayfair [in London], supposedly sophisticated money managers are raising big questions about QE3 — and whether, this time around, the Fed is not risking more than it can deliver.
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Wednesday, October 03, 2012
The Genesis of the LIBOR Crisis / Interest-Rates / Banksters
By: Rob_Kirby
The roots of the LIBOR crisis can be found in the broad based sub-prime FRAUD in America circa 2000 - 2007. The sub-prime fraud involved American investment banks securitizing [bundling] poor mortgage credits into “pools” – then working hand-in-hand with credit rating agencies like S & P and Moodys – having these pooled securities rated AAA.
In Q1/2007 American investment bank - Bear Stearns, a major player in this sub-prime securitization – had a number of these sub-prime pools FAIL to perform.
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Wednesday, October 03, 2012
Why A Fed President Just Suggested Doubling QE3 / Interest-Rates / Quantitative Easing
By: Dan_Amerman
Chicago Federal Reserve Bank President Charles Evans was interviewed on CNBC on Monday, and he indicated that he was in favor of continuing asset purchases at a rate of $85 billion per month all the way through 2013. If approved by the rest of the Fed, this would have the effect of about doubling the size of "QE3", or Quantitative Easing Three, the massive Federal Reserve monetary creation and market intervention program announced only three weeks ago.
Monday, October 01, 2012
Spain's Banks Need Another 60 Billion Euro Bailout / Interest-Rates / Eurozone Debt Crisis
By: Ian_R_Campbell
Why read: Because late Friday afternoon after the European markets closed the results of Spain's bank audit was publicly released. It is reminiscent in some respects of the U.S. Bank Stress Test report issued earlier this year by the Federal Reserve, and you should know something about the assumptions upon which the report is based.
Monday, October 01, 2012
Euro-zone Breakup, What if I am Wrong? / Interest-Rates / Eurozone Debt Crisis
By: Mike_Shedlock
I have long stated the eurozone will breakup. Historically speaking, no currency union has ever survived in the absence of a political union.
Moreover, in It's Just Impossible I noted
- The Bundesbank said there should be no banking union until there is a fiscal union.
- Angela Merkel said that there should be no fiscal union until there is political union.
- François Hollande said that there should be no political union until there is a banking union.
- The German supreme court will not allow a political union nor a fiscal union, nor a banking union without a German referendum.
Wednesday, September 26, 2012
Nothing Will Change Until the Great Debt Default, Will you be Prepared? / Interest-Rates / US Debt
By: Gary_North
The Wall Street Journal ran an article the likes of which I have never seen. "The Magnitude of the Mess We're In." It was written by five well-known economists. It warns readers about a series of highly destructive outcomes of the federal government's present fiscal policies. The article says that these problems are close to being unmanageable.
Sunday, September 23, 2012
Q.E. to Infinity Unintended Consequences / Interest-Rates / Quantitative Easing
By: John_Mauldin
There is an intense debate going on in the first-class cabin of Economics Airlines about the direction in which our plane should be pointed. And while those of us back in the cheap seats don't get to help decide, knowing where we will land is of intense interest to all of us. This week we listen in on the debate, in the form of speeches and academic postings passed back from first class for the rest of us to read. This type of debate also occurred when Greenspan held rates down at an abnormally low level for a very long time. The unintended consequence of that move was a housing and debt/leverage bubble. Are there potential unintended consequences to Bernanke's current monetary policy, which some are calling Quantitative Easing Infinity? I suggest you put up your tray tables and fasten your seatbelts – the ride could get bumpy as we explore QE Infinity: Unintended Consequences.
Thursday, September 20, 2012
Bond Market Investors Set up for a Shock, Major Top in Bond Markets / Interest-Rates / US Bonds
By: EWI
During market pullbacks, financial advisors use a boilerplate response: "Let's rebalance the portfolio." Investors have heard that one for years.
The recommended allocation varies depending on a client's age and risk tolerance, but it typically involves shifting funds from stocks to bond holdings.
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Wednesday, September 19, 2012
The Trouble with Printing Money, QE3 Reflects Colossal Failure to Address Our Predicament / Interest-Rates / Quantitative Easing
By: Dr_Martenson
For a while now, I have been expecting a coordinated, global central bank action that would seek to print more money out of thin air, or "QE" (quantitative easing), as it is now called. Now we have two of the most important central banks, that of the U.S. (the Federal Reserve) and in Europe (the ECB) having committed to open-ended, limitless QE.
Wednesday, September 19, 2012
ECB Game Over, Draghi and Bernanke’s Worst Nightmares Are About to Unfold / Interest-Rates / Global Debt Crisis 2012
By: Graham_Summers
Ben Bernanke and Mario Draghi must be absolutely terrified.
These two men, in the last two weeks, have both initiated open-ended bond buying programs. The purpose of these programs, aside from keeping insolvent banks in business, was to scare the markets into believing that no matter what happens, the Central Banks will be able to step in and support the financial system.
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Wednesday, September 19, 2012
QE3 Blowing Up the Debt Bubble / Interest-Rates / Quantitative Easing
By: BATR
It begins . . . the latest downgrade of credit worthiness for the former titan reserve currency. As reality strikes, financial confidence goes negative. Forget the pump and dump equity markets, just how long will it be before the bondholders demand higher interest rates to cover their risk? Ben Shalom Bernanke answers this concern with intentions to keep rates near zero. Pure escapism out of the strange world of banksters’ hubris - faces the rating agencies. US Credit Rating Cut by Egan-Jones ... Again
Tuesday, September 18, 2012
U.S. Treasury Bond Market Major Top Report / Interest-Rates / US Bonds
By: EWI
BOND YIELDS ARE POISED TO BEGIN RISING ON THE WAY TO DEFLATIONARY CREDIT CRISIS
U.S Treasury Bonds Our long term outlook for interest rates on U.S. Treasury securities has been a contrary opinion for many years. Most commentators have been expecting either economic expansion or Fed-induced inflation to push bond yields higher. Conquer the Crash predicted that long term rates on AAA-rated bonds would fall much further as the monetary environment shifted from lessening inflation to outright deflation. Figure 1 shows the forecast from 2002, and Figure 2 updates the graph to the present.
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Tuesday, September 18, 2012
Quantitative Counterfeiting Forever / Interest-Rates / Quantitative Easing
By: Michael_Pento
Last week, Fed Chairman Ben Bernanke announced that the central bank would launch an unprecedented form of quantitative easing. This “new and improved” iteration of money printing will be without limit and duration. The Fed Head launched QE III ($40 billion of MBS purchases every month) on September 13th and stated that it will remain in effect until the labor market “improves substantially.” He also promised that, “The Committee will continue its purchases of agency mortgage backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved…” In other words the Fed will continue to counterfeit money until there is a substantial decline in the unemployment rate. Read full article... Read full article...