Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, January 14, 2012
The U.S. Government Is Bankrupt / Interest-Rates / US Debt
By: Casey_Research
Doug Casey, Casey Research writes: Everyone knows that the US government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. At least insofar as it's possible to get a clear picture.
As you know, the so-called Super Committee recently tried to come up with a plan to cut the deficit by $1.5 trillion and failed completely. To anyone who understands the nature of the political process, the failure was, of course, as predictable as it was shameful. What's even more shameful, though, is that the sought-after $1.5 trillion cut wasn't meant to apply to the annual budget but to the total budget of the next 10 years – a fact that is rarely mentioned.
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Friday, January 13, 2012
ECB's Draghi Frames Debt Crisis Issues / Interest-Rates / Eurozone Debt Crisis
By: Axel_Merk
ECB President Mario Draghi continued to impress with his very direct style during the European Central Bank's (ECB) first press conference of the year. While not lowering interest rates or announcing further easing measures, he made it clear that the ECB is "ready to act" should the environment deteriorate. Our takeaways:
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Friday, January 13, 2012
2012 Markets Will be a Repeat of 2011, Favor Italian Government Bonds Over Nation's Bank Debt / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
Boaz Weinstein, founder of Saba Capital and former co-head of credit trading at Deutsche Bank, spoke exclusively to Bloomberg TV's Stephanie Ruhle about the CDS market and outlook for 2012.
Weinstein said that "we do have a long position in Italy" and the markets this year will "be a repeat of 2011."
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Wednesday, January 11, 2012
End of the Debt Super Cycle, 2012 Market Forecasts / Interest-Rates / Global Debt Crisis 2012
By: The_Gold_Report
What do investors need to be watching out for in 2012? More Eurozone drama? Record gold highs? A hard landing in China? The U.S. Global Investors team addressed these questions with Endgame: The End of the Debt Supercycle author John Mauldin in a Jan. 5 Outlook 2012 webinar. The Streetwise Reports editors highlight some of the expert insights.
Monday, January 09, 2012
Unpredictability Impact on Global Economy, Fed QE3 Won't Produce the Outcomes We Want / Interest-Rates / Quantitative Easing
By: Bloomberg
PIMCO CEO and co-CIO Mohamed El-Erian spoke with Bloomberg Television's Betty Liu, Dominic Chu and Michael McKee about Europe's crisis, the U.S. economy and where to invest safely in this environment.
El-Erian said that the Fed "doesn't have enough policy instruments to deal with the challenges facing the economy" and that QE3 will not work. On investing opportunities, he said that "In the short term, the U.S. dollar is the best place."
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Monday, January 09, 2012
Paul Krugman is Dead Wrong: Debt Matters / Interest-Rates / US Debt
By: Money_Morning
Shah Gilani writes:
Paul Krugman, the Princeton University economics professor, Nobel Prize winner, and regular New York Times op-ed contributor says, "Debt matters, but not that much."
Not only is he off the reservation on this one, but he's completely fallen off his high horse.
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Sunday, January 08, 2012
Global Interest Rate Movements in 2011 / Interest-Rates / Central Banks
By: CentralBankNews
Of the central banks that net increased their interest rates, the average increase was 281 basis points (skewed up by Belarus; the average would be 185 excluding Belarus). There were 18 central banks tightening by 100 or more basis points. The outliers were Belarus 3450bps, Kenya 1200bps, and Uganda 1000bps. Of those tightening rates, it was largely emerging and frontier markets, with inflation pressures running high on the back of rising food commodity prices and relatively buoyant economic conditions, particularly in the early part of the year.
Saturday, January 07, 2012
Foreign Central Banks Dumping U.S. Treasury Bonds, Treasure From Treasuries / Interest-Rates / US Bonds
By: DeepCaster_LLC
“Holdings of U.S. Treasurys (sic) by foreign central banks has fallen by a record amount over the past four weeks according to the latest Federal Reserve data.
“The net $69 billion drop in Treasury holdings registered at the Fed by foreign official institutions comes as benchmark yields ended 2011 near record low levels…
“The decline in foreign holdings of Treasurys (sic) in recent weeks has not resulted in higher yields and lower prices because other investors have sought the safety of US debt.”
“Foreign Central Banks Cut Treasury Holdings by Record”
The Financial Times, www.cnbc.com, 12/30/11
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Friday, January 06, 2012
Debt, It's a Rollover... or is it? / Interest-Rates / US Debt
By: William_Bancroft
Will Bancroft looks at the debt loads weighing down economies and sees a year of tightrope walking for the authorities and the banking system. The financial markets wait with baited breathe for a resolution to the debt problems, but are there any fixes available?
As we enter 2012 there is one issue that probably sits at the forefront of our minds: can the overly indebted parts of the financial system keep financing themselves?
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Tuesday, January 03, 2012
Math Vindicates S&P U.S. Debt Downgrade / Interest-Rates / US Debt
By: Michael_Pento
Standard and Poor’s has been greatly vilified for their call to lower the U.S. credit rating to AA+ from AAA. The evidence, naysayers point to, for their justification of excoriating S&P is the performance of Treasuries since the downgrade occurred. Indeed, U.S. debt yields have fallen and the dollar has increased in the five months after being stripped of AAA.Read full article... Read full article...
Tuesday, January 03, 2012
Global Government Bond Market Ponzi Scheme / Interest-Rates / Global Debt Crisis 2012
By: John_Mauldin
For whatever deeply embedded psychological reason – and your humble analyst is profoundly guilty – we humans seem prone to picking out a particular point in our space-time continuum (read: the New Year) to think about the future and new beginnings, rather than running the exercise every week or month. Maybe so much introspection and thinking is just too exhausting, so we only do it on an annual basis. I am deep in my reading as I research my annual forecast issue, which I will write Friday. I am thinking of being especially foolish (and anyone who makes predictions is foolish) and going out to a five-year time frame. It should be challenging.
Saturday, December 31, 2011
2011: The Year 60 Minutes Misled Americans About Municipal Bonds / Interest-Rates / US Bonds
By: Janet_Tavakoli
In previous posts, I've mentioned serious fiscal problems that need to be addressed at state and local levels. This varies by region and some issues are potentially solvable.
I live in Illinois, which is ground zero for fraud, corruption, underfunded pension funds and general fiscal mismanagement. It's an example of one of the worst fiscal messes in the United States. This year Illinois hiked personal income taxes from 3% to 5%, and increased corporate taxes. We'll be slammed with hidden tax increases in utilities, purchases, and more. When now Mayor Rahm Emanuel left his post as White House Chief of Staff to run his election, the Chicago mayoral race centered partly around steps, including budget cuts, needed to solve Chicago's serious fiscal issues: See "Third Word America: Drowning in Debt and Chocking on Lies," Huffington Post, June 24, 2011, and 'Fast-Tracking to Anarchy;" August 25, 2010.
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Friday, December 30, 2011
ECB Thinly Veiled Bailout / Interest-Rates / Eurozone Debt Crisis
By: PhilStockWorld
The ECB is borrowing U.S. Dollars from the Fed to bailout European banks. And that is in addition to the Long Term Refinancing Operation (LTRO).
However, the "borrowing" is not called "borrowing." It's called a "temporary U.S. dollar liquidity swap arrangement." Yet it is really borrowing because it's going massively in one direction for the purpose of giving the ECB Dollars to lend to European banks, so the ECB can avoid lending more Euros. The ECB doesn't want to tarnish its "inflation fighting" reputation and further devalue the Euro. Instead, the Fed is taking billions of Euros as collateral for the Dollar swap.
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Wednesday, December 28, 2011
What Will 2012 Bring for Global Central Banks Monetary Policy? / Interest-Rates / Central Banks
By: CentralBankNews
he year of 2011 was an interesting and eventful year in monetary policy. As the chart below shows, the GDP weighted average interest rate of central banks crept up in the first half of the year as commodity prices remained buoyant, economic recoveries showed signs of gaining momentum, and inflation was the key concern in emerging markets. But this was then followed by a reversal in course in the later part of the year as the specter of the European debt crisis and slowing global growth raised downside risks for growth and price stability, spurring central bankers to cut rates and otherwise ease policy settings.
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Tuesday, December 27, 2011
Euro-zone Credit Implosion Secret, ECB Cannot Stop Collateral Contagion Collapse! / Interest-Rates / Eurozone Debt Crisis
By: Gordon_T_Long
How long can the European media keep the EU credit implosion a secret? The disgraced former IMF Director, Demonic Strauss Kahn said on Tuesday December 12th, 2011 that No 'Firewall' Exists and Europe Has 'Only Weeks'. Of course within minutes of this Financial Times news release which detailed his vent on EU leadership and the perilous situation in Europe, the article disappeared.
Tuesday, December 27, 2011
US Public Debt Grows to World War II Level / Interest-Rates / US Debt
By: Pravda
In early December the ratio of public debt of the United States to GDP has reached 99.5%, which is the highest number since World War II. After placing another portion of the bonds at $160 billion, the U.S. will exceed this significant number. Rating agencies are willing to revise the U.S. credit scores.
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Friday, December 23, 2011
Should Definition of Central Bank Lender of Last Resort Function Be Expanded? / Interest-Rates / Central Banks
By: Paul_L_Kasriel
A fractional-reserve banking system is susceptible to bouts of liquidity stringencies that, if left unchecked, can result in serial bank failures and an abrupt contraction in bank credit. The sine qua non of central banking is to act as a lender of last resort to otherwise solvent but temporarily illiquid banks so as to prevent their temporary illiquidity from deteriorating into insolvency, which would result in the aforementioned contraction in bank credit. This "narrow" interpretation of the lender-of-last resort function was the catalyst for the Federal Reserve Act of 1913. After the Banking Crisis of 1907, Congress believed that it was necessary to re-establish a central bank lender of last resort so as to prevent temporary financial market liquidity stringencies from deteriorating into severe economy-wide recessions.
Friday, December 23, 2011
Robert Prechter Explains The Fed, Money, Credit and the Federal Reserve Banking System / Interest-Rates / Central Banks
By: EWI
This is Part III, the final part of our series "Robert Prechter Explains The Fed." (Here are Part I and Part II.)
Money, Credit and the Federal Reserve Banking System
Conquer the Crash, Chapter 10 By Robert Prechter
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Thursday, December 22, 2011
Market Manipulation Is Not Why Most Traders Lose / Interest-Rates / Learn to Trade
By: EWI
How often have you heard analysts refer to a down day on Wall Street as "traders taking profits"? Sounds great, but the sobering fact is that most traders -- in futures, commodities, or forex -- lose money.
Any book on trading will list for you the many reasons why most traders lose. Yet some traders do win; some even set records. In 1984, Elliott Wave International's founder and president Robert Prechter won the U.S. Trading Championship, setting a new all-time profit record of 444.4% in a monitored real-money options account. Later in his monthly Elliott Wave Theorist, Prechter published a Special Report "What A Trader Really Needs To Be Successful" with 5 important insights for would-be market speculators (including the explanation of why "market manipulation" is not why most traders lose.)
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Thursday, December 22, 2011
ECB Rhetoric versus Reality on Money Printing / Interest-Rates / Quantitative Easing
By: Ben_Traynor
This week, the gap between what the European Central Bank says and what it does became very noticeable indeed...
I know they're stolen, but I don't feel bad.
I take that money, buy you things you never had.
'Free Money', from the album 'Horses' by Patti Smith