Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, October 26, 2011
Foreigners Losing Confidence in Holding U.S. Treasury and Agency Debt / Interest-Rates / US Bonds
By: Casey_Research
Bud Conrad, Casey Research writes: Foreign central banks buy US Treasury and Agency debt through accounts at the Federal Reserve, where it is held in custody. Without these central banks buying our debt, the US federal government would have to find a new source of funds or the result could be higher interest rates. Looking at the data on a monthly basis (and then multiplied by 12 to give the annual rate), here is the dramatic picture of how foreign central-bank purchases of our debt have shifted, from buying $500 billion to selling off $1 trillion.
Wednesday, October 26, 2011
Beware of Floating Interest Rates / Interest-Rates / US Interest Rates
By: Neeraj_Chaudhary
According to US government figures, the yield on the 10-Year US Treasury note reached a record low of 1.72% last month. Thus, despite the fact that government debt has exploded at a rate of more than $1 trillion per year, and the fact that S&P recently downgraded US debt, it appears that market demand for long-term US debt is nearly insatiable.
Wednesday, October 26, 2011
The Treasury Investment That's WAY Better Than Treasury Inflation Protected Securities (TIPS) / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
I've made no secret of my aversion to Treasury bonds. Yields right now are irrationally low, and thus do not accurately reflect U.S. credit risk.
And since inflation is already running higher than bond yields - and is likely to rise even further - Treasuries offer an inadequate return at best, and at worst, a capital loss if sold before maturity.
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Monday, October 24, 2011
Another U.S. Sovereign Downgrade Likely By 2011 Year End, Says Merrill / Interest-Rates / Global Debt Crisis
By: EconMatters
While some of us are still recovering from the first ever U.S. sovereign credit downgrade from S&P in August, BofA Merrill dropped another bomb. From Reuters,
Read full article... Read full article..."The United States will likely suffer the loss of its triple-A credit rating from another major rating agency by the end of this year due to concerns over the deficit, Bank of America Merrill Lynch forecasts.
Monday, October 24, 2011
Assessing the Damage of the European Banking Crisis / Interest-Rates / Credit Crisis 2011
By: STRATFOR
Europe faces a banking crisis it has not wanted to admit even exists.
The formal authority on financial stability, International Monetary Fund (IMF) chief Christine Lagarde, made her institution’s opinion on European banking known back in August when she prompted the European Union to engage in an immediate 200 billion-euro bank recapitalization effort. The response was broad-based derision from Europeans at the local, national and EU bureaucratic levels. The vehemence directed at Lagarde was particularly notable as Lagarde is certainly in a position to know what she was talking about: Until July 5, her title was not IMF chief, but French finance minister. She has seen the books, and the books are bad. Due to European inaction, the IMF on Oct. 18 raised its estimate for recapitalization needs from 200 billion euros to 300 billion euros ($274 billion to $410 billion).
Sunday, October 23, 2011
What Quantitative Easing Really Means / Interest-Rates / Quantitative Easing
By: Global_Research
Prof. Ismael Hossein-zadeh writes: Stripped from the fancy (and mystifying) jargon, quantitative easing (QE) simply means increasing the quantity of money supply, or easing credit conditions—in the hope of stimulating thestagnant economy. This is usually done byhaving central banks inject a pre-determined quantity of money into the coffers of commercial banksin return for the purchase of their financial assets, which consist largely of government bonds. Although it is typically done electronically, or on paper, its practical effect is the same as printing money.
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Sunday, October 23, 2011
Fed Officials Offer Broad Hints That QE3 is Likely if Soft Patch Persists / Interest-Rates / US Interest Rates
By: Asha_Bangalore
Vice-Chair Janet Yellen, Fed Governor Tarullo and Boston Fed President Rosengren have in the past two days voiced their support for more Fed action to support economic activity. Governor Tarullo indicated that there is “ample room” for the Fed to consider buying mortgage back securities. Two rounds of quantitative easing have helped to bring down mortgage rates, with QE1 (quantitative easing) appearing to have been the more successful (see Chart 1) program of the two programs.
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Friday, October 21, 2011
QE4, Wall Street and Student Debt Foregiveness / Interest-Rates / Global Debt Crisis
By: Ellen_Brown
Among the demands of the Wall Street protesters is student debt forgiveness—a debt “jubilee.” Occupy Philly has a “Student Loan Jubilee Working Group,” and other groups are studying the issue. Commentators say debt forgiveness is impossible. Who would foot the bill? But there is one deep pocket that could pull it off—the Federal Reserve. In its first quantitative easing program (QE1), the Fed removed $1.3 trillion in toxic assets from the books of Wall Street banks. For QE4, it could remove $1 trillion in toxic debt from the backs of millions of students.
Friday, October 21, 2011
Six Layers Of Deficits Mean Debt Retirement Disaster / Interest-Rates / US Debt
By: Dan_Amerman
There is a common but mistaken belief that the children and grandchildren of older Americans will be the ones who will be paying for today's massive government deficits. In this article we will look at six different layers of the deficit and unfunded government promises and put them into personal, per household terms in order to get to the truth of the matter. This truth is that the deficits are far too large to be repaid by taxpayers decades from now, but will be instead effectively repaid through the destruction of retiree savings and retirement investment portfolios in the coming years.
Wednesday, October 19, 2011
Robert Prechter Goes "behind the scenes" on the Federal Reserve / Interest-Rates / Central Banks
By: EWI
This is Part II of our three-part series, "Robert Prechter Explains The Fed." You can read Part I here.
Money, Credit and the Federal Reserve Banking System
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Wednesday, October 19, 2011
The Day the U.S. Treasury Doomed America / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
In the mid 1990s, when I was working as a U.S. Treasury advisor to Croatia, I met with the managers of the U.S. Treasury's debt.
In what would turn out to be terrific advice, the Treasury officials suggested that we extend Croatia's debt maturities so the Central European country wouldn't have to refinance too often.
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Saturday, October 15, 2011
ECB Rate Cut: Eyes on Aussies / Interest-Rates / Global Debt Crisis
By: Dr_Jeff_Lewis
Investors sent German government bonds higher, banking on a rate cut from the European Central Bank. Now just days after bullish bond sentiment reached its peak, investors have backed off, realizing that a rate cut might be less likely than once thought.
Rates are already held low by the European Central Bank, which stopped short of actions on a magnitude to mirror the United States. The ECB currently offers a 1.5% rate on its main financing operations, known as fixed-rate tenders.
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Saturday, October 15, 2011
Investors Lose Confidence in the US Government / Interest-Rates / US Debt
By: Dr_Jeff_Lewis
The equity markets staged a rally on Monday, with a buying spree that was largely seen as a response to European fears. Quietly, the same investors who purchased corporate stock on the open markets moved out of other investments, primarily Fannie Mae and Freddie Mac securities.
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Friday, October 14, 2011
The Fed 8% Inflation Solution / Interest-Rates / Inflation
By: Fred_Sheehan
The terminal stage of Dr. Frankenstein-style central banking is disgorging ridiculous claims of authority motivated by reckless efforts to retain control. One such pincer attack is the Federal Reserve's purported 2% inflation target. Behind our very eyes, this fictional mandate is being raised, all the more reason that savers need to speculate, not a welcome prospect with both inflationary and deflationary influences expanding and bound to burst.
Friday, October 14, 2011
Italian Bond Yield Surges to 5.82%, Government Loses Routine Budget Vote / Interest-Rates / Credit Crisis 2011
By: Mike_Shedlock
After losing a routine parliamentary vote on the budget, Silvio Berlusconi, the very annoyed prime minister of Italy called for a vote of confidence. The vote is expected on Friday.
I believe Berlusconi may lose a close vote. If not, he will be discarded by March.
Thursday, October 13, 2011
Robert Prechter Explains The Fed, Part I / Interest-Rates / Central Banks
By: EWI
The ongoing economic problems have made the central bank's decisions -- interest rates, quantitative easing, monetary stimulus, etc. -- a permanent fixture on six-o'clock news.
Yet many of us don't truly understand the role of the Federal Reserve.
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Thursday, October 13, 2011
FOMC Meeting: QE3 is Likely, if Economy Slips / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
The minutes of the September 20-21 FOMC meeting indicate that several members see significant downside risks to economic growth. They do not project a decline in GDP, but noted that the economy was “vulnerable to adverse shocks.” In this context, the sources of adverse shocks included “pronounced or more protracted deleveraging by households, the chance of a large-than-expected near-term fiscal tightening, and potential spillovers to the United States if the financial situation in Europe were to worsen appreciably.”
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Tuesday, October 11, 2011
Adjusted U.S. Monetary Base Less Excess Bank Reserves / Interest-Rates / US Debt
By: Jesse
Thanks to my friend Gary at NowandFutures.com for this chart.
I like to think of the expansion of the monetary base as it has been implemented this time, versus 1933 , as a large animal passing through the body of a python.
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Sunday, October 09, 2011
An Irish Debt Haircut / Interest-Rates / Global Debt Crisis
By: John_Mauldin
Just as only four short years ago it was All Subprime, All the Time, and then it was the Credit Crisis, now it is Europe. (When) will Greece default and which banks will implode as a result? Is there another banking crisis in our future? I just came back from a whirlwind four-country visit to Europe, and I will try to offer a few insights. This week we start with Ireland, move to the problem of Europe at large and, if we're not out of space (and your patience!), we'll visit some last-minute data points. There is a lot to cover, so let's jump right in.
Friday, October 07, 2011
Mervyn's Pringle Problem / Interest-Rates / UK Debt
By: Adrian_Ash
Bank to Treasury: Forget credit easing. It's your debt that needs queasing...
UNLIKE PRINGLES tasty potato snacks, quantitative easing doesn't come with a resealable lid. So the famous sales line is only more true for central bankers:
"Once you pop, you can't stop!"
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