Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, September 06, 2011
Will Governments and Central Bankers Bail Out Bondholders and Banks Again? / Interest-Rates / Global Debt Crisis
By: Mike_Shedlock
As noted previously, it is crystal clear to everyone but bankers and brain-dead analysts that banks need to be recapitalized, in Europe and the US as well.
The crucial question is "how?".
Tuesday, September 06, 2011
Markets Have Lost Confidence in Italy / Interest-Rates / Global Debt Crisis
By: Mike_Shedlock
The warnings are flying today so let's take a look at a few of them, including a couple of my own.
Trichet Warns Heads of States
Tuesday, September 06, 2011
Many Banks Will Not Survive if Forced to Value Sovereign Debt at Market Prices / Interest-Rates / Credit Crisis 2011
By: Mike_Shedlock
Josef Ackermann, CEO of Deutsche Bank admitted the obvious today with statements recognizing that many organizations will fail at mark-to-market pricing. To show you the Fantasyland world these bankers live in, Ackermann also believes European banks are now much better capitalized and less dependent on short-term financing.
Monday, September 05, 2011
Falling Interest Rates and the Fallacy of Monetary Deflation at the Zero Bound / Interest-Rates / US Interest Rates
By: Jesse
Liquidity Trap, Straight Up, with a Twist
I think we are all familiar with the recently popular viewpoint that as the financial economy crashed, what people called 'money destruction' would follow. Well actually the destruction of credit which some considered the same as money, as money itself. There were many detailed and complex thought experiments to explain why this must happen, involving monetary theories.
Tuesday, August 30, 2011
Central Bankers' Next Panic Move / Interest-Rates / Central Banks
By: Money_Morning
Sean Hyman writes:
It may seem like panic in the stock markets just started this month, but the truth is governments and central bankers have been in "panic mode" since March. We just didn't see it in the markets until a few weeks ago. But if you look back, you can tell central bankers were panicking because they kept intervening to manipulate their stock or currency markets. Here's a quick play-by-play of those panic attacks and the real messages behind them:
Tuesday, August 30, 2011
U.S. Treasury Market Calling Bernanke's Bluff / Interest-Rates / US Bonds
By: Tony_Pallotta
The repurchase agreement or "repo" market is where primary dealers finance their inventory of US Treasuries, where companies find short term financing and where money market funds invest much of their capital. With daily "repo" transactions estimated at $2-4 trillion USD it is truly amazing how few understand the grease that keeps the US economy functioning.
Monday, August 29, 2011
How to Protect and Profit From U.s. Treasury Bond Market Crash / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
By now, you've probably taken note of the growing bubble in Treasury bonds.
The yield on the 10-year Treasury bond fell below 2% for the first time in 50 years in the wake of the U.S. credit rating downgrade.
Read full article... Read full article...
Monday, August 29, 2011
PIMCO Missed the Trade of the Year in the U.S. Treasury Bond Market / Interest-Rates / US Bonds
By: EconMatters
PIMCO who specializes in Bonds, having the largest bond fund in the world could not have been more wrong about an asset class, which is surprising considering their experience in this sector. Bill Gross`s official declaration that his firm was shorting the US Treasury Market on April 11th of this year to the day marked the literal double bottom in price/high in yield for the year, and it has been one heck of a one-way trade in the opposite direction ever since.
Monday, August 29, 2011
What happens when the U.S. Bond Market Loses its Patience? / Interest-Rates / US Bonds
By: Aftab_Singh
The concomitant surges in the dollar prices of gold and the US treasury note seem to have got many market participants scratching their heads. For isn’t gold an ‘inflation asset’ and the treasury note a ‘deflation asset’? Aren’t they supposed to be antagonistic to one another? We square this price action by noting that the means of the currency skeptic are distinctly peculiar in this post-Bretton Woods experiment — it matters that the Federal Reserve note is by and large ‘backed’ by US government securities and gold. That being said, our hunch is that this price action is a relatively temporary phenomenon; for whereas gold remains intact regardless of an increasingly precarious stock of irredeemable claims upon it, US government securities do not. We believe that the current tolerance of the US bond market should be regarded as the last gift from above. Here I outline why a world with an intolerant bond market might not be that pleasant.
Sunday, August 28, 2011
China's Debt Problems Rival the West / Interest-Rates / China Economy
By: Justice_Litle
Though the focus has been on the U.S. and Europe, China too has debt problems to contend with.
"If you look at the accounting, I don't see how anyone could put a penny there."
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Friday, August 26, 2011
Has the Fed Already Started QE3? / Interest-Rates / Quantitative Easing
By: Casey_Research
Bud Conrad, Casey Research Writes: The Fed surprised the market by extending its policy of 0 to 0.25% Fed funds rate to mid-2013. The way the Fed manages to drive rates lower is to buy Treasuries with newly created money – driving the price up and the rates down. The big question is whether the policy will have a sizeable effect on markets. The chart below shows the historical jump in the Fed’s combined policy tools that were used to lower rates and bail out financial institutions through a variety of programs. These include the big purchase of mortgage-backed securities (MBS) called QE1 and the large purchase of Treasuries called QE2.
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Friday, August 26, 2011
Bernanke's Invisible Bazooka Ploy / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Bernanke is out of tools that make any sense even to him.
Seriously, what can he do he has not already done? Given that $1.6 trillion in excess reserves did not do a damn thing to spur lending or job creation, what possible good can another $1 trillion do?
Friday, August 19, 2011
U.S. Treasury 10 Year Bonds Bubble At 2% Yield, US Nominal GDP Growth Heading Down Towards 0% / Interest-Rates / US Bonds
By: Andrew_Butter
I’m a little slow, but perhaps someone can tell me what happened to the crowd who were jumping up and down screaming that US Treasuries were a bubble when the yield was 3.7%? If that was a bubble in 2009 and 2010 then 2.0% has to be an UBER-BUBBLE so you would think those guys would be having foaming-at-the mouth fits by now, I don’t know what happened to them, perhaps they all got sore throats?
Friday, August 19, 2011
U.S. Treasury Hidden Trickery in Mortgage Backed Security Recoveries / Interest-Rates / Credit Crisis Bailouts
By: Aftab_Singh
Right on schedule, the US Treasury received around $11 billion from the proceeds of Mortgage-backed Securities sales last Thursday. Moreover, the US Treasury released an update on the MBS portfolio wind down titled; ‘Taxpayers Recoveries Reach 70 Percent Milestone‘. The title left us thinking; hmmm… sort of… Here, I highlight the hidden confiscation involved with this particular piece of trickery and present the usual daily treasury statement charts.
Tuesday, August 16, 2011
Smallest Yield Curve Gap Between US and Japan in 19 Years Confirming Deflation / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Curve Watchers Anonymous notes amazingly low yields across the entire yield curve for the US, Japan, Germany, and the UK. Here is a chart I put together this evening.
Sunday, August 14, 2011
Central Banks Monetary Policy Rocked by Global Financial Markets Turmoil / Interest-Rates / Credit Crisis 2011
By: CentralBankNews
The past week in monetary policy was rocked by the turmoil in global sentiment in the wake of the US sovereign credit rating downgrade, and heightened concerns about contagion in the European sovereign debt crisis. In all, 11 central banks reviewed monetary policy rates, with the following banks adjusting rates: Qatar -50bps to 4.50%, Mozambique -50bps to 16.00%, and Belarus +200bps to 22.00%. Meanwhile the following central banks held interest rates unchanged: Rwanda 6.00%, Indonesia 6.75%, US 0.25%, Hong Kong 0.50%, Norway 2.25%, Serbia 11.75%, South Korea 3.25%, and Peru 4.25%.
Saturday, August 13, 2011
Wall Street Bailout: Too Big To Collect? / Interest-Rates / US Debt
By: EconMatters
In light of the recent S&P downgrade of the U.S. sovereign credit rating, the nation suddenly looks more dire financially than before the downgrade ( (at least psychologically, as the country still has the ability to borrow at its pre-downgrade low interest rates.) So it would make tracking down Wall Street bailout money still outstanding a good start to reclaim some of the lost treasure.
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Saturday, August 13, 2011
The Zero Interest Rate Market Fix is In / Interest-Rates / US Interest Rates
By: Peter_Schiff
This week's wild actions on Wall Street should serve as a stark reminder that few investors have any clue as to what is really going on beneath the surface of America's troubled economy. But this week did bring startling clarity on at least one front. In its August policy statement the Federal Reserve took the highly unusual step of putting a specific time frame for the continuation of its near zero interest rate policy.
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Friday, August 12, 2011
Opportunities in UK Gilts and US Bonds / Interest-Rates / International Bond Market
By: Seven_Days_Ahead
The market has overcome the important Pivot at 124.95 from 2002 - and where it has failed twice before in 2009 and 2010.
Thursday, August 11, 2011
Fed's Extension of Low Interest Rates For Another Two Years Will Deliver Damaging Inflation / Interest-Rates / US Interest Rates
By: Money_Morning
David Zeiler writes:
With little ammo left in its arsenal, the Federal Open Market Committee (FOMC) yesterday (Tuesday) was unable to offer jittery markets anything more than a two-year extension of the Fed's low interest rates.
Instead of promising to keep rates at their low 0% to 0.25% level for an "extended period" as it has in its past several meetings, the FOMC said it would maintain those rates "at least through mid-2013."
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