Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, December 20, 2010
US Treasury Bonds BubbleOmics: Next Stop 2.890% for the 10-Year / Interest-Rates / US Bonds
By: Andrew_Butter
A bubble is when for some reason, be it because of manipulation of markets for one person’s gain and another’s pain, the insanity of crowds, or addiction to debt; prices of some “thing” gets wildly out of synch with the fundamental utility value of the thing.
Then there is a marked difference between what, in Wall Street slang, you can sell something for to someone dumber than you, today (Market Value); and what can reasonably expect to be able to sell same the thing for to someone smarter than you, tomorrow (Other than Market Value).
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Sunday, December 19, 2010
How to Protect Your Family and Wealth from the End of America / Interest-Rates / US Bonds
By: DailyWealth
Porter Stansberry with Braden Copeland write: The International Monetary Fund estimates the 20 largest industrial nations (known as the G20) are on course to see their combined government debt exceed 100% of their combined GDP within three years.
Debts of this size simply cannot be financed, let alone repaid. The first step in this great unraveling is underway – the collapse of the euro.
Sunday, December 19, 2010
Insanity on the Potomac, U.S. Treasury Bond Investors Recoiling in Horror! / Interest-Rates / US Bonds
By: Martin_D_Weiss
Given the insanity on the Potomac last week, I cannot imagine a time when a clear vision of the future would be more crucial.
At 1600 Pennsylvania Avenue, President Obama signed a new fiscal package, which …
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Sunday, December 19, 2010
U.S. Economy Muddling Through, More Crises, More Global Risk Aversion Ahead / Interest-Rates / Global Debt Crisis
By: Bryan_Rich
For the better part of 2009 and for the second half of 2010, the world’s focus has been on how dreadful things look in the U.S. and how great the opportunities are said to be everywhere else.
But despite all of the anti-dollar and anti-U.S. policy sentiment that has proliferated around the world, apparently the financial markets haven’t felt the same way!
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Saturday, December 18, 2010
Central Banking 101: What the Fed Can do as "Lender of Last Resort" / Interest-Rates / Central Banks
By: Ellen_Brown
We’ve seen behind the curtain, as the Fed waved its magic liquidity wand over Wall Street. Now it’s time to enlist this tool in the service of the people.
The Fed’s invisible hand first really became visible with the bailout of AIG. House Speaker Nancy Pelosi said in June 2009:
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Saturday, December 18, 2010
The Bell Tolls for the U.S. Treasury Bond Market Investors / Interest-Rates / US Bonds
By: Peter_Schiff
There is an old adage on Wall Street: no one rings a bell to signal a market top or bottom. Yet, I have found that bells do ring; it's just that few people know exactly what sound to listen for.
Perhaps the biggest and most liquid of all markets is for US government bonds. That market has been rallying for almost thirty years. The bull can be traced back to 1981, when Treasury bond yields peaked at about 15%. At that time, high inflation and a weakening dollar had justifiably squelched demand for Treasuries. Even the ultra-high interest rates were not enough to attract buyers.
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Friday, December 17, 2010
Shorting U.S. Treasury Bonds Using TBT / Interest-Rates / US Bonds
By: Guy_Lerner
I have been highlighting higher Treasury yields since October 15 (well before the heard), and I also mentioned on December 8 that the move higher in Treasury yields would "pick up steam". But every price move has its limits, and the Ultra Short Lehman 20+ Year Treasury (symbol: TBT) is no different.
Thursday, December 16, 2010
How to Reduce the U.S. National Debt Without Raising Taxes or Cutting Spending / Interest-Rates / US Debt
By: Submissions
Michael Sekora writes: Discussions about deficits and debt reduction inevitably center on whether and how to reduce government spending or increase tax rates. Proponents of increasing taxes argue over what level tax rates should be increased to and for which segments of the population. Proponents of decreased spending debate which federal programs should be trimmed or eliminated altogether. But this choice is a classic false dichotomy. If we grow the economy enough, we won’t have to rely on massive tax hikes or spending cuts.
Thursday, December 16, 2010
Quantitative Easing Unintended Consequences, Rising Interest Rates / Interest-Rates / US Interest Rates
By: John_Mauldin
Correct me if I'm wrong, but I seem to remember that one of the reasons for QE2 was to lower rates on the longer end of the US yield curve. Clearly, that has not happened? Today we look at come of the unintended consequences of monetary policy, turn our eyes briefly to consumer debt, and wonder about deflating incomes. There are a lot of very interesting things to cover. (This letter will print long, but there are a lot of graphs. Usual amount of copy.)
Wednesday, December 15, 2010
Chinese Take-Out Of The U.S. Economy, Debt Crisis Triggering Reserves Conversion into Gold and Silver / Interest-Rates / US Debt
By: Jim_Willie_CB
The Chinese really must think the American strategy and behavior to be braindead and self-destructive. The US helped them assemble a manufacturing industry, replaced US income with debt, and finally faces the Grim Reaper in a national episode of systemic failure. The US leadership is as stupid and mindless as the population is driven by compulsive consumption over the cliff, as the nation faces ruin. The Jackass warning has been for five years that the Chinese experiment would end in tragedy, and that when a preponderance of USTreasury debt is owned by foreigners, especially a single foreign nation, the Untied States will lose its sovereignty.
Wednesday, December 15, 2010
U.S. Treasury Bond Interest Rates Rising Steeply / Interest-Rates / US Interest Rates
By: Richard_Shaw
Contrary to Bernanke's goal of lowering interest rates by the QE II intervention, rates have been rising. In fact, they have begun to rise steeply as of late, with corresponding decline in bond prices. The following two charts for the 10-year Treasury bond illustrate the situation (top chart yield, bottom chart price). Better cash than bonds right now - or high quality, high yield growth US equities.
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Wednesday, December 15, 2010
U.S. Bond Market Investment Strategy For 2011 / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
For those seeking greater safety, bonds will be the wrong place to look in 2011.
To understand why, we need to look back more than 25 years - to a time when economic conditions were very different than they are today.
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Wednesday, December 15, 2010
The Fed’s Final Days, The Temple Of Paper Money Is Under Seige / Interest-Rates / Central Banks
By: Darryl_R_Schoon
In 2008, America suffered a massive economic heart attack. Its doctors, thought to be the world’s best, believed the US to be in good health, having recovered from a similar though smaller crisis in 2000.
But America hadn’t recovered. In fact, the Fed’s palliative for the 2000 crisis, i.e. lower interest rates, soon created an even larger crisis, i.e. the 2002-2006 US housing bubble whose collapse caused global credit markets to contract and investment banks to fall, necessitating government intervention on such a massive scale it led to today’s sovereign debt crisis as private losses were absorbed onto public balance sheets; and, now, in 2010, the crisis continues to fester and spread.
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Wednesday, December 15, 2010
Muni Bond Funds Blood Bath, Will it Continue? / Interest-Rates / US Bonds
By: Mike_Shedlock
Inquiring minds are watching a huge selloff in Municipal Bond Funds. Here are a few charts.
Wednesday, December 15, 2010
FOMC Policy Statement, Fed on Watch-and-Wait Mode / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The Fed is essentially on a watch-and-wait mode. The asset purchase plan of $600 billion of longer-term Treasury securities, known as QE2, was left intact and the program is set to expire in June 2011. The Fed made small modifications to the November policy statement. The pace of economic recovery is now seen as "insufficient to bring down unemployment" vs. a more amorphous description in November that output and employment conditions are "slow." The Fed upgraded its view about consumer spending and depicted it as "increasing at a moderate pace," while in November, the Fed saw consumer spending as "increasing gradually." The retail sales report of November (see discussion below) justifies this modification. The Fed indicated in November that "housing starts continue to be depressed," which is now revised to read as the "housing sector continues to be depressed."
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Monday, December 13, 2010
December 14 FOMC Meeting, Interest Rate Surprises Are Unlikely / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The last FOMC meeting for 2010 is likely to end without any surprises. The Fed is expected to maintain the current band (0%-25%) for the federal funds rate. There has been significant criticism about the $600 billion purchase of Treasury securities to provide an extra lift to economic activity and bring about a lower unemployment rate. The Fed projected lower interest rates and a depreciation of the dollar as a result of the second round of purchases of securities, termed as QE2. However, yields have risen since the announcement of QE2 on November 3. The 10-year Treasury note yield closed at 3.32% on December 10, the highest since June 10, 2010 (see Chart 1). Mortgage rates have risen close to 40bps since November 3 (see Chart 1). Read full article... Read full article...
Monday, December 13, 2010
Higher Long-Term U.S. Treasury Yields Ahead / Interest-Rates / US Bonds
By: Mike_Paulenoff
The eventuality of higher longer-term Treasury yields in the weeks and months ahead appears to be relentlessly marching towards us now. Time to start monitoring the UltraShort 20+ Year Treasury ETF (TBT) for the next entry window on the long side.
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Monday, December 13, 2010
Wall Street Gives Uncle Sam Too Much Credit / Interest-Rates / US Bonds
By: Michael_Pento
Despite the fact that the S&P is up over 80% in the last 21 months, US financial firms are currently tripping over each other in their zeal to raise their S&P 500 and GDP targets for 2011. JPMorgan's chief US equities strategist, Thomas Lee, came out on December 3rd with a target of 1425 on the S&P for 2011, which would be a 15 percent gain. Barclays Capital last Thursday released a 1420 estimate. Not to be outdone, Goldman Sachs also recently released its forecast, and it sees a more-than-20 percent increase next year, to 1450. Meanwhile, PIMCO's idea of a "new normal" has translated into a 2011 GDP forecast raised from 2-2.5% to 3-3.5% due to "massive" government stimulus.
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Saturday, December 11, 2010
European Monetary System Crisis, Euro Zone on the Edge of Collapse / Interest-Rates / Global Debt Crisis
By: Bob_Chapman
Believe it or not the euro zone and European Union crisis is still in the formative stages.
The bailout packages arranged for Greece and Ireland are not to bail out those two countries, but to bail out the European banks that lent to them and bought their bonds when it was imprudent to do so. They knew, because they control the governments that the public of the solvent governments would bail them out. Thus, the governments of Ireland and Greece with Portugal and Spain to follow will be showered with an Anglo-American style bailout.
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Friday, December 10, 2010
U.S. Interest Rates Surge as Fed, Congress Crush Debtholders / Interest-Rates / US Bonds
By: Mike_Larson
Washington, 0. The bond market, 1.
That’s the score folks, in case you haven’t been keeping track. The Federal Reserve Chairman said his $600 billion “QE2″ program would lower interest rates. Instead, rates have done nothing but rise since investors got wind of the Treasury buying plan.
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