Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.Sunday, May 02, 2010
Sovereign Debt Crisis Dominos Are Lining Up to Collapse / Interest-Rates / Global Debt Crisis
Boy, what a week! I’ve been warning about a troubled euro and a building sovereign debt crisis for some time. And the bond and currency market activities this past week are a clear example that the momentum is picking up.
There’s a bumpy road ahead … and not just for Greece.
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Sunday, May 02, 2010
Global Debt Crisis Future Public Debt Trajectory Protections / Interest-Rates / Global Debt Crisis
There Had to Be a Short
How Should Our Institutions Invest?
The Future Of Public Debt
The Future Public Debt Trajectory
Debt Projections
Everyone and their brother intuitively knows that the current government fiscal deficits in the developed world are unsustainable. They have to be brought under control, but that requires some short-term pain. Today we look at a rather remarkable piece of research from the Bank of International Settlements (BIS) on what the fiscal crisis may morph into in the future, how much pain will be needed, and what will happen if various countries stay on their present courses. Some countries could end up paying north of 20% of GDP just on the interest to serve their debt, within just 30 years.
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Sunday, May 02, 2010
Roast the PIIGS, and End the Euro Debt Crisis / Interest-Rates / Global Debt Crisis
"Mankind differs from the animals only by a little and most people throw that away." ~ Confucius, BC 551-479, Chinese Ethical Teacher, Philosopher
The last meltdown was caused by the financial crisis in the United States, which was triggered by the onset of the housing and mortgage crisis. We now have the potential for a full blown currency crisis to unfold. Greek debt has been reduced to junk status and both Spain and Portugal have had their ratings lowered.
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Saturday, May 01, 2010
U.S. Treasury Bond Market Update / Interest-Rates / US Bonds
That darned bond market just won’t give up the ghost! So much to write about this week in so little space! Another record amount of supply (close to $130 Billion) was auctioned without a hiccup last week. The bond auctions were overshadowed by the FOMC meeting and some further supportive data on the fundamental front.
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Friday, April 30, 2010
EXTEND & PRETEND: Uncle Sam, You Sly Devil! / Interest-Rates / Credit Crisis 2010
The modus operandi (MO) of deviant behavior aids investigators in doing criminal profiling. Forensic accounting takes a similar approach and leads us to some unnerving conclusions about Uncle Sam. As Tax Payers we place our sacred trust in our elected officials and government. Is that trust being handled similarly to how Goldman Sachs apparently has been handling its fiduciary responsibilities?Read full article... Read full article...
Friday, April 30, 2010
Greece Armageddon, Financial Ebola Sweeps Through Global Bond Markets / Interest-Rates / Global Debt Crisis
What does the end of the bond market world look like? Something like this …
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Friday, April 30, 2010
The Phenomenon of Interest / Interest-Rates / Economic Theory
It has been shown that time preference is a category inherent in every human action. Time preference manifests itself in the phenomenon of originary interest, i.e., the discount of future goods as against present goods.
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Thursday, April 29, 2010
Greece Bond Market Crash, Europe and ETFs / Interest-Rates / Global Debt Crisis
When Americans hear about Greece, the first thought that comes to mind is usually “ancient history.” Now Greece is all over the headlines for its financial woes.
But if truth be told, Greece hasn’t done anything different from many other countries, including the U.S.! The government simply spent too much money, the citizens enjoyed too many overly-generous social programs, and eventually the bill came due. Now someone has to pay up — and the Greeks don’t have the cash.
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Wednesday, April 28, 2010
Greek Debt Crisis Won’t Spawn Second Global Financial Crash / Interest-Rates / International Bond Market
Martin Hutchinson writes: The Greek debt crisis is starting to display an uncanny resemblance to the subprime crisis that sank the U.S. housing market, sent the global economy into a tailspin and touched off the worst financial crisis since the Great Depression.
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Tuesday, April 27, 2010
Greece Government Bond Market Panic Crash, Yields Hit 18%, Portugal Next? / Interest-Rates / Global Debt Crisis
It did not take too long for contagion to spread (one day), smack in the face of EU statements that contagion was no risk. Why the EU would put themselves in a position to look so foolish is beyond me. Here is a series of articles to consider.
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Tuesday, April 27, 2010
Portugal Suffering Greek Debt Contagion / Interest-Rates / Global Debt Crisis
Nothing new to long time readers as we've pointed out repeatedly that the newest, and biggest bubble of them all is the government debt bubble. [Feb 5, 2010: Sovereign Risk Chart - Where Would the US Fit in, on Europe's Scale?] In a world fixated only on benefits, and could care less of the costs as long as they are borne by taxpayers, very few seem to care these days. It is now the ethos that whatever the problem, a central bank or government will throw a country's populace under the bus to "solve" it.
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Tuesday, April 27, 2010
Possible Misunderstandings about Municipalities and their Bonds / Interest-Rates / Global Debt Crisis
Problems of state and municipal finance worsen. Governors announce new spending cuts at press conferences but inspire little confidence. The fury of emergency announcements leaves the listener (as well as the governors) in a daze. Research reports offer broad explanations but have left bondholders, as well as employees and local residents, unprepared for discontinuities. In other words, there will be instances when these constituencies will find themselves marched to the slaughterhouse without warning.
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Tuesday, April 27, 2010
U.K. Mortgage Interest Rates at Lowest Level in a Year / Interest-Rates / Mortgages
When bank base rate dropped to 0.50% last year the mortgage market entered unchartered waters. Initial reductions in mortgage rates were soon wiped out as lenders took an increasing margin for risk.
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Tuesday, April 27, 2010
The Greek Debt Tragedy From Banks to Sovereigns Back to Banks / Interest-Rates / Global Debt Crisis
Back and recovering from my Strategic Investment Conference this weekend (where I decided to give myself permission not to write my usual letter, but I promise I will be back at it this next Friday!) I have spent some time pondering what we learned. It was a fabulous conference. Lacy Hunt, Dr. Gary Shilling, David Rosenberg, Niall Ferguson, Paul McCulley, George Friedman, former Fed Senior Economist Jason Cummins (who is now Chief Economist for Brevan Howard, the largest European hedge fund, and who was quite impressive), Jon Sundt of Altegris, and your humble analyst were all in top form. I must admit with a little pride that I think this is the finest speaker lineup for ANY investment conference anywhere. We were given a lot to think about.
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Monday, April 26, 2010
Rising Interest Rates Right Around the Corner! Protect Yourself NOW! / Interest-Rates / US Interest Rates
Benjamin Franklin once called death and taxes the only certainties in this world. These days, I’d add rising interest rates!
I believe they’re coming … that the Federal Reserve is powerless to stop the inevitable … and that investors need to take protective action immediately.
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Monday, April 26, 2010
U.S. Treasury Bonds Stay Long and Earn the Carry! / Interest-Rates / US Bonds
The bond market successfully chopped sideways last week. Inflation data on both sides of the border remains supportive in spite of the hawkish tone from the Bank of Canada meeting last week. The busy supply agenda continues to counterbalance the positive fundamentals as another record amount of supply (close to $130 Billion) is scheduled for auction during the next week. The continuing positive tone in commodities and equities still can’t seem to put any sustained pressure on rates to rise.
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Sunday, April 25, 2010
U.S. Treasury Bond TBT Upside Potential / Interest-Rates / US Bonds
CHICAGO -- Regulators shut down seven Illinois banks Friday, bringing this year's tally of failed U.S. banks and thrifts to 57. The Federal Deposit Insurance Corp. found buyers for all of the failed institutions, and the failed banks' branches were all expected to reopen Saturday.Read full article... Read full article...
Sunday, April 25, 2010
Greek Debt Crisis: Lehman 2.0? / Interest-Rates / Global Debt Crisis
As if Greece did not already have enough problems. The market was already jolted by the Goldman SEC case. Then, it was the cloud of volcanic ash from Iceland postponed a key meeting with European Union (EU) and International Monetary Fund (IMF) officials on aid for the country.
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Saturday, April 24, 2010
EXTEND and PRETEND, Is the U.S. Facing a Cash Crunch? / Interest-Rates / Credit Crisis 2010
The US Government is caught in a cash vise and is being squeezed between too slow a rebound in tax revenues and the limitations on how quickly it can realistically take its funding requirements to the US Treasury auction. The US Treasury was saved in March by what the government reports as “proprietary receipts”. Those receipts require an explanation that is not well publicized since it begs the question of what happens next month without the $117 BILLION journal entry.
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Friday, April 23, 2010
How the Banks Print Their Money / Interest-Rates / US Interest Rates
Gosh! Banks print money, bleeding tax-payers and savers for ink...
RESCUING THE BANKS was supposed to be about saving the savers.
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