Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, December 16, 2008
Madoff Fraud and the U.S. Government Debt Ponzi Scheme / Interest-Rates / Scams
By: Peter_Schiff
As the multi-billion dollar Ponzi scheme orchestrated by Wall Street insider Bernard Madoff unravels in the media spotlight, the nation is being presented with a rare opportunity to understand the true nature of many of our most cherished financial structures. Hopefully we have the wisdom to connect the dots.Read full article... Read full article...
Tuesday, December 16, 2008
Zero Interest Rates Policy Arrives as Fed Targets 0% to 0.25% / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Effective today, the Fed is done cutting rates. ZIRP has arrived. The Fed is targeting interest rates in a range of 0 to 1/4 percent as noted today's FOMC Press Release .
Release Date: December 16, 2008 - For immediate release
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Tuesday, December 16, 2008
U.S. Treasury Bonds Blow-off Top? / Interest-Rates / US Bonds
By: Levente_Mady
The bond market just keeps on chugging higher. Yields on the 30 year Treasury Bond decreased for a 6 th consecutive weeks as the Long Bond future rallied an unprecedented 23 points since the end of October. If it looks like a duck, walks like a duck and quacks like a duck, then it must be just another blow-off top. It is really no big deal, blow-offs have been a dime a dozen this year, so there is no reason to get too excited. Read full article... Read full article...
Tuesday, December 16, 2008
Federal Reserve Characteristics of a Crime Syndicate Faces Lawsuits / Interest-Rates / Credit Crisis Bailouts
By: Jim_Willie_CB
The principal missing piece in the grand American mosaic of banking destruction, corrupt collusion, fraudulent bonds, Wall Street control, suppressed regulators, compromised ratings agencies is JUSTICE . Foreign entities are aghast as the lack of prosecution, remedy, and removal from positions of power, as policy continues to be set by the participants responsible for the structural failure and prevalent fraud. Their actions are reaching climax levels. The climax of the Wall Street strangehold is the confiscation of the TARP funds to date. However, whatever has not been nationalized is subject to lawsuits . The pattern of human behavior indicates that lawsuits can spawn additional lawsuits, and quickly control is lost. It is open season on Citigroup, Bank of America, and perhaps other lesser players. Read full article... Read full article...
Monday, December 15, 2008
Any Confidence in Corporate America could send Corporate Bond Prices Higher / Interest-Rates / US Bonds
By: Paul_J_Nolte
Cars – from the musical group to songs about various models (Little Deuce Coupe, Pink Cadillac) to songs about the road (Route 66, King of the Road) it is little wonder the market was captivated by the death dance in Washington regarding the auto companies. When it looked as though they would crash and burn, the markets indicated a 4-5% decline coming into Friday, only a willingness by the White House and the Treasury to use money earmarked for the financial sector, did the markets turn slightly higher on the week.Read full article... Read full article...
Saturday, December 13, 2008
Free Money with that Credit Default Swap? / Interest-Rates / Credit Crisis 2008
By: John_Mauldin
- Things That Should Not Be
- I'll Pay You to Hold My Cash
- Pushing on a String
- Free Money with that Credit Default Swap?
- Oil Does a Strange Contango Dance
- The Tragedy of Bernie Madoff
There are things in today's markets that are simply astounding. They should not exist, yet they do. Why should US bills trade at negative interest? How can oil be trading at all-time highs in terms of spreads over the next year? Bank debt and bonds are trading at discounts not to be believed. Want some free money? I show you a trade that gives you (almost) just that. Fed funds at zero? Are we starting to push on a string? We'll cover all this and more in this week's letter.
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Friday, December 12, 2008
Government Flood of Treasury Obligations Telegraphing Inflation / Interest-Rates / Inflation
By: Peter_Schiff
A Nightmare Before Christmas - Like many pragmatic economists I have always warned that rapid expansions of government debt would result in inflation and higher interest rates. The explanation was always simple: rising supply of government debt inflates the money supply and weakens the government’s ability to service its debt through legitimate means.Read full article... Read full article...
Friday, December 12, 2008
Trillion Dollar Bailout Liabilities Desensitisation / Interest-Rates / Credit Crisis Bailouts
By: Andy_Sutton
In the current climate, where the overriding opinion of most mainstream financial commentators is that deficit spending is a good thing and the only thing better than one bailout is two bailouts, it is time to inject a bit of logic and sanity.
Sure, I made the argument in last week's edition that IF the Feds are going to throw over $8 Trillion at the financial system which produces nothing, why not throw Big Auto a bone? At least they produce something. However, this line of reasoning should not be taken as any kind of endorsement of our Bail-o-Matic Congress or its actions.
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Friday, December 12, 2008
U.S. Bond Markets on the Edge of Collapse / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: I thought I had witnessed a lot of craziness in the bond market over the past year:
• The utter obliteration of subprime mortgage bonds …
Friday, December 12, 2008
U.S. Treasury Bond Market Bubble Hits Manic Stage / Interest-Rates / US Bonds
By: Michael_Pento
This week marked the beginning of what I believe is the manic bubble stage in the nearly three decade long Treasury bull market. On Monday, the U.S. Department of Treasury sold $27 billion of three month bills at a discount rate of .005%. That rate is the lowest since the auction began in 1929. On Tuesday, $30 billion of four-week Treasury bills were sold at 0%! Again, the lowest yield ever recorded for that security.Read full article... Read full article...
Thursday, December 11, 2008
Fed Seeks to Issue Own Debt to Soak up Excess Liquidly / Interest-Rates / US Debt
By: Paul_L_Kasriel
The Credit Rating on a Benevolent Counterfeiters Debt - Infinity A? - In today's Wall Street Journal a trial balloon was floated with regard to the Fed issuing its own debt. This is akin to a counterfeiter issuing her own debt. There could never be a default. All the counterfeiter would have to do is print up some new currency to pay the interest on or redeem her debt. The Fed also possesses the power of the printing press, so it would never default on its debt. Of course, there is no guarantee what the future purchasing power of the payments would be to the Fed's creditors, but that is a different issue. Read full article... Read full article...
Wednesday, December 10, 2008
Goldman Recommends Credit Default Swaps as States Face Bankruptcy / Interest-Rates / US Bonds
By: Mike_Shedlock
On November 25 I wrote State of New Jersey Is Insolvent
The state of New Jersey is insolvent. Bankrupt might be a better word. New Jersey is $60 billion in the hole on pension funding and the Governor is planning on skipping payments in a "pension payment holiday" until 2012 so as to not increase property taxes. To top it off, the ongoing plan assumptions are 8.25%. Sorry NJ, that simply is not going to happen. ....
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Wednesday, December 10, 2008
The State of State Municipal Bond Funds / Interest-Rates / US Bonds
By: Richard_Shaw
Several of our clients have come to us this past week with questions and concerns about municipal bond funds.
They are concerned about recent performance, about California projected cash shortages, about many states struggling with budget deficits, about the fate of revenue bonds in the face of current economic problems; and whether the US government would bailout states the way they are bailing out banks, insurance companies, industrial “banks”, federal mortgage agencies, and automobile companies.
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Tuesday, December 09, 2008
Credit Crisis Watch- Banking Sector Distrust Remains High / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
In order to gauge the progress being made to unclog credit markets and restore confidence in the world's financial system, I monitor a range of financial spreads and other measures. By perusing these, as summarised in this “Credit Crisis Watch” review, one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect.
First up is the LIBOR rate. This is the interest rate that banks charge each other for one-month, three-month, six-month and one-year loans. LIBOR is an acronym for “London InterBank Offered Rate” and is the rate charged by London banks, and which is then published and used as the benchmark for banks' rates around the world.
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Monday, December 08, 2008
The Great U.S. Treasury Bond Market Trap / Interest-Rates / US Bonds
By: Captain_Hook
One of the more unusual manifestations of the financial meltdown this year has been the dollar spike, that caught a lot of traders by surprise, and was generated in part by a stampede into the percieved safety of short-expiry US Treasuries, which necessitated the purchase of US dollars. This is now arriving at its ultimate conclusion where Treasury yields have been beaten down to zero, which means that in real terms they are negative, resulting in the bizarre situation where investors are now paying the US government for the privilege of lending them money. This is clearly an untenable circumstance that cannot be expected to continue indefinitely, and it has only been occasioned by desperation, as panicked investors have sought safe haven. Read full article... Read full article...
Monday, December 08, 2008
U.S. Treasury Bonds Reach Extreme Overbought State / Interest-Rates / US Bonds
By: Levente_Mady
The bond market not only held the breakout levels from a couple of weeks ago, but continued to power ahead to the lowest yields seen on long term Treasury Bonds in half a century. The US administration, the Treasury and the Federal Reserve along with authorities world wide have been desperately trying all sorts of new programs to foster the flow of credit. Thus far these programs have not seemed to work. It feels like the authorities are just throwing money, programs, bailouts at a wall and hope that something will stick. Read full article... Read full article...
Saturday, December 06, 2008
Low Interest Rates Spell Big Problems / Interest-Rates / US Bonds
By: Peter_Schiff
Government and mainstream economists have erroneously concluded that the key to reversing the financial free fall can be found in stopping the plunge in home prices. (I would offer the corollary that the key to reducing injuries in auto accidents is to suspend the laws of inertia). But to accomplish the improbable task of re-inflating the housing bubble, the government appears ready to announce a coordinated plan to push down mortgage rates to just 4.5%. Of course, this is precisely the wrong solution to the housing crisis, but when it comes to bad ideas our government has been remarkably consistent. Read full article... Read full article...
Friday, December 05, 2008
Bank of England's Money Printing Nuclear Option / Interest-Rates / UK Interest Rates
By: Mark_OByrne
Gold fell nearly 0.6% yesterday on light volume as the dollar was mixed and oil and most commodities fell sharply again. Gold in euros and particularly British pounds rose sharply when interest rates were slashed by the ECB and BoE. Both central banks indicated that more cuts were likely. Gold has given up some of yesterday’s gains but remains firm in British pounds and Euros at £526/oz and €604/oz respectively.Read full article... Read full article...
Friday, December 05, 2008
U.S. Treasury Bonds the Biggest Bubble of All? / Interest-Rates / US Bonds
By: Money_and_Markets
Mike Larson writes: We've lived through some truly historic bubbles in recent years:
• The dot-com bubble was a doozy …
• The housing bubble was even bigger, and …
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Friday, December 05, 2008
European Historic Interest Rate Cuts Suggest Dismal Economic Outlook / Interest-Rates / Euro-Zone
By: Victoria_Marklew
The Bank of England (BoE), the European Central Bank (ECB), and Sweden's Riksbank all slashed their policy interest rates Thursday morning, and all cited the same reasons - that demand conditions have deteriorated markedly, and that inflation is likely to undershoot their respective medium-term targets. Even after the drama of this morning's moves, rates are likely to go lower in 2009, particularly in the Euro-zone. Read full article... Read full article...