Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, December 03, 2008
Central Banks Open the Money Printing Floodgates to fight Deflation / Interest-Rates / Money Supply
By: Gary_Dorsch
In the early 1980's, the Federal Reserve's headlines figures for the M1, M2, and M3 money supply aggregates flashed at the top of trader's radar screens, and jolted US T-bill rates by 50-basis points or bond yields by 30-points within minutes. Inflation was raging at a 10.7% annualized rate, and repeated attempts to cure it had failed. Former Fed chief Paul A. Volcker was doggedly pursuing a radical monetary policy that led to skyrocketing interest rates and two back-to-back recessions. Read full article... Read full article...
Tuesday, December 02, 2008
Search For Stimulus In a Zero Interest Rate Policy World / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Central bankers everywhere are Looking for Tools in a Zero Interest-Rate World .
The Swiss National Bank is becoming the first central bank in Europe to learn what it's like to live in a zero interest-rate world.
Read full article... Read full article...
Tuesday, December 02, 2008
U.S. Fed Monetizing Debt by Printing Money / Interest-Rates / Central Banks
By: Axel_Merk
Deflation won't happen here; at least not if Federal Reserve (Fed) Chairman's Ben Bernanke's plan pans out. Deflation is considered a persistent decline in prices of goods and services; in a speech in 2002 , Bernanke outlined the steps he would take if the U.S. ever faced the threat of deflation. Deflation is suffocating anyone holding debt as the debt burden becomes more difficult to finance with shrinking income; in contrast, inflation bails out those who have a lot of debt. In our assessment, fighting deflation is the Fed's top priority now; the latest minutes from the Fed's Open Market Committee (FOMC) meeting state: Read full article... Read full article...
Tuesday, December 02, 2008
U.S. Treasuries Massive Rally as Helicopter Ben Fires Buyback Bazooka / Interest-Rates / US Bonds
By: Mike_Shedlock
Treasuries staged yet another massive rally today as Helicopter Ben imitates Paulson and pulls out his own bazooka. Inquiring minds are noting that Treasury Yields Drop to Record Lows as Bernanke Cites Buybacks .
Treasuries rose, pushing yields to record lows, as Federal Reserve Chairman Ben S. Bernanke said the central bank may purchase Treasuries and target long-term interest rates to combat the deepening recession.
Read full article... Read full article...
Monday, December 01, 2008
UK Government Urging Banks to Lend / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Complete silliness reigns in the UK as Prime Minister Brown, Chancellor Darling, and BOE Governor Mervyn King Urge Banks To lend .
U.K. house prices dropped to the lowest level in almost three years in November as banks starved the property market of credit, Hometrack Ltd. said.
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Saturday, November 29, 2008
U.S. Treasury Bull Market Living on Borrowed Time / Interest-Rates / US Bonds
By: Mike_Paulenoff
I must confess that the pattern in the bond market is a bit surprising.
Yield on the 30-year T-bond fell to a low of 3.48% on Friday, which helped
to propel the Lehman 20+ Year T-Bond (AMEX: TLT) to a new high of 106.30.
Who exactly feels comfortable buying a 30-year piece of paper at less than
3.50% is a mystery in general, but specifically at THIS time, after all of
the stimulus and rescue plans, the incredible 24/7 use of the printing
presses, and during a period when equities are staging an impressive rally
(so far).
Read full article... Read full article...
Friday, November 28, 2008
Gold and UK interest Rates as Proxy for Global Price of Money / Interest-Rates / UK Interest Rates
By: Adrian_Ash
"...The nine decades of gold simply need not apply. Because there's just too much money chasing too many votes to make such a limiting system appeal..."
CENTRAL BANKING used to be easy, back when there was so little to do. You raised interest rates to attract an inflow of gold, supporting your currency on the foreign exchanges and restraining new credit at home. Or you cut interest rates to deter savers, and give the economy a shot of cheap money.
Read full article... Read full article...
Friday, November 28, 2008
Credit Crisis Watch- LIBOR Eases Whilst UK Spread Soars on Sovereign Debt Risks / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
For the world's financial system to start functioning normally again, it is imperative that confidence in the credit markets be restored. In order to gauge the progress being made to unclog credit markets, I regularly monitor a range of financial sector spreads and other measures. By perusing these one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect. Read full article... Read full article...
Tuesday, November 25, 2008
LIBOR Still at Credit Crisis Extremes as Banks Refusing to Lend / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The London Interbank Offered Rate (LIBOR) continues to fall from credit quake extremes, today falling to below 100 basis points (3 month) above the base interest rate that was cut in a panic move to 3% earlier this month. However as the below graph illustrates a 1% spread is still uncomfortably near credit crisis extremes and therefore implies that the banks are still reluctant to lend to one another which was confirmed by the Bank of England Governor Mervyn King who stated that extreme measures may be necessary to force the banks to lend again which in the final analysis implies nationalisation of the whole of british retail banking sector. Read full article... Read full article...
Monday, November 24, 2008
Bond Yields Breakout to New Multi-year Lows / Interest-Rates / US Bonds
By: Levente_Mady
The bond market convincingly broke out to new multi decade lows on yields. As the dismal economic data just continues to get worse, Treasury securities ironically remain the safe haven of last resort. Once the Quarterly Treasury auctions were out of the way, traders got the green light to boldly take the US Long Bond Futures to levels where no Long Bond contract has gone before! Risk remains the dirtiest of all dirty four letter words, so government bonds are the best place to hide. Read full article... Read full article...
Sunday, November 23, 2008
Credit Crisis Persists as Bond Spreads Widen / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
Reuters: Financials need at least $1 trillion - analyst
“The US financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said.
“Eight financial companies - Citigroup, Morgan Stanley, Goldman Sachs Group, Wells Fargo, JPMorgan Chase, AIG, Bank of America Corp and GE Financial - are in greatest need of capital, he said.
Read full article... Read full article...
Sunday, November 23, 2008
U.S. Treasuries, the Final Asset Bubble / Interest-Rates / US Bonds
By: Eric_deCarbonnel
So far, the credit crisis has produced four asset bubbles as investors shifted from one asset class to the next. Three of these bubble have burst, but the last one, US treasuries, remains. Read full article... Read full article...
Saturday, November 22, 2008
Citibank Seeks More Bailout Cash as Corporate Bonds Crash to 20% Yields / Interest-Rates / Credit Crisis 2008
By: John_Mauldin
- Leverage Is an 8 Letter Word
- If Loans Are So Cheap, Why Don't They Sell?
- Deflation and Helicopters: Time for a Review
- Commercial Property Loans Start to Haunt the Banks
- Warren Makes a Bet
Leverage is an eight-letter word, which the markets now regard as twice as bad as the two four-letter words debt and pain (or fill in your own four-letter words). This week I try to give some insight into what is happening in the credit markets, some of it below the radar screen of most analysts. We will look at the potential for deflation and the Fed's response. There is a lot to cover, so let's jump right in.
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Friday, November 21, 2008
Citigroup Breakup Speculation Sends Credit Default Risk Soaring / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
I have been saying for over a year that Citigroup would not survive in one piece. That option is looking increasingly likely as the Citigroup Board Weigh Options .
Citigroup Inc.'s board meets today to discuss the bank's options after Chief Executive Officer Vikram Pandit's efforts to rebuild investor confidence failed to halt the stock's descent to a 15-year low, a person with knowledge of the matter said.
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Thursday, November 20, 2008
Credit Collapse, U.S. Treasury Yields Fall to Record Lows / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Once again treasury bears who do not understand the implications of a collapse in credit are taking a beating as Treasury Yields Drop to Record Lows .
Treasury yields declined to record lows, with two-year notes dropping below 1 percent for the first time, as global stocks slumped and a deepening recession drove investors to the safest assets.
Read full article... Read full article...
Wednesday, November 19, 2008
U.S. Economy Reflation Challenge and LIBOR Deceptive Manipulation / Interest-Rates / Credit Crisis 2008
By: Jim_Willie_CB
A major challenge looms large on the immediate horizon. The US Economy must be reflated in order to avoid collapse. Debts have become a crippling factor. Liquidation of speculative trades coincides with economic retreat, and hedge funds are under attack by their creditors (largely Wall Street firms) while major companies shed workers by the tens of thousands. When asked about economic prospects, a standard answer lately of mine has been to observe important signals not of recession but of potential disintegration. Read full article... Read full article...
Wednesday, November 19, 2008
Economic Forecast, Peering into a Debt Ridden Future / Interest-Rates / US Interest Rates
By: Mick_Phoenix
Welcome to the weekly report. This week we look at some longer term indicators that will help identify when a turning point in the economy has arrived and why you should cancel Christmas, or at least go back to its traditional meaning, forgoing the pointless consumerism that surrounds it.
Before we start, you may have wondered (or not) why the weekly report wasn't around. I have spent the past 3 weeks laying out the groundwork for an attempt to peer into the longer term future. Subscribers have seen all 3 articles, culminating in the new scenario. I have released the first 2 articles to the public, the final part will also be released but not for awhile yet.
Wednesday, November 19, 2008
Misguided Bets On The Yield Curve Steepening / Interest-Rates / US Bonds
By: Mike_Shedlock
Bloomberg is reporting U.S. Long-Term Treasuries Advance as Consumer Prices Plummet . Treasuries maturing in 10 years or more, the most sensitive to inflation expectations, rose after a government report showed consumer prices dropped in October by the most on record.
Read full article... Read full article...
Saturday, November 15, 2008
Paulson's Blunders as Debt Securitization Market Remains Frozen / Interest-Rates / Credit Crisis Bailouts
By: Mike_Whitney
Henry Paulson's time at Treasury has been one pratfall after another. Even so, on Tuesday he managed to out-due himself. Paulson held a "surprise" press conference where he announced that the $700 billion Troubled Asset Relief Program (TARP) wouldn't be used to buy troubled assets after all. Instead, the money will used to bail out insurance giant AIG, provide extra capital for the banks to hoard, and now (this is new part) give money to "nonbank financial institutions, like insurers and specialty-finance companies" so they can lend to credit-worthy consumers. (Isn't that why we gave money to the banks?) Read full article... Read full article...
Thursday, November 13, 2008
Combating Credit Based Derivatives Deflation / Interest-Rates / Deflation
By: Mick_Phoenix
Welcome to An Occasional Letter. This week we pick up from the end of this article as we begin the process of peering into the future to assemble the next stage of the scenario I have followed over the past 6+ years.
However before we start I have recently had numerous e-mails asking to join my mailing list. I thank those people for their interest but I no longer run a mailing list since converting to a subscription only website. If you would like to know more, visit An Occasional Letter for details.