Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, July 01, 2008
Treasury Bond Investors Mysteriously Prepared to Receive Negative Real Returns / Interest-Rates / US Bonds
By: Michael_Pento
It has become apparent to me that investors who continue to place money in the U.S. Treasury market don't have any idea how to protect themselves from inflation or how to achieve a real return on their investments. Even though inflation is running at a multi-decade high (according to official government numbers), we find that these fixed income investors were willing to send the yield on the 10 year note to an historical low of 3.38% on March 19th of this year. As amazing as that sounds in a world of 4+% “official” inflation rates, it was nothing compared to what happened just last month.Read full article... Read full article...
Tuesday, July 01, 2008
US Treasuries May Be Ending Recovery Rally Phase / Interest-Rates / US Bonds
By: Mike_Paulenoff
Once again perhaps we can derive a message from the action of the Lehman 20-Year T-Bond ETF (AMEX: TLT), which today failed to climb above yesterday's 6-week recovery high at 92.81 in what I thought would be an extension of the "flight to safety" syndrome in an otherwise treacherous equity market. No such action has taken place thus far this morning.Read full article... Read full article...
Tuesday, July 01, 2008
Credit Conditions Worst in 35 years as US Manufacturing Contracts / Interest-Rates / Credit Crisis 2008
By: Paul_L_Kasriel
Not to belabor the point I have made in recent commentaries, but last Friday afternoon's report from the Fed of assets and liabilities of commercial banks in the U.S. showed the sharpest 13-week contraction in bank credit - loans and investments - in the history of the series, which dates back to January 3, 1973. In the 13 weeks ended June 18, bank credit contracted at an annualized rate of 9.14% (see Chart 1 below). Because of current or expected capital inadequacy, banks are reining in their earning assets and, therefore, are not availing themselves of the cheap credit the Fed is offering to fund them at. This suggests that the 2% fed funds rate in the current context does not represent as accommodative a monetary policy as it would if the banking system were willing and able to extend credit to the private sector. Read full article... Read full article...
Monday, June 30, 2008
US Treasury's Retain Steepening Yield Curve Trend / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market is on a tremendous winning streak: it is up for the second week in a row! Safe haven flows continue to dominate as bonds strangely trade higher in step with increasing energy prices. The financial sector continues to melt away in spectacular fashion as the US stock market looks to be heading for one of its top 10 largest monthly drops ever. Credit spreads remain under pressure and liquidity is not improving. Quarter end window dressing will definitely not help the sectors that have been beaten down at least for the next few days.Read full article... Read full article...
Saturday, June 28, 2008
Fed Money Supply and Aggregate Credit Not Fueling US Inflation / Interest-Rates / Money Supply
By: Paul_L_Kasriel
One of the tenets of that now allegedly defunct economic schools, monetarism, is that you cannot judge the stance of monetary policy by the level of the policy interest rate. Sometimes a 2% fed funds rate might be accommodative; sometimes restrictive. Right now, the 2% fed funds rate is not the catalyst for excessive growth in the money and credit aggregates. Let's start with the credit directly created out of thin air (similar to counterfeit money) by the Federal Reserve - the monetary base. Read full article... Read full article...
Saturday, June 28, 2008
Credit Derivatives Deleveraging End Game / Interest-Rates / Credit Crisis 2008
By: Mick_Phoenix
Welcome to the Weekly Report. This week we get so bearish that even I worry that my personal sentiment indicator may have reached an extreme. We tie up some loose ends and recap Citigroup.
"The opera ain't over until the fat lady sings." Singing? I doubt there is a bear in the world that isn't humming the Ride of the Valkyries as the charts tell a tale that will scare your grandchildren. It's looking ugly and has the potential to get downright repulsive. That potential shows up when a longer term view of the charts is taken. This week we look at banks, more specifically those banks that participated or later merged/bought/bailed out with banks that helped liquefy the LTCM rescue.
Saturday, June 28, 2008
Fed Blows It! Wall Street and Dollar Pounded! / Interest-Rates / US Interest Rates
By: Money_and_Markets
Mike Larson writes: Boy, did Federal Reserve Chairman Ben Bernanke blow it this week!
Investors were looking for a strong Fed statement because they believed it would support the dollar and snuff out the recent surge in commodities prices.
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Saturday, June 28, 2008
Turf Wars: Fed, SEC vs. Congress, Treasury / Interest-Rates / Market Regulation
By: Mike_Shedlock
The infighting between Fed governors as noted in Fed Governors Openly Question Bernanke's Competence , has now become a major turf war involving the Fed, Congress, the treasury department, and the SEC.Senators Dodd, Shelby Warn Fed, SEC on Rushing Securities Deal .
Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission Chairman Christopher Cox were ordered by two top senators not to proceed with a deal overseeing Wall Street until consulting with Congress.
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Thursday, June 26, 2008
Markets Panic as Feds Bluff Called on US Interest Rates / Interest-Rates / US Interest Rates
By: Jim_Willie_CB
For the last couple weeks, my attention has been given to the amusement and desperation behind propaganda, bluffs, and the utter desperation of the US Federal Reserve in the orchestrated rumors of a new position wherein they would soon or eventually raise the official interest rate in order to combat the horrendous price inflation brought about by the falling crippled US Dollar. What utter nonsense! To hear that the investment community actually accepted and embraced this notion was laughable on its face, and served as continued evidence that the loose collection of investors, speculators, and observers simply cannot wake up reality despite the events that began last August 2007 when the mortgage debacle ripped the banking system wide open with gaping wounds. The US Fed needs to arrest the falling US Dollar., no doubt. But it cannot. Read full article... Read full article...
Thursday, June 26, 2008
FOMC Stays on Hold, Keeping Its Interest Rate Options Open / Interest-Rates / US Interest Rates
By: Paul_L_Kasriel
The Fed is less worried about a death spiral in real economic activity and more worried about upside risks on inflation than it was at the end of April. This does not mean that the economic downside risks and inflation upside risks are equal in the eyes of the FOMC. In my opinion, the Fed remains more worried about weaker economic activity than it is about a wage-price spiral. Recent data suggest that housing is nowhere near a bottom, capital spending remains weak and the labor markets continue to soften.Read full article... Read full article...
Wednesday, June 25, 2008
Waiting for the Fed's US Interest Rate Decision and Statement / Interest-Rates / US Interest Rates
By: Jennifer_Yousfi
Economists and investors wait with bated breath for the U.S. Federal Reserve to release the statement from the Federal Open Market Committee this afternoon (Wednesday) at 2:15 p.m. EDT.
While it is almost universally expected that the FOMC will vote to hold the Federal Funds rate steady at its current 2.0%, the language in the accompanying statement will be scrutinized for clues about the upcoming August and September meetings.
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Tuesday, June 24, 2008
Fed Futures Discounting Interest Rate Hikes and Dollar Support / Interest-Rates / US Interest Rates
By: Black_Swan
Today begins a heavily anticipated FOMC meeting. Yeah, we know all the meetings are hyped-up quite a bit, but this one’s a little different. That’s because the head hauncho, Ben Bernanke, has changed his tone.
Coming off a series of rate cuts that’s taken the Fed Funds rate from 5.25% all the way down to 2%, Bernanke is talking like he’s already prepared to start hiking his benchmark rate right back up. His comments over the last few weeks have been aimed most directly at inflation (rather than the potential for further economic weakness). He’s even made clear remarks about the consequences of a weak U.S. dollar.
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Tuesday, June 24, 2008
Credit Crisis to Deteriorate on Credit Derivative Debacle / Interest-Rates / Credit Crisis 2008
By: Mark_OByrne
Gold closed at $984.40 in New York yesterday and was down 17.30 cents and silver closed at $16.76, down 57 cents. Gold rallied in Asia and in early European trading to recover some of yesterday's sharp losses. Oil has risen to near record highs, above $138 a barrel again this morning and the dollar has given up much of yesterday's gains (1.557 to the Euro) and this is likely leading to gold buying.
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Monday, June 23, 2008
All Eyes on the Fed Signals on US Interest Rates and Inflation / Interest-Rates / US Interest Rates
By: William_Patalon_III
The U.S. Federal Reserve will be in the spotlight again this week - and not because of those speaking engagements that seem to help whipsaw investor emotions. Tomorrow (Tuesday) and Wednesday, central bank Chairman Ben S. Bernanke will meet with his fellow policymakers on the interest-rate setting Federal Open Market Committee (FOMC). Read full article... Read full article...
Monday, June 23, 2008
Fed Interest Rate Cuts Have Fed Food and Fuel Inflation / Interest-Rates / Money Supply
By: Andy_Sutton
“Between a rock and a hard place” - Over the past few months, the US Federal Reserve, amid much fanfare, has lowered the benchmark interest rate from 5.25% to 2%. This loose policy was lauded by those in the financial media as being the right thing to do to prop up the economy, and banks in particular. Bernanke went from being the goat to the hero almost overnight. Rest easy folks, our Fed Chairman is on board; finally having gotten with the program. Read full article... Read full article...
Monday, June 23, 2008
Fed to Keep Interest Rates on Hold for Months if Not Years / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market finally showed some signs of life last week after a multi-week annihilation. It was a relatively quiet week in bond land as traders were more preoccupied with ever rising energy prices and ever increasing problems in the financial sector. After many months of deliberations the rating agencies finally got around to downgrading the bond insurers. 2 observations are in order here: 1, don't ever never ever never rely on the rating agencies for advice as they are severely, severely lagging indicators and they have a huge conflict of interest and 2, make sure you have a chuckle and quickly dismiss anyone who is trying to sell you on the idea of efficient markets. Read full article... Read full article...
Sunday, June 22, 2008
How the Fiat Money System Invents Money and What's Gone Wrong / Interest-Rates / Fiat Currency
By: Mick_Phoenix
This week I want to aim the article at those who normally do not frequent financial bulletin boards or sites. You, the reader, need to help me in this cause.
People who read financial BB's are already interested and to some extent (though not always) informed about how certain economic conditions occur and can hold a healthy debate about the cures for such ills.
Saturday, June 21, 2008
$2 Trillion Credit Contraction as Consumer Debt Defaults Soar / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Credit is drying up everywhere. Banks are now concerned (finally), about rising credit card debt. They have every reason to be. The bankruptcy reform act of 2005, which encouraged such reckless lending is now blowing up in lenders' faces. Banks and credit card companies wrote that bill. They got everything they wanted. It goes to show you two things:
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Saturday, June 21, 2008
Fed and US Dollar Credibility at Stake Due to Financial Crises and Surging Inflation / Interest-Rates / Inflation
By: Money_and_Markets
Jack Crooks writes: For the currency markets I follow, and every other financial market right now, inflation is the buzz word. Each and every new report of rising prices releases new concern — whether the threat is revealed in Brazil, the United States, Europe or even your local grocery store.
No one likes forking over more cash this month than they did last month ... for anything. But this inconvenient fact is being increasingly realized across the world.
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Saturday, June 21, 2008
Fed Emergency Liquidity Flood Not Bourn Out by the Facts / Interest-Rates / Credit Crisis 2008
By: Paul_L_Kasriel
We constantly hear from the talking heads that the Fed's recent policy actions are creating mammoth amounts of financial liquidity. But have these talking heads bothered to look at the data? If they did, they would have to change their tune.
Let's start with the raw material of financial liquidity created by the Fed - the size of its balance sheet. Chart 1 shows that the year-over-year growth in the total assets of the Federal Reserve System was up 3.85% in the week ended June 18.
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