Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, June 08, 2008
Signs of the End for Fed US Interest Rate Cuts Are Everywhere / Interest-Rates / US Interest Rates
By: Donald_W_Dony
With inflationary pressures coming out of Pandora's box again, and largely fueled by soaring crude oil prices, is it any wonder that the Fed has stated in its last FOMC meeting in late April that this rate cut was "a close call" and that "any future rate deductions will be closely reviewed". The talk now, coming from Mr. Bernanke, is concern surrounding the low level of the U.S. dollar and inflation. So as the shift in direction has moved 180 degrees from providing stimulus to the financial markets and preventing a recession from taking root to inflation and currency protection. But were there signs of this new direction earlier in the market? From an intermarket perspective, there were plenty of clues by April. Read full article... Read full article...
Saturday, June 07, 2008
Next Phase of the Credit Crisis to Hit Credit Default Swaps $62 Trillion Market / Interest-Rates / Credit Crisis 2008
By: F_William_Engdahl
While attention has been focused on the relatively tiny US „sub-prime“ home mortgage default crisis as the center of the current financial and credit crisis impacting the Anglo-Saxon banking world, a far larger problem is now coming into focus. Sub-prime or high-risk Collateralized Mortgage Obligations, CMOs as they are called, are only the tip of a colossal iceberg of dodgy credits which are beginning to go sour. The next crisis is already beginning in the $62 TRILLION market for Credit Default Swaps. You never heard of them? It's time to take a look, then. Read full article... Read full article...
Friday, June 06, 2008
Downgrades of Monoline Bond Insurers AMBAC and MBIA- The Story No One is Talking About / Interest-Rates / Credit Crisis 2008
By: Andy_Sutton
Shortly after a 200+ point rally yesterday in the Dow Jones Industrial Average we had some big news. REALLY big news. Had this happened a few months ago when everyone was talking about the mere possibility, we'd likely have seen a 4 digit Dow because of it. It is likely that by the time this article reaches inboxes, websites, and blogs around the globe the story will have broken. However, as of market open, Financial Times is the only major site I've found carrying a headline. There are bits and pieces elsewhere, but they are largely buried in small backpage articles. I was lucky enough to see the blurb in the company news of AMBAC only because the stock is on one of my watch lists. Read full article... Read full article...
Thursday, June 05, 2008
Fed Governors Openly Question Ben Bernanke's Competence / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Open dissent at the Fed continues. I first talked about this a week ago in Infighting At The Fed . Today Lacker Says Fed Loans to Wall Street Risk More Crises . Richmond Federal Reserve Bank President Jeffrey Lacker said the lending to securities firms that the central bank introduced in March may lay the seeds of further financial crises.Read full article... Read full article...
Thursday, June 05, 2008
UK Interest Rate to be Kept on Hold at 5% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England Monetary Policy Committee is expected to keep interest rates on hold at 5% at today's meeting. UK inflation hit the Bank of England's upper boundary of 3% CPI in April 08, therefore ruling out the possibility of a further rate cut despite a sharp slow down in economic activity with UK growth on target to hit the Market Oracle forecast of 1.3% for 2008.Read full article... Read full article...
Monday, June 02, 2008
Inflation Sends US Treasuries Sharply Lower / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market sold off sharply last week. Ongoing weakness on the economic front is taking a back seat to other issues as the 10 year yield broke through the significant 4% barrier. The inflation chatter we discussed last week continued to stay front and center not only in the US but across the globe also as energy prices remained sky high. A key event last week was the poor interest in the Treasury Note auctions that were conducted on Wednesday and Thursday. Both the 2 Year and the 5 Year auctions were met with lousy domestic interest and more importantly a significantly diminished foreign Central Bank sponsorship.Read full article... Read full article...
Wednesday, May 28, 2008
Fed Lending Facility Opens Rift Over Risk Taking Limits / Interest-Rates / Government Intervention
By: Mike_Shedlock
In mid-September the Fed is placing new restrictions on the Primary Dealer Credit Facility, a swap-o-rama with broker dealers as opposed to banks.The Financial Times picks up the story in Investment banks split over Fed loan facility .
Investment banks such as Goldman Sachs (GS) that have been less affected by the credit crisis are said to be leaning against accepting any significant new limits by the Fed, while those that have been somewhat more affected, such as Lehman Brothers, are seen as more eager to maintain access to the Fed facility even if it means new limits on risk-taking.
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Wednesday, May 28, 2008
Surging Inflation Ensures US Interest Rates Headed Higher / Interest-Rates / US Interest Rates
By: Martin_Hutchinson
The inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.
The minutes of the last policymaking Federal Open Market Committee (FOMC) meeting, released on Wednesday, showed that the Fed's inflation forecast was raised from a range of 2.1%-2.4% to a range of 3.1%-3.4%.
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Monday, May 26, 2008
Bleak Economic Outlook Positive for Bond Yields / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market was essentially unchanged last week. As discussed in last week's edition, ongoing weakness in the real economy and renewed turmoil in the stock market are providing solid support for bonds. The event that got the most visible market reaction last week was the release of the FOMC meeting minutes. The Fed reduced economic growth forecasts for 2008 by about 1% from 1.7 to 0.7%. They kept dreaming about 2.5% growth in 2009. As previously mentioned the market does not yet believe that sluggish or no growth will persist, so the Fed downgrade came as a surprise and severely dampened enthusiasm for the stock market while boosting the appeal of Treasury bonds. Our readers who bought bonds and sold stocks on our recommendation from 2 weeks ago were feeling pretty warm and fuzzy. That trade has a bit more upside left, so do not abandon that ship just as yet.Read full article... Read full article...
Friday, May 23, 2008
Cash for Crap- Fed Strategy of How to Fix Everything / Interest-Rates / Government Intervention
By: Adrian_Ash
United States Senate, 23 May 2008
Findings of the Committee on Homeland Security & Governmental Affairs "Trading Commodities – a Very Bad Thing"
AFTER DOZING OFF through the expert testimony of five young visitors from the financial and farming communities this week, the Senate Committee on Homeland Security & Anything Else That Takes Our Fancy was today persuaded by the opinions it had already formed in the cab on the way over.
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Thursday, May 22, 2008
Immoral Hazard- Incompetence at the Fed / Interest-Rates / Government Intervention
By: Stephen_Lendman
So says Jeremy Grantham, co-founder of Boston-based investment firm Grantham, Mayo and Van Otterloo, now known as GMO. Some call him the philosopher king of Wall Street because of his highly insightful views on markets and the economy, usually with a longer-term perspective. In a profession of touts, fast-buck and scam artists, Grantham's commentaries are notably refreshing. They're detailed, scholarly, sober, clear and especially important at a time of unparalleled excesses, great economic uncertainty, voices ranging from gloom and doom to blue skies and all clear ahead, so who knows what to believe. Few people sort things out better than he, and whether right or wrong, he makes consummate sense and should be taken seriously. He calls his latest commentary "Immoral Hazard" and takes straight aim at the perpetrators. It's not the first time, and with good reason. Bad policy yields bad results with former Fed Chairman Greenspan Exhibit A.
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Thursday, May 22, 2008
US Treasury Bonds Fast Becoming Certificates of Confiscation / Interest-Rates / Inflation
By: Adrian_Ash
THE PRICE OF GOLD BULLION slipped $10 from a new five-week high in London early Thursday, pulling back to $925 per ounce as crude oil broke new record highs and the US Dollar fell yet again on the forex market." Gold has rallied over 8% in the last five days and is now trading over $80 higher than May's low," notes Mitsui, the precious metals dealer, in London today.
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Wednesday, May 21, 2008
Bond Market Price Falls Signaling Inflation and Rate Rises Despite Recession / Interest-Rates / US Bonds
By: Paul_J_Nolte
Energy and food prices continue to rise – even though the consumer price index reflects a “quiet” inflation picture. Housing remains soft, especially single-family home, which showed a decline in the last report – along with lower home prices. The 10-year bond is pushing 4% for the first time this year. Yet stocks continue their trek higher – stopping a couple of times at the 13,000 mark on the Dow (other indexes have cleared recent peaks). With another round of mortgage resets lurking in the future, could the markets be whistling past the proverbial graveyard? The drumbeat of capital-raising by banks continues, yet many are commenting that we are now past the worst in the financial crisis. Read full article... Read full article...
Monday, May 19, 2008
Yield Curve Widening Positive for Long-end Treasury Bonds / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market was somewhat weaker last week. In spite of mostly supportive fundamental news such as lower than expected inflation data (in the form of the CPI) and new 28 year lows on Consumer Confidence, the bond market appears to be stuck in the mud here. The US Long Bond future has traded in a narrow 3 point range for the better part of the past month and it closed the week pretty much dead smack in the middle of that range. There are a few things lining up that indicate odds are tilting more and more toward higher prices and lower yields going forward. Even if the market continues to trade sideways, it makes some sense to increase exposure to longer maturity product to earn the higher relative yields available in that sector of the bond market. When the stock market runs out of steam on this bounce, it should help bonds trade to higher levels. Read full article... Read full article...
Friday, May 16, 2008
Want To Fix the Fed? Get Rid of It / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Inquiring minds have been pondering Volcker's latest statements regarding stagflation, the CPI, regulation of banks, and even the need for an administrator to watch over the Fed.Let's see where Volcker is right and wrong with his analysis of the current economic situation and what to do about it.
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Tuesday, May 13, 2008
LIBOR Interbank Rate Credibility In Doubt / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Bloomberg is reporting Libor Poised for Shake-Up as Credibility Is Doubted .
The benchmark interest rate for $62 trillion of credit derivatives and mortgages for 6 million U.S. homeowners faces its biggest shakeup in a decade as lawmakers question if banks are understating borrowing costs.
For the first time since 1998, the British Bankers' Association is considering changing the way it sets the London interbank offered rate, according to Chief Executive Officer Angela Knight, who appeared before a parliamentary committee in London today. ``We've put Libor under review,'' Knight said in an interview yesterday. The BBA will announce changes May 30, she said.
Monday, May 12, 2008
Bleak Economic Outlook Remains Positive for Treasury Bonds / Interest-Rates / Articles
By: Levente_Mady
The Treasury market improved once the 10 year auction was out of the way on Wednesday of last week. There were a couple of news items that I considered to be of high importance last week. First, the news in the financial sector is not only getting worse but the time horizons on the bad news are also extending. The list of illustrious institutions that recently reported worse than expected data included UBS, Fannie Mae, AIG, Citigroup. The Citigroup news was the one that I would consider most significant. Read full article... Read full article...
Friday, May 09, 2008
Socialization of the G7 Banking System and Food Crisis Horror Story / Interest-Rates / Credit Crisis 2008
By: Ty_Andros
In today's missive we are going to cover the creeping socialization of the G7 banking system and the second act of the horror show known as biofuels. Slowly but surely, the central banks of the G7 are taking over the short term funding needs of the money center and investment banking industries. The march is set to accelerate as the income streams dive as outlined in the Tedbits 2008 Outlook (Wolf Wave at www.TraderView.com ).
In the second piece we will be covering the unfolding debacle known as biofuels versus food, and the impacts about to unfold in the grain markets. They are set to be quite dramatic. There is no escape from the math. The food price and availability crisis is about to get a whole lot worse .
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Thursday, May 08, 2008
UK Interest Rates Kept on Hold at 5% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
In a widely expected move, the Bank of England's MPC meeting kept UK interest rates on hold at 5% following Aprils cut to 5% from 5.25%.
The growing weakness in the UK economy as a consequence of the deepening credit crisis ensures that the Bank of England will continue cutting UK interest rates throughout the year, despite the rise in inflation CPI 2.5%, RPI 3.8%.
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Monday, May 05, 2008
US Bond Market Outlook- Treasuries Cheap Relative to Stocks / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market was pretty much flat last week. The Fed dutifully lowered rates by 25 basis points to 2% as the market expected on Wednesday. The brave men on the FOMC actually came up short on declaring a neutral bias, but the markets pretended that they were close enough to act as if the financial crisis was just about over. We got the seasonal pressure that we were looking for in bonds again this year. Read full article... Read full article...