Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, November 21, 2014
30 Year Bond Bull Market - I Had My Cake, Until I Ate It / Interest-Rates / International Bond Market
By: John_Mauldin
After 30 years of declining interest rates, bond investors are beginning to worry that rates will go higher—especially after the events of May 2013.
Back then, 10-year yields went from 2% to 3% on a frozen rope. Things got very dicey in fixed income. Some holders of corporate bonds (like the new Apple bond) were suddenly down 10% just on interest rates alone.
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Wednesday, November 19, 2014
Global Irrational Exuberance Enters a New Phase / Interest-Rates / Quantitative Easing
By: MISES
Brendan Brown writes: The present global plague of asset price inflation — with its origins in Federal Reserve quantitative easing policies and featuring much irrational exuberance — is transitioning into a new phase. Some optimistic commentators suggest a benign and painless end to the plague lies ahead. They cite the skill of the Federal Reserve in “ending QE.” These optimists even suggest that meanwhile, controlled injections of new viruses of asset price inflation by the Japanese and European central banks could have a good outcome, and this justifies the risks of the procedure. None of this optimism is justified by the evidence, nor by the known pathology of asset price inflation.
Wednesday, November 19, 2014
What Blows Up First? Part 5: Shale Oil Junk Bonds / Interest-Rates / International Bond Market
By: John_Rubino
One of the surest signs that a bubble is about to burst is junk bonds behaving like respectable paper. That is, their yields drop to mid-single digits, they start appearing with liberal loan covenants that display a high degree of trust in the issuer, and they start reporting really low default rates that lead the gullible to view them as “safe”. So everyone from pension funds to retirees start loading up in the expectation of banking an extra few points of yield with minimal risk.
Saturday, November 15, 2014
No U.S. Interest Rate Hike in 2015? / Interest-Rates / US Interest Rates
By: DailyWealth
Dr. Steve Sjuggerud writes: Everyone expects higher interest rates in 2015... Everyone, that is, except Jim Rickards.
Jim Rickards is an original thinker...
I've already shared with you in DailyWealth Jim's brilliant but out-of-the-mainstream view that DEFLATION – not inflation – is the financial storm that nobody is expecting. (I urge you to go back and read the DailyWealth I wrote about that, right here.)
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Friday, November 14, 2014
Stealth QE4 - Operation Tokyo Twist as Japan Sacrifices Pensions Funds / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
Simply put, QE can never be halted or even slowed. The USFed is in a corner, with no policy options, facing collapse, with no ability whatsoever to halt the systemic failure in progress. It can only rely on hidden machinery and profound lies, against a background of constant economic propaganda. The central bank franchise system wrapped around the fiat paper currency regime has failed. They cannot stop it, not even with endless bond fraud and endless war, the new twin towers of the fascist state legacy. The entire financial structures have become fully dependent on easy money and debt financed by a printing press, buttressed by derivative machinery. The Uncle Sam bearing the USDollar emblem is like a pathetic heroin addict brandishing a modern howitzer. The USDollar is fast losing its integrity, during a dangerous global rejection episode. Therefore, QE must be exported, the easy candidate Japan. Call it Operation Tokyo Twist.
Monday, November 10, 2014
Yellen Hands Off Money Printing Press to Japan / Interest-Rates / Quantitative Easing
By: Michael_Pento
There is a saying: "The rich just keep getting richer". And by all accounts, since the 2008 financial crisis, they have. Unfortunately, for the struggling poor and middle class, wealthy asset holders have been the only beneficiary of six years of Federal Reserve easy-money policies. Under the tutelage of Ben Bernanke, the Fed introduced QE in March of 2009 with the hope it would save the economy from economic collapse. The goal was to create a new vibrant market for borrowing to replace the former vibrant market for borrowing that had just blown up, taking the economy with it. I am sure Ben Bernanke began this ruse with good intentions and the misplaced belief that real economic prosperity could be manufactured from creating new money.
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Saturday, November 08, 2014
Debt on Wheels - Subprime Loans and Auto Sales / Interest-Rates / US Debt
By: Mike_Whitney
Soaring auto sales are not so much a sign of a strong economy as they are an indication of financial hanky-panky. We saw this same type of fakery play out in housing between 2004 – 2006, when prices went through the roof due to a mortgage-lending scam (“subprime”) that crashed the stock market and sent the economy reeling. Now the bigtime money guys are at it again, writing up auto loans for anyone who can sit upright in a chair and scribble an “X” on the dotted line. As a result, car sales have surged to over 16 million for the last 6 months. (A full 7 million more than the low point in January, 2009.) And it’s not hard to see why either. The finance gurus are packaging these sketchy subprimes into bonds, offloading them on eager investors, and recycling the profits into more crappy loans. It’s a perfect circle and it won’t end until the loans start blowing up, jittery investors head for the exits, and Uncle Sugar rides to the rescue with more bailouts.Read full article... Read full article...
Thursday, November 06, 2014
The End of QE Is Not the End of Bad Policy / Interest-Rates / Money Supply
By: MISES
John P. Cochran writes:
Recently the financial press and media has been abuzz as the Federal Reserve moved closer to the anticipated end to its massive bond and mortgage backed securities purchases known as quantitative easing. James Bullard, President of the St. Louis Federal Reserve Bank, stirred controversy last week when he suggested the Fed should consider continuing the bond buying program after October. But at the October 29th meeting, the policy makers did as anticipated and “agreed to end its asset purchase program.” However one voting member agreed with Mr. Bullard. Per the official press release, “Voting against the action was Narayana Kocherlakota, who believed that, in light of continued sluggishness in the inflation outlook and the recent slide in market-based measures of longer-term inflation expectations, the Committee should commit to keeping the current target range for the federal funds rate at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset purchase program at its current level” (emphasis added).
Wednesday, November 05, 2014
Japan Rhyme and Reason / Interest-Rates / Central Banks
By: John_Mauldin
“The significant problems that we have created cannot be solved at the level of thinking we were at when we created them.”
– Albert Einstein
“Generals are notorious for their tendency to ‘fight the last war’ – by using the strategies and tactics of the past to achieve victory in the present. Indeed, we all do this to some extent. Life's lessons are hard won, and we like to apply them – even when they don't apply. Sadly enough, fighting the last war is often a losing proposition. Conditions change. Objectives change. Strategies change. And you must change. If you don't, you lose.”
– Dr. G. Terry Madonna and Dr. Michael Young
Tuesday, November 04, 2014
Marc Faber Warns Japan's Bond-Buying Program is a Ponzi Scheme / Interest-Rates / Quantitative Easing
By: Bloomberg
Marc Faber, editor and publisher of "The Gloom, Boom & Doom Report", spoke with Bloomberg TV's Trish Regan today. He commented on Bill Gross' remarks about deflation and explained why he thinks Japan is engaged in a Ponzi Scheme. He also spoke on oil prices and the midterm elections.
Faber said that Japan is "engaged in a Ponzi scheme in the sense that all the government bonds that the Treasury issues are being bought by the Bank of Japan."
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Sunday, November 02, 2014
For Whom Are Japanese Leaders Kuroda and Abe Making Their Monetary and Fiscal Policy? / Interest-Rates / Japan Economy
By: Jesse
The expansion of the BOJ asset purchase program was timed to start with the end of the Fed's asset purchase program. I mean, come on. Could it have been any more obvious?
Saturday, November 01, 2014
Japan QE As Morphine For A Terminal Patient / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
You can jot down Halloween 2014 in your calendar, and it’s unfortunately too tragic to make proper use of the irony involved, as the day Japan committed suicide. The sun is no longer rising. Not that the vital signs weren’t bad before, indeed it might not have survived regardless, but this lethal blow announced today is still quite the statement.
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Friday, October 31, 2014
QE Is Dead, Now You Tell Me What You Know / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
It seems like every blue moon or so I need to return to Groucho’s definition of chaos theory, it keeps on popping up. The first time I used it in an article goes back to at least May 2009, incidentally for many people the starting date of the financial crisis in their part of the world. This time around, it’s there because it’s what a lot of people in the financial markets must be feeling. And I mean ‘must’ in the sense of ‘should’ be feeling, though I don’t think they are. Yet.
Thursday, October 30, 2014
Everything The Fed Does Is Scripted / Interest-Rates / US Federal Reserve Bank
By: Raul_I_Meijer
Janet Yellen today solemnly stated that the Fed has killed QE because the jobs outlook has improved. These are the guys and gals who have more and better access to more and better data than any of us have. And we all know that the sole reason the BLS unemployment rate has fallen is that 90-odd million working age Americans are no longer counted as part of the work force, and a huge part of those who are still employed moved to worse-paying jobs and/or had their pay and/or benefits cut.
Tuesday, October 28, 2014
When Will Central Bank Morons Ever Learn? asks Albert Edwards at Societe General / Interest-Rates / Central Banks
By: Mike_Shedlock
Central Banks and the Business Cycle
I like it when someone besides a few financial bloggers takes the gloves off and starts asking some hard-hitting questions.
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Friday, October 24, 2014
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
The Quantitative Easing initiatives have been declared as stimulus and successful in sustaining the US financial system. While having been able to continue the debt floats, the many market props, providing coverage for USGovt debt securities and mortgage backed securities which nobody wants, the initiative is hardly stimulus. The hyper monetary inflation does what we always learned it did, as in from school for 50 years, dole out its powerful corrosive effect. The inflation lifts the cost structure, leads to elimination of profit margins, and forces businesses to shut down, thus taking equipment out of service. The Jackass prefers to call the QE effect as killing capital, forcing retired capital, putting equipment on mothballs, often liquidated. Neither the USFed nor the Wall Street partners ever refer to the capital destruction effect, because it contradicts their stimulus argument and false message. Theirs is pure propaganda in keeping with the urgent directive to save the banks that are too big to fail. These are the financial crime centers of America.
Thursday, October 23, 2014
What Debt Deleveraging? / Interest-Rates / US Debt
By: Harry_Dent
The best way to delever is to immediately pay off any existing debt, right? So, how can the global economy do that?
There’s a great new study out from Geneva Reports on the World Economy 16 (ICMB — International Center for Monetary and Banking Studies) called Deleveraging? What Deleveraging?
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Wednesday, October 22, 2014
The Flat Debt Society / Interest-Rates / US Debt
By: John_Mauldin
International Monetary Fund chief Christine Lagarde says the global economy is facing “the risk of a new mediocre, where growth is low and uneven.”… Lagarde said Europe's 18-nation bloc that uses the euro currency – collectively the world's biggest economy – is facing the "not insignificant" risk of falling back into a recession. (VOA News)
Monday, October 20, 2014
Do We Need a Lender of Last Resort? / Interest-Rates / Central Banks
By: MISES
Nicolás Cachanosky writes: Scotland’s vote for independence resulted in a negative. There won’t be, for now, further discussions about what Scotland should do with its monetary institutions. Still, there is one more issue that I would like to discuss, because it transcends the particular case of Scotland, had independence been the result of the vote.
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Monday, October 20, 2014
A Funny Thing Happened on The Way to Raising Rates / Interest-Rates / US Interest Rates
By: Michael_Pento
It wasn't too long ago that the stock market was busy celebrating a "great" September jobs report. There were 248k net new jobs created and the unemployment rate dropped to 5.9 percent. Janet Yellen, Ben Bernanke and the rest of Washington D.C.'s central planners deemed it a great time to take a Keynesian victory lap, basking in the delusion that they now have proved you actually can print and borrow your way to prosperity.
And, because of their success, the Fed would be able to raise interest rates without any damage to the economy.
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