Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, July 02, 2014
Rising Interest Rates... Falling Bonds / Interest-Rates / US Bonds
By: Anthony_Cherniawski
TNX took off like a bottle rocket for a second day, overcoming its 50-day Moving Average at 25.87 and mid-Cycle support/resistance at 25.92. It should complete Minor Wave 1 of (3) near the hourly Cycle Top at 26.73.
This is Primary Cycle action and it may not be over until July 25 to July 29.
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Wednesday, July 02, 2014
Planning for Future Interest Rate Hikes: What Can History Tell Us that the Fed Won’t? / Interest-Rates / US Interest Rates
By: F_F_Wiley
It stands to reason that when the Fed eventually lifts interest rates, we’ll see the usual effects. After a sustained rise in rates, you can safely bet on:
- Fixed investment and business earnings dropping sharply
- GDP growth following investment and earnings lower
- Many people losing their jobs
- Risky assets performing poorly
Tuesday, July 01, 2014
Debt Makes You Dumb - American's Borrowing Just To Get By / Interest-Rates / US Debt
By: John_Rubino
As incomes stagnate and prices rise, a growing number of Americans face a tough choice: either descend a couple of rungs on the lifestyle ladder or borrow to keep it together. Many are apparently choosing door number two. From MarketWatch:
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Tuesday, July 01, 2014
Lowest Interest Rates in 500 Years, Oil Shortages in 10 Years / Interest-Rates / Financial Markets 2014
By: Raul_I_Meijer
We all know that interest rates are at an ultra low level, whether it’s the rate on our savings accounts, our mortgages (though those are quite a bit higher, quelle surprise), central bank rates or yields on government bonds. All this, plus a watershed of global QEs, have led to stock exchanges at highs that have nothing at all to do anymore with the performance of the real economies they’re supposed to represent – and historically did.
Tuesday, June 24, 2014
QE And CDS Are Weapons Of Mass Deception / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
The age of financial innnovations found such an exalted high priest in Alan Greenspan that in his days as Fed governor he couldn’t stop talking about the dangers of regulating them, even though that was in his job description, and even though he had far too little detailed knowledge of them. His sidekicks over at the Treasury, Bob Rubin and Larry Summers, made sure their friends at Citi and JPMorgan had nothing to fear from the US government in this regard either, just as Glass-Steagall was repealed.
Tuesday, June 24, 2014
Europe’s Mario Draghi Now Starring in Bernanke’s Show / Interest-Rates / ECB Interest Rates
By: MISES
Brendan Brown writes: Just as Professor Bernanke exits center stage at the end of Act I of the monetary comedy he created, the scene shifts to Frankfurt. The star of Act II is European Central Bank (ECB) chief Mario Draghi. As we pick up the story, Mr. Draghi has been launching a defense against a phantom threat of deflation.
Monday, June 23, 2014
The Fed’s Stealth Tightening / Interest-Rates / US Interest Rates
By: Casey_Research
By Bud Conrad, Chief Economist
As expected, the Fed tapered its purchases of mortgage-backed securities on Wednesday to $15 billion per month and its purchases of longer-term Treasury securities to $20 billion per month.
That means total monthly purchases, which were $85 billion last year, are now down to $35 billion. That’s a significant cut.
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Monday, June 23, 2014
The Bond Market Trap / Interest-Rates / US Bonds
By: Peter_Schiff
The American financial establishment has an incredible ability to celebrate the inconsequential while ignoring the vital. Last week, while the Wall Street Journal pondered how the Fed may set interest rates three to four years in the future (an exercise that David Stockman rightly compared to debating how many angels could dance on the head of a pin), the media almost completely ignored one of the most chilling pieces of financial news that I have ever seen. According to a small story in the Financial Times, some Fed officials would like to require retail owners of bond mutual funds to pay an "exit fee" to liquidate their positions. Come again? That such a policy would even be considered tells us much about the current fragility of our bond market and the collective insanity of layers of unnecessary regulation.
Friday, June 20, 2014
U.S. Fed Musical Chairs at the FOMC / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
“You can’t tell the players without a program. Get your program here!” yelled the stadium vendors of my youth. In today’s Outside the Box I bring you an excellent piece of Fed watching by Nouriel Roubini and colleagues, a “program” of the new Fed members and where they rank on the hawk-dove scale. They point out that, with a new chairperson (Janet Yellen) and vice-chair (Stanley Fischer), and with higher than normal turnover on the Federal Open Market Committee (FOMC) – over the past year, 75% of the FOMC’s membership has changed – the Fed’s need for clear communications with regard to monetary policy and forward guidance is greater than ever.
Thursday, June 19, 2014
The Euro Goes Negative - Sovereign Debt Bubble Is a Bigger Issue / Interest-Rates / ECB Interest Rates
By: Peter_Schiff
Dickson Buchanan writes: The European Central Bank's (ECB) decision to charge a negative interest on overnight deposits is not going to lead to a higher targeted inflation rate, despite ECB President Mario Draghi's insistence that it will. Like all cases of central planning, this decision will have unintended and costly consequences - some of which are already starting to play out. In this particular case, instead of stimulating business lending or higher prices, the decision will only stimulate the increased buying of insolvent government debt - leading us all one step closer to the economy's eventual unravelling.
Thursday, June 19, 2014
Draghi Hits Savers To Salvage Faux Economic Recovery / Interest-Rates / ECB Interest Rates
By: John_Browne
On June 5th, Mario Draghi, President of the European Central Bank (ECB), announced a package of measures, including a policy of negative interest rates, aimed at encouraging or even forcing Eurozone banks to increase their lending to businesses.Although previously imposed by Swiss banks on their depositors, this will be the first time that a central bank has charged negative interest rates. The package also contained a reduction in Base Rate, a further major new Long Term Refinancing Operation (LTRO), a reaffirmation of 'Forward Guidance' to indicate low interest rates for the foreseeable future, and hints that the ECB might in future engage in Bernanke-style Quantitative Easing (QE).
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Thursday, June 19, 2014
Five Reasons For Some FED Action / Interest-Rates / Quantitative Easing
By: Submissions
Sant Manukyan writes:
QE-1? Have to admit it did work pretty well. Unlocked the credit markets, gave a boost to the asset prices and more importantly pushed the rates even lower. QE-2? Depends, but if the intention was to keep the long rates down yes it did work. QE-3? I don’t think it really did work. Not only QE is not “printing money” and “reserves can not be lend” it is not intended to create inflation as well. And before the next recession strikes, been 5 years since the end of the Great Recession, the FED better lock some of it’s tools up into the tool box so that it can them out later. Any reason for tightening? Sure, here they are:
Tuesday, June 17, 2014
Why Negative Interest Rates Are Only the First Step / Interest-Rates / Central Banks
By: Casey_Research
By Jeff Thomas, International Man
In 1946, an American singer, Merle Travis, recorded a song called "Sixteen Tons." The song told the story of a poor coal miner in Kentucky, who lived in a small coal mining town. The town's economy revolved entirely around the mine.
The mining company owned a "company store," which had a monopoly on the sale of provisions. It charged rates that were designed to use up the weekly paycheque of the miner, so that the miner, in effect, was a slave to the mining company. As the song states,
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Monday, June 16, 2014
Bond Market Kings to be Dethroned in Second Half of 2014 / Interest-Rates / US Bonds
By: EconMatters
Jeffrey Gundlach`s Outlook
Jeffrey Gundlach of DoubleLine Capital LP says the 10-year U.S. Treasury note will likely trade in a range between 2.20 and 2.80 percent during the second half of year. Gundlach also said U.S. Treasuries are a buy for investors as they are yielding in the upper half of his projected trading range. He said this on June 10th of 2014 and it seems he still expects the 10-year yield to be lower than the 2.40% bottom put in about 3 weeks and 20 basis points ago.
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Wednesday, June 11, 2014
The European Central Bank’s House of Cards / Interest-Rates / ECB Interest Rates
By: Frank_Hollenbeck
The European Central Bank (ECB) recently imposed negative deposit rates and is preparing a form of quantitative easing (QE) to purchase asset backed securities, corporate bonds or possibly bailout bonds. This policy may seem surprising. Why would the ECB want to try to force banks into making bad loans, or consider implementing a policy of quantitative easing that has clearly been a total failure (with obvious unintended consequences) in both the USA and Japan? The answer lies elsewhere. Under the guise of avoiding deflation or “low-flation,” the ECB is, in reality, panicking and trying to save itself from the executioner’s axe. Of course, the European banking sector and its bought-and-paid-for journalists unanimously support this prospect of continued theft through debasement. They are giddy at the prospects of higher asset prices and higher banker incomes, unjustified by fundamentals, and the implied massive transfer of income and wealth from the have-nots to the haves.
Wednesday, June 11, 2014
Europe's Unprecedented Rate-Slashing Gives Us a Classic Profit Play / Interest-Rates / ECB Interest Rates
By: Money_Morning
Peter Krauth writes: European Central Bank President Mario Draghi is desperate.
The European Union has been plagued with years of falling inflation and stubbornly high unemployment.
And now its central bank is attempting to employ "unconventional" policies to kick-start the economy.
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Tuesday, June 10, 2014
European Central Bank Goes Sub Zero / Interest-Rates / ECB Interest Rates
By: Mike_Whitney
On Thursday, European Central Bank chief Mario Draghi dropped rates on overnight deposits to minus 0.1% thereby charging commercial banks to keep their money at the ECB. The move, which was applauded by the media as a “historic measure to fight deflation”, is nothing of the kind. Negative rates have been used in both Sweden and Denmark in recent years, but to little effect. The policy will not “get the banks lending again” as the ECB suggests, nor will it ease the high unemployment and slow growth that have plagued the Eurozone for the last six years. In truth, the rate change will have no impact at all. It’s merely public relations stunt designed to create the impression that the ECB is aggressively addressing the crisis for which it is largely responsible. Here’s how the World Socialist Web Site summed it up:
Tuesday, June 10, 2014
Euro-zone Bond Market Madness as Spanish 10-Year Bond Yield Lowest Since at Least 1789 / Interest-Rates / Euro-Zone
By: Mike_Shedlock
Those searching for absurdity in government bonds can find it in a multitude of places.
For example, and via translation from Libre Mercado (courtesy of my friend Bran who lives in Spain) please note Spanish 10-Year Bond Yield is Lowest Since at Least 1789.
Monday, June 09, 2014
Germany Says Draghi Is A New Bismark And Dangerous / Interest-Rates / ECB Interest Rates
By: Andrew_McKillop
Mario Draghi's Historic Decision
By pushing down the ECB's overnight rate on forced deposits to it, from the Eurozone's private banks to minus 0.1% per year, and holding the ECB's key lending rate to banks and financial establishments in the Eurozone at 0.15% per year, Draghi made a so-called historic decision. Announcing the moves last week, Draghi used several powerful images and allusions. For example Japan's lost decade, but he means 3 lost decades – and staying with Japan, he could have mentioned that BOJ lending rates in Japan have been held below 2% for 30 years. Did that stimulate the Japanese economy?
Sunday, June 08, 2014
European Central Bank Cuts Interest Rate Below Zero / Interest-Rates / ECB Interest Rates
By: Global_Research
Stefan Steinberg writes: The European Central Bank (ECB) slashed one of its interest rates to negative territory and unveiled a €400bn loan package for Europe’s banks in response to the ongoing economic slump and the threat of deflation.
At its meeting in Frankfurt Thursday, the central bank cut its main lending rate to 0.15 percent from its current historic low of 0.25 percent, and its overnight deposit rate from zero to minus 0.10 percent, becoming the largest central bank to lower rates to below zero.