Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, December 20, 2013
Ben Bernanke Tapers, Tinkers and then Leaves / Interest-Rates / Quantitative Easing
By: Ashraf_Laidi
Fed Chairman Bernanke tapers by $10 bln, tinkers with forward guidance and leaves Janet Yellen with the possibility of an inflation target.
By reducing monthly purchases of agency mortgage-backed securities and long term treasuries by $10 bn, the Federal Reserve has successfully integrated the price stability component of its dual Forward Guidance into traders' psyche by further delinking tapering of asset purchases from tightening conditions in the bond market.
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Tuesday, December 17, 2013
Burning Money at the Rate of $113 Billion a Month; How Can They Stop Printing? / Interest-Rates / Quantitative Easing
By: Profit_Confidential
Michael Lombardi writes:
In the month of November, the U.S. government registered a budget deficit of $135 billion. Over the course of the month, it spent $318 billion and only took in $182 billion. So far for the fiscal year 2014, which began in October, the U.S. government has registered a budget deficit of $227 billion; that’s an average of $113.5 billion a month so far this fiscal year. (Source: Department of the Treasury; Bureau of Fiscal Service, December 11, 2013.)
Monday, December 16, 2013
Bernanke Seeing the Difference Between QE Tapering and Tightening / Interest-Rates / Quantitative Easing
By: Matt_Machaj
On November 19th at National Economists Club Annual Dinner Bernanke gave a speech which could be seen as a sort of testimony or farewell (probably one of many coming soon). The message he has sent was in perfect compliance with what was being communicating to the public. Firstly he offered a “forward guidance”, which was to reassure us that low short term interest rates are here to stay for the longer term. The possible boundary line, as we repeatedly heard, is lower unemployment and/or significantly higher inflation rate. Until then we are still in the ZIRP – zero interest rate policy – scenario.
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Thursday, December 12, 2013
Taper Quantitative Easing Interest Rates Derivatives Reality Check / Interest-Rates / Quantitative Easing
By: Dan_Amerman
The potential "tapering" of quantitative easing can be likened to a lessening of chemotherapy treatments when a cancer patient's symptoms change. It means one thing if the patient is being cured. It means something quite radically different when there has not been a cure, and the underlying cancer remains as bad as ever.
We are told that quantitative easing (QE), a.k.a. "cheap money", exists for the purpose of stimulating economic growth and corporate profits, and is thereby helping the United States and other nations that are struggling with persistent and deep-rooted economic and unemployment problems. If this were the whole truth, then QE is a temporary and technical fix, a mere "accommodative policy" that can be stepped down and then eliminated altogether once markets improve and economies no longer need assistance.
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Wednesday, December 11, 2013
Investors You’re Getting Robbed / Interest-Rates / Learn to Trade
By: Investment_U
Alexander Green writes: A Note From the Editorial Director: We received a question recently from a regular Investment U reader on a subject that comes up too often: The costs he’s paying his broker. He writes:
“I recently had a very frustrating conversation with my broker. I wanted to know how much I’m paying in fees and commissions to work with him. And I couldn’t get a straight answer! I still don’t have it sorted out. Is this a common experience? Should I fire him?”
Tuesday, December 10, 2013
10-Year U.S. Treasury Note Trades Near 6%; If Taper Is For Real / Interest-Rates / US Bonds
By: Michael_Pento
The most important question for investors at this time is to determine how high interest rates will rise; if indeed the Fed's artificial suppression of yields is truly about to end. To accomplish this we first must consider where yields last were outside of central bank debt monetization, a recession and the Eurozone debt crisis. Then, we need to factor in the increased risks to inflation and solvency, in order to arrive at an appropriate estimation for the level of interest rates during 2014.
Tuesday, December 10, 2013
Why What’s Happening in the U.S. Bond Market Now Is So Important to Stock Investors / Interest-Rates / US Bonds
By: InvestmentContrarian
George Leong writes: Taper or no taper? When? How much? These are the worries that are currently driving tensions in the stock market on a daily basis. As I wrote in a previous article, no one seems to care that corporate revenue growth is muted and consumers aren’t spending.
Last week, we saw jobs market data that helps support the Federal Reserve’s reasons to begin tapering its bond buying program.
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Sunday, December 08, 2013
How to Trade Markets Using Moving Averages / Interest-Rates / Learn to Trade
By: EWI
The moving average is a technical indicator which has stood the test of time. It's been 27 years since Robert Prechter described this vital tool in his famous essay, "What a Trader Really Needs to be Successful." What he said then remains true today:
A simple 10-day moving average of the daily advance-decline net, probably the first indicator a stock market technician learns, can be used as a trading tool, if objectively defined rules are created for its use.
What is a moving average? Here's how EWI's Jeffrey Kennedy puts it:
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Friday, December 06, 2013
How to Develop a Trading System From Novive to Profitable Investor / Interest-Rates / Trading Systems
By: Chris_Vermeulen
When it comes to becoming a successful investor or your, automated trading system development process for that matter, there are some big picture things that you must have figured out. Here are some tips that will help you get started in becoming a long term consistent and profitable trader, investor or automated trading system developer.
Wednesday, December 04, 2013
How to Get Higher Interest Rates on Safer Bonds / Interest-Rates / Corporate Bonds
By: Investment_U
Steve McDonald writes: The bond market is a difficult place to earn a livable income during times of very low interest rates. The only way to earn a decent yield is to take risks on lower-quality bonds or to accept much longer maturity curves than good sense dictates.
But if you know where to look, there’s a virtually unknown feature in some bonds that can significantly increase your current income and beat the biggest threat to your money in the current bond market, while offering the increased level of safety that bonds are known for.
Wednesday, December 04, 2013
When Saving Interest Rates Go Negative / Interest-Rates / US Interest Rates
By: BATR
What is more frightening, then the loss of your money. Since most people have, some meager amount held in some form of a financial institution, the prospect of the banksters' cabal placing a charge against your account for the mere privilege of maintaining a deposit, is horrible. The Business Insider warns, In The Future, You May Have To Pay The Bank To Hold Your Money, and raises a very dreadful prospect.
Tuesday, December 03, 2013
Is the Fed Increasingly Monetizing U.S.Government Debt? / Interest-Rates / US Federal Reserve Bank
By: Axel_Merk
Fed Chair Bernanke vehemently denies Fed “monetizes the debt,” but our research shows the Fed may be increasingly doing so. We explain why and what the implications may be for the dollar, gold and currencies.
What is debt monetization? A central bank is said to monetize a government’s debt if it helps to finance its deficit. The buying of Treasuries by the Federal Reserve is a clear indication that the Fed is doing just that, except that Bernanke argues the motivation behind Treasury purchases is to help the economy, not the government.
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Sunday, December 01, 2013
Why Traders Lose Money Trading Markets / Interest-Rates / Learn to Trade
By: Chris_Vermeulen
How to turn your trading into a simple automated trading strategy: you know the difference among a winning and losing trade – we have all experienced both and know the excitement and the frustration associated with it.
The brutal honest truth is a tough pill to swallow. The fact that most of the time it’s not the strategy that has failed; it’s you (the trader) which is why you need a simple trading strategy drawn out on paper with detailed rules for you to follow.
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Sunday, December 01, 2013
Janet Yellen, U.S. Interest Rates and Market Psychology at Major Market Turns / Interest-Rates / US Bonds
By: EWI
Janet Yellen just moved closer to her place in history when the Senate Banking Committee approved her nomination to lead the Federal Reserve. The full Senate is expected to confirm. If so, she will be the first chairwoman in the central bank's 100 year history.
But when her term concludes, gender may be secondary to the narrative about her time at the helm. The larger focus could be that Yellen was at the helm of economic disaster.
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Friday, November 29, 2013
How to Find Safe Yields in an Interest Rate Sensitive World / Interest-Rates / US Bonds
By: Don_Miller
While Mr. Bernanke's policies have taken a toll on seniors and savers, his mere mention of the word "taper" last spring did us all a favor. It sent interest rates rising, bond and stock prices tumbling, and in the days that followed, the Fed went into damage control—quite a lot of hubbub for something the Fed was only pondering. What happens when they announce they actually did something?
Monday, November 25, 2013
U.S. Money Supply Soars as Fed Eyes QE Taper / Interest-Rates / Quantitative Easing
By: Michael_Pento
The money supply as measured by M2 is now rising at a 12.1% annualized rate, which is causing the fickle Fed to renew its threats about ending QE. The minutes released from the latest FOMC meeting indicate the tapering of asset purchases could once again begin within the next few meetings.
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Wednesday, November 20, 2013
How to Profit from Fed’s Easy Money Mistake by Shorting U.S. Treasury Bonds / Interest-Rates / US Bonds
By: DailyGainsLetter
Mohammad Zulfiqar writes: The Federal Reserve has been very accommodative. Its goals are very simple: it wants economic growth in the U.S. economy. As a result, the Federal Reserve is taking extraordinary measures, printing $85.0 billion a month and using it to buy U.S. bonds and mortgage-backed securities (MBS). The hope is that the money will go to the banks, which will lend it to consumers who then spend it, leading to economic growth.
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Tuesday, November 19, 2013
A Requiem for the Bond Market / Interest-Rates / International Bond Market
By: Michael_Pento
The central banks of Japan and the U.S. are killing the private market for government debt. The massive and unprecedented bon-buying programs for Japanese Government Bonds (JGBs) and Treasuries have driven yields so low that investors are now simply stepping aside from involvement in that market entirely.
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Sunday, November 17, 2013
Code Red - The Unintended Consequences of ZIRP, Zero Interest Rates Policy / Interest-Rates / US Interest Rates
By: John_Mauldin
Yellen's coronation was this week. Art Cashin mused that it was a wonder some senator did not bring her a corsage: it was that type of confirmation hearing. There were a few interesting questions and answers, but by and large we heard what we already knew. And what we know is that monetary policy is going to be aggressively biased to the easy side for years, or at least that is the current plan. Far more revealing than the testimony we heard on Thursday were the two very important papers that were released last week by the two most senior and respected Federal Reserve staff economists. As Jan Hatzius at Goldman Sachs reasoned, it is not credible to believe that these papers and the thinking that went into them were not broadly approved by both Ben Bernanke and Janet Yellen.
Sunday, November 17, 2013
U.S. Treasury Bond Markets Snapshot Update / Interest-Rates / US Bonds
By: PhilStockWorld
Courtesy of Doug Short: What’s New: I’ve updated the charts below through today’s close. The yield on the 10-year note finished the week at 2.71%, which is 128 bps above its 1.43% all-time closing low on July 25th of last year but 13 bps below its interim closing high on September 5th.