Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, August 21, 2013
What Has QE Actually Accomplished? / Interest-Rates / Quantitative Easing
By: John_Mauldin
The market is obsessed with “tapering.” The assumption is that all the “juice” in the economy is somehow the product of the Federal Reserve's actions. The headline on the front page of the Wall Street Journal today reads “Fear of Fed Retreat Roils India.” I suppose one has to come up with some kind of reason to explain the convergence of emerging equity markets and those of the US. My friend Dan Greenhaus over at BTIG sent out this ugly graph (if you are an emerging-market investor) this morning:
Tuesday, August 20, 2013
QE Party is Ending, Rising Interest Rates Means the Fed Could Go Bankrupt / Interest-Rates / US Interest Rates
By: Graham_Summers
The QE party is ending. And the following hangover is going to be brutal.
Since 2007 the Central Bankers of the world have operated under the belief that they can hold the financial system together by engaging in round after round of Quantitative Easing (QE) without losing control of the bond markets/ interest rates.
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Tuesday, August 20, 2013
Rising Treasury Yields, Tight Money Has Already Started / Interest-Rates / US Interest Rates
By: Clif_Droke
Aside from the fact that the 10-Year Treasury Yield Index (TNX) is rising, one reason for the recent equity market sell-off is the uncertainty generated by the Fed's latest announcement concerning the future of QE3.
At its latest press conference, Fed Chairman Bernanke indicated the central bank could start winding down its $85 billion/month asset purchase program in September. This has understandably caused a certain amount of consternation on Wall Street, especially given the feeling among many traders that QE has been largely responsible for the stock market's rebound.
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Tuesday, August 20, 2013
Fed QE Taper Talk, Act 2 / Interest-Rates / Quantitative Easing
By: Axel_Merk
While the Fed’s taper talk has been tapered and then un-tapered, the market may now be tapering the Fed rather than vice versa. Let’s assess Act 2 of the taper talk and the implications for the markets, including the dollar and gold.
Monday, August 19, 2013
The Fed Can’t Afford to Taper QE / Interest-Rates / Quantitative Easing
By: John_Handbury
The Federal Reserve Bank’s balance sheet looked pretty healthy in May this year. On the asset side of the balance sheet is the large amount of paper that the Fed has bought to supposedly stimulate the economy. This consists mostly of treasury bonds and notes and mortgage-back securities of a value approaching $3 trillion.
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Friday, August 16, 2013
Is the U.S. 30 year Treasury Bond Market Top Finally In? / Interest-Rates / US Bonds
By: WavePatternTraders
After hitting my long awaited target, the reversal we have seen over the past 12 months strongly suggests a multi-decade top is now in for bonds.
Wednesday, August 14, 2013
U.S. Debt Nears a Tipping Point, Dire Economic Consequences / Interest-Rates / US Debt
By: Money_Morning
Garrett Baldwin writes: As U.S. debt as a percentage of GDP hovers at levels not seen since World War II, concerns are growing that the American economy is susceptible to a debt crisis in the near future.
Here's why people are worried: If interest rates return to normal levels of around 5% as the U.S debt approaches $20 trillion, then servicing that debt each year will cost taxpayers $1 trillion.
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Tuesday, August 13, 2013
How to Play the Coming Bond Market Crash / Interest-Rates / International Bond Market
By: Investment_U
Alexander Green writes: You know it’s coming. Every experienced investor who is paying attention knows it’s coming. I’m talking about the upending of bonds that will take place in the months and years ahead. However, there is a smart, low-risk way to play it… and earn a decent return.
Let’s start with the basics. Picture a seesaw with interest rates on one side and bond prices on the other. When interest rates go down, investment-grade corporates and Treasuries go up. When interest rates go up, these same bonds go down.
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Wednesday, August 07, 2013
Bank of England 0.5% Interest Rates for 7% Unemployment, to Result in 7% Inflation, Ongoing Savings Theft / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
"We won't even begin to think about raising interest rates until we see the unemployment rate go to 7%" - Mark Carney. With that the new Governor of the Bank of England did away with over 4 years of Mervyn Kings smoke and mirrors propaganda of temporary emergency low interests of just 0.5%, and money printing of £500 billion, the consequence of which is theft of purchasing power from savings and worker wages by means of high real inflation, transferring this stolen wealth to the bankrupt banking crime syndicate, and the government so that it can continue to maintain vested interest voting blocks, by bribing the electorate with debt and printed money that is not backed by any economic activity.
Wednesday, August 07, 2013
The Federal Reserve Relies on a Flawed Economic Model / Interest-Rates / Quantitative Easing
By: Casey_Research
By Lacy H. Hunt, Ph.D., Economist
In May 22 testimony to the Joint Economic Committee of Congress, Fed Chairman Ben Bernanke issued another of many similar positive interpretations of central bank policy. Yet again, he continued to argue that quantitative easing has decreased long-term interest rates and produced other benefits. He called economic growth "moderate," a term that he has often used without acknowledging that the Fed's forecasts have repeatedly been far above the mark. Within less than two months—or by the time of the July FOMC meeting—the Fed had downgraded the economic growth to "modest," tacitly acknowledging that program of open-ended $85 billion purchases of government and federal agency security purchases had failed to boost economic activity.
Wednesday, August 07, 2013
Debt, Income and Economy - Trying To Stay Sane In An Insane World / Interest-Rates / Global Debt Crisis 2013
By: James_Quinn
“I mean—hell, I been surprised how sane you guys all are. As near as I can tell you’re not any crazier than the average asshole on the street.” – R.P. McMurphy – One Flew Over the Cuckoo’s Nest
"Years ago, it meant something to be crazy. Now everyone's crazy." - Charles Manson
"In America, the criminally insane rule and the rest of us, or the vast majority of the rest of us, either do not care, do not know, or are distracted and properly brainwashed into acquiescence." - Kurt Nimmo
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Sunday, August 04, 2013
If You're Worried About Rising Interest Rates, Look at This Chart / Interest-Rates / US Interest Rates
By: DailyWealth
David Eifrig writes: "Don't fight the Fed."
You can hear that phrase on bond-trading desks throughout Wall Street. It's a warning to investors and traders. Don't try to outthink the central bank or anticipate its next moves...
Friday, August 02, 2013
Fed Says “No Way” to QE Tapering / Interest-Rates / Quantitative Easing
By: InvestmentContrarian
George Leong writes: At the Federal Reserve meeting this past Wednesday, Chairman Ben Bernanke confirmed the bond buying would continue as economic growth was only modest and jobs remain an issue.
In other words, the Federal Reserve is planning to keep the money-printing press in full operation.
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Friday, August 02, 2013
Detroit Bankruptcy Could Shake Muni Bonds to the Core / Interest-Rates / US Bonds
By: Money_Morning
Shah Gilani writes: Detroit went bankrupt, but so what?
Its own decades-long gross political mismanagement, corruption and incompetence pushed the city over the cliff into bankruptcy.
Why should we care?
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Thursday, August 01, 2013
FOMC Meeting See's Fed Backtrack on QE Taper Talk / Interest-Rates / Quantitative Easing
By: Money_Morning
Gary Gately writes: The Federal Open Market Committee (FOMC) meeting ended today (Wednesday) with word that the Fed plans to the stay the course on QE for now, backtracking from earlier hints it might begin tapering this fall.
"For all those looking for clear guidance on when quantitative easing will end, well, you will have to wait a little longer," Joel Naroff, president and chief economist at Naroff Economic Advisors Inc., wrote in a research note. "Indeed, there may have been some walking backwards today."
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Thursday, August 01, 2013
Bernanke’s Gift - Tempering the Taper Tantrum / Interest-Rates / Quantitative Easing
By: Michael_J_Kosares
WASHINGTON (MarketWatch) — The Federal Reserve on Wednesday slightly downgraded its economic outlook but gave no hint about its plans for its $85 billion-a-month asset purchase program. The statement released after a meeting of the Fed’s policy making committee said that the economy was expanding at a “modest” pace, a change from the “moderate” pace seen in June. The Fed also noted that the rise in mortgage rates was a concern. It also said that persistently low inflation was a risk. There was only one dissent, by Kansas City Fed President Esther George.
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Wednesday, July 31, 2013
Bernanke the Candyman as Detroit Declares Bankruptcy / Interest-Rates / Quantitative Easing
By: John_Mauldin
By Grant Williams
Who can take tomorrow
Dip it in a dream
Separate the sorrow
And collect up all the cream?
The candyman, the candyman can
The candyman can 'cause he mixes it with love
And makes the world taste good.
And the world tastes good 'cause the candyman thinks it should.
– "The Candyman", Willy Wonka and the Chocolate Factory
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Tuesday, July 30, 2013
What to Expect From the Fed FOMC Meeting: Looking for QE Clues / Interest-Rates / Quantitative Easing
By: Money_Morning
Gary Gately writes: Don't expect a definitive answer from this week's Federal Open Market Committee (FOMC) meeting on when the Fed will begin tapering its massive quantitative easing program.
Instead, the focus will be on the FOMC's statement, which will be scoured for clues about when scaling back QE3 could begin.
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Saturday, July 27, 2013
Despite Declining Deficit, Foreigners Aren’t Bailing Us Out, So the Fed Will Keep QE Going / Interest-Rates / Quantitative Easing
By: Casey_Research
By Bud Conrad, Chief Economist
The basic imbalance driving our economy is the government deficit, which spun out of control as a result of the Credit Crisis of 2008/9. But the sequester, improving tax base, lower interest rate, and elimination of stimulus spending have caused the big government deficit, while still extreme, to drop to half its previously nosebleed levels.
Wednesday, July 24, 2013
Eight More U.S. Cities on the Verge of Bankruptcy / Interest-Rates / US Debt
By: Money_Morning
Detroit is the largest municipal default in the history of the US. The city owes $9.2 billion in pensions, $1.9 billion to creditors and is $18.5 billion in debt.
The city's infrastructure is collapsing. Almost half of its streetlights are not working and aren't being repaired.
The average time for Detroit police to respond to an emergency is just under an hour. Crime has spiked. Many in the city have resorted to carrying firearms for their personal protection.
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