Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, June 20, 2013
Detroit the Epicentre of the U.S. Death Spiral of Debt? / Interest-Rates / US Debt
By: InvestmentContrarian
George Leong writes: Debt is deadly, and it’s made even worse with rising interest rates that prevent you from eliminating the debt load. What happens with rising interest rates is that payments mostly go toward the interest and less to the principal. In fact, it’s what I call a death spiral of debt that worsens as rates move higher.
When individuals face excessive debt, often the solution is to pare down on spending and adhere to a strict debt repayment program.
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Thursday, June 20, 2013
FOMC Meeting: Fed Provides No Direction to Markets on QE Tapering / Interest-Rates / Quantitative Easing
By: Money_Morning
Diane Alter writes: Market participants were hoping for clarity following the highly anticipated FOMC meeting Wednesday on the big question: to taper, or not to taper?
As many expected, there were no explicit statements about when the Fed would end its massive quantitative easing (QE) measures.
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Thursday, June 20, 2013
Vast $2.6+ Trillion Quantitative Easing (QE) to End? / Interest-Rates / Quantitative Easing
By: DK_Matai
An unprecedented monetary policy so supportive of US and global recovery has now begun to turn, as indicated recently by the Federal Reserve chairman Ben Bernanke. The step-by-step halt and exit from this type of multi-trillion-dollar QE remains untried and untested, so we remain in totally uncharted waters in regard to unintended consequences. Is there huge market volatility next? Most probably, yes! Just watch the long term interest rates rising as there was no real sterilisation of this massive injection of money supply in trillions of dollars over the last five years on top of the $800+ billion total Federal Reserve balance sheet inherited in March 2008. [See Federal Reserve chart and note ATCA 5000 briefing: "Why The End of QE May Be Imminent? Faith, Trust and Pixie Dust"]
Thursday, June 20, 2013
Bill Gross - Bernanke is Driving in the Fog / Interest-Rates / US Federal Reserve Bank
By: Bloomberg
PIMCO co-CIO Bill Gross appeared on Bloomberg TV's "Street Smart" with Trish Regan and Adam Johnson today, where he said that investors who are selling Treasuries on expectations that the Federal Reserve will scale back QE are missing the influence of inflation on the Fed's decision. He said, "The market basically has misinterpreted the growth and the unemployment targets while leaving out the inflation targets going forward…This is a combined growth, unemployment and inflation type of combination that has to be delicately managed."
Wednesday, June 19, 2013
China's Credit Crunch Signaling Stress in Global Financial System / Interest-Rates / Credit Crisis 2013
By: Jesse
Here is some interesting data out of China. The story is by Matt Phillips.
The inter-bank liquidity crunch is a classic banking problem for which the central bank as lender and regulator was created.
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Wednesday, June 19, 2013
Grumblings of Fed’s QE Taper; What Will Happen in Wake of Today’s FOMC Meeting? / Interest-Rates / US Federal Reserve Bank
By: InvestmentContrarian
George Leong writes: The wait is over. The Federal Reserve will conclude its Federal Open Market Committee (FOMC) meeting today and, of course, all of you will know what Chairman Ben Bernanke’s current thinking will be.
We have been hearing grumblings from other Federal Reserve members across the nation about how the voting members should consider tapering the Fed’s bond buying.
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Wednesday, June 19, 2013
The Only Thing Certain About Today’s Fed FOMC Meeting / Interest-Rates / US Federal Reserve Bank
By: Graham_Summers
The Fed will announce its moves today at 2PM.
There’s really no telling what will happen. The markets have become truly schizophrenic. For instance, stocks continue to rally as though more QE is coming.
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Wednesday, June 19, 2013
END GAME Singularity: The System Will Be Purged through Interest Rates / Interest-Rates / Global Debt Crisis 2013
By: Charlie_Tarango
Interest
Interest Rates represent the Balance Between Capital and Labor.
Economic History revolves around that Balance Moving from one extreme to the other.
Human Nature and Mathematics Drive those Swings. No Group or Force can Stop that. Any Machination or Manipulation, Individually or Collectively can only Elongate, Not Alter that Outcome.
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Tuesday, June 18, 2013
What the U.S. Treasury Bond Market Says About Likelihood of Fed QE Tapering / Interest-Rates / US Bonds
By: Graham_Summers
The big question on every investors’ lips today and tomorrow is: “will the Fed announce or hint at tapering QE?”
Over the last two years, one of the biggest tools in the Fed’s arsenal has been verbal intervention: the act of saying something in order to push the market up. Time and again 2011-2012 saw various Fed Presidents appear at key points to push the market higher by promising more action or stimulus.
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Tuesday, June 18, 2013
U.S. Treasury Bond Bubble Red Alert, QE Taper Talk Puts Bonds at Risk – Where to Hide? / Interest-Rates / US Bonds
By: Axel_Merk
Induced by “taper talk,” volatility in the bond market has been surging of late. Is there a bond bubble? Is it bursting? And if so, what are investors to do, as complacency might be financially hazardous.
Tuesday, June 18, 2013
U.S. Treasury Bond Market Sell Signal / Interest-Rates / US Bonds
By: Brian_Bloom
On reflection, the two weekly charts below should have been included in the equity market overview that I sent out yesterday (http://www.beyondneanderthal.com/equity-market-risks-are-rising-3/ ).
A significant “sell” signal has been given on the weekly bond price chart.
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Thursday, June 13, 2013
Bill Gross: Why QE Will End Before the Fed Wants It To / Interest-Rates / Quantitative Easing
By: Money_Morning
Ben Gersten writes: Legendary bond guru Bill Gross doesn't think too highly of the Federal Reserve and Ben Bernanke's monetary policies.
"There comes a point when no matter how much blood is being pumped through the system as it is now, with zero-based policy rates and global quantitative easing programs, that the blood itself may become anemic, oxygen-starved, or even leukemic, with white blood cells destroying more productive red cell counterparts," Gross writes in his June investment outlook titled Wounded Heart.
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Tuesday, June 11, 2013
U.S. Bond Market - If There’s a Time to Panic… It’s Now / Interest-Rates / US Bonds
By: Investment_U
Alexander Green writes: I received several letters from readers concerning my recent column opining that the 30-year bull market in bonds is over.
Some asked if it was really that big a deal that bonds fell by 2% in May. The answer is yes. It is a big deal, especially when 10-year Treasurys yielded just 1.7% a month ago. That slight sell-off erased more than a year’s worth of interest.
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Friday, June 07, 2013
Is Compound Interest Friend Or Foe? / Interest-Rates / Social Issues
By: Raul_I_Meijer
Amid all the superficial up and down rumblings of stocks and bonds, and hyped up analysis thereof, none of which makes you any wiser (hey, I told you Abenomics can't work..), it's a good idea to look at some of the more profound workings of the financial system. I saw an interesting take on an angle into this, even though unfortunately it was by itself also superficial.
The angle in question was provided by Walter Hickey for Business Insider, in an article (originally) entitled " Compound Interest Is Responsible For Modern Civilization " (it later turned into "A Simple Math Formula Is Basically Responsible For All Of Modern Civilization", but that’s not even true: just because something can be expressed in a math formula doesn't mean it turns into that formula). It's interesting, and it's not bad, but, sorry Walter, with all respect, I don't think it's good enough.
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Friday, June 07, 2013
The Painful Price of Subsidized Money / Interest-Rates / US Interest Rates
By: Money_Morning
Martin Hutchinson writes: Bond yields have been generally declining, and the market as a whole is set up for them to continue the trend.
Not bad, right?
Wrong.
It's extremely dangerous - to all investors - because it can't go on forever. It's not a question of if this might happen, it's a question of when.
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Wednesday, June 05, 2013
U.S. Treasury Bonds Will be Returned to Sender / Interest-Rates / US Bonds
By: Jim_Willie_CB
The USTreasury Bond is the primary vehicle for the USDollar. Nations do not hold the USDollar in raw currency form, except for the crime syndicates. They hold them in USTBond form, in order to gather some interest income. In the last few years, not few months, but years, the interest has been next to nothing, and surely far less than what it should be, given the risk and the nasty undermine to value by the monetary action by the central bank itself. Paltry interest aside, with all its unfortunate deterrent toward investment in USGovt debt, the USFed has been kicking out the value pillars for a very long time, far longer than the limit imposed loosely by Sir Alan Greenspasm of six to eight months. With the cost of money near zero, all markets are distorted, all assets improperly priced, and Gold marked for illicit ambush on a regular basis by the fascists.
Tuesday, June 04, 2013
Japan’s Easy Money Tsunami / Interest-Rates / Quantitative Easing
By: David_Howden
The Bank of Japan has embarked on one of the most inflationary policies ever undertaken. Pledging to inject $1.4 trillion dollars into the economy over the next two years, the policy is aimed at generating price inflation of 2% and further depreciating the Yen. The idea is to fight “deflation” and increase exports.
Tuesday, June 04, 2013
Fed Gearing Up to Scale Back on QE / Interest-Rates / Quantitative Easing
By: Bloomberg
Atlanta Federal Reserve Bank president Dennis Lockhart told Bloomberg TV's Michael McKee today that Fed officials are committed to stimulus even as divergent views on when to start paring back bond purchases create a "mixed message" to investors.
Lockhart said, "There certainly seems to be an acute fixation on the timing of any adjustment to the asset purchase program and I guess I would just encourage everyone to not lose sight of the bigger picture." He went on to say, "Any adjustment is not a major policy shift. The high level of accommodation will stay in place."
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Monday, June 03, 2013
Economies Addicted to Low Interest Rates / Interest-Rates / Quantitative Easing
By: Michael_Pento
It is amazing so many investors are oblivious to the fact that the developed world is completely addicted to artificially-produced low interest rates. Perhaps that is why there is still a debate over whether the ending of QE will adversely affect the economy, and if rising rates can occur within the context of a healthy economy.
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Friday, May 31, 2013
Is the US Treasury Bond Market Turning? / Interest-Rates / US Bonds
By: Simit_Patel
Perhaps the biggest macroeconomic event to watch for is the potential that the US Treasury bond market is turning south -- and that bond yields will rise significantly. This has many implications for the global economy, as capital flowing out of the US Treasury bond market -- the largest non-currency financial market -- will drastically impact values in other markets.
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