Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, May 12, 2013
European Finances Still in taters, Ireland, Spain.... Still on the Brink / Interest-Rates / Eurozone Debt Crisis
By: Raul_I_Meijer
Ireland was one of the first European countries to get hit by the financial crisis. It decided to bail out its banks at the direct cost of the taxpayer. In 2012, those banks were still overleveraged (and still are today) to the same level as for instance Cyprus, with assets over 800% of GDP. Probably only Iceland has been worse (UK?!). According to IMF/EC, 2012 Irish national debt was 117% of GDP; not a pretty number either. This all as a lead-up to a May 5 article by Dan White in the Irish Independent that TAE's own Nicole Foss sent over recently. But first a little history, for who may be bit shaky on it, just for fun, and to explain how Ireland got to have its present population of 4.5 million people.
Sunday, May 12, 2013
European Banking Is Getting Scary / Interest-Rates / Eurozone Debt Crisis
By: GoldSilverWorlds
The past week was not only characterized by US equity markets making one all-time high after another. Much less excitement was associated with one frightening message after another related to the state and prospects of the (European) banking sector.
Saturday, May 11, 2013
On the Verge of the Biggest Bond Market Implosion of All Time / Interest-Rates / Japanese Interest Rates
By: Graham_Summers
Japan should serve as a lesson to central planners around the world.
Japan’s stock market/ real estate bubble burst in the early ‘90s. Since that time Japan has launched NINE QE efforts equal to roughly 25% of its GDP. And GDP growth has worsened despite these efforts from 2% to 1%. Ditto for employment.
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Friday, May 10, 2013
Global Interest Rates From An Austrian Economics Viewpoint / Interest-Rates / International Bond Market
By: GoldSilverWorlds
Interest rates all over the world are at historic lows or even negative in some instances.The recent interest rate cut by the European Central Bank brought the interest in Europe to its lowest level ever. The US is going through its fifth consecutive year of almost zero interest rates, which is the longest period ever in times of “peace.” People should question what the longer-term implications are for our economies and for society as a whole. An answer to this question is given by Claudio Grass who wrote about the matter in his latest outlook report (Global Gold Outlook Report)
Friday, May 10, 2013
The Fed Admits it's Dug itself into a Very Big Hole / Interest-Rates / Quantitative Easing
By: Bloomberg
Charles Plosser, president of the Philadelphia Federal Reserve Bank, told Tom Keene and Sara Eisen on "Bloomberg Surveillance" today that "we've dug ourselves a very large hole" and that "when I've weighed the costs and benefits of this [quantitative easing] policy, I've decided that the costs outweigh the benefits."
Plosser also said that it is "disturbing" to him that "more and more is being expected of central banks." He said, "We are expected to solve all the world's problems. Our fiscal authorities are not doing a very good job in any country."
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Friday, May 10, 2013
Long-Term Investors in Danger From Higher Inflation Expectations? / Interest-Rates / Inflation
By: InvestmentContrarian
Sasha Cekerevac writes: One of the biggest concerns for investors when it comes to long-term investing is the safe return of their capital. Following the 6.75% levy imposed by Cyprus on deposits of less than 100,000 euros, many investors were shocked that such an event could take place.
Certainly, long-term investing does have risks, including a hidden hazard of the possibility that a rising inflation rate will erode wealth just as easily as the levy imposed by Cyprus on bank deposits.
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Thursday, May 09, 2013
Bank of England Celebrates 50 Months of Stealth Inflation Theft From Savers and Tax payers / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England today kept interest on hold at 0.5% for the 50th month, as Britain's central bank continues to support its bankster brethren in the crime syndicate that calls itself Britain's banks who continue to literally get away with crimes without any real consequences as evidenced by the over 6 year old LIBOR scandal that the mainstream press and financial regulator only awoke to mid last year. As far as I am ware no one has gone to prison for this mega-fraud, instead the CEO's of Britians major banks have been retired on mega-pension handouts whilst all of the fines are at the end of the day being picked up by British tax payers.
Thursday, May 09, 2013
ECB Ponders Buying PIIGS Toxic Debt / Interest-Rates / Eurozone Debt Crisis
By: Mike_Shedlock
In an effort to stimulate small and medium (SME) lending the ECB considers acquiring banks toxic debt of the periphery. Via mish-modified translate from Spanish Libre Mercado.
Read full article... Read full article...The European Central Bank (ECB) could "soon" start buying bad debts of Southern European countries in an attempt to end the fragmentation in the eurozone and boost funding to SMEs, as confirmed by the German ECB representative Jörg Asmussen.
Wednesday, May 08, 2013
Real and Illusory Credit / Interest-Rates / Credit Crisis 2013
By: Fred_Sheehan
"When Ro-Ro goes No-No" expounded upon the ultimate futility of conjuring illusory wealth. Bernard Connolly's analysis, "Rethinking the Rogoff-Reinhoff Thesis," made the case. Connolly wrote This Time is Different: Eight Centuries of Financial Folly, "is largely an exercise in measurement rather than theory (while many of the data in the book are new, little or none of the theory is), it can give rise - and has given rise - to dangerously misleading popular interpretations of the data which its authors had so painstakingly assembled." Connolly then offered the theory; what follows is complementary data.
Tuesday, May 07, 2013
U.S. Bond Market Breakdown / Interest-Rates / US Bonds
By: Robert_M_Williams
"Facts are the enemy of truth."- Don Quixote - "Man of La Mancha"
Last week we had the FOMC decision by the US Federal Reserve in which they said that they would continue purchasing US $85 billion a month with basically no end in sight. Aside from that they stated for the first time that they would consider increasing the amount purchased (QE) if the economy were to weaken further. So I don’t have to be able to read the tea leafs to know that puts the Fed squarely on it’s chosen path of monetary stimulus, or QE as it is called, where they go into the bond market and continue to buy debt while holding rates at zero. During the first quarter the Fed purchased 72% of all new debt issued, so you could say it is a market maker. Some might go so far as to say that they are the market.
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Tuesday, May 07, 2013
QE Unprecedented, Exit Will Be a 'Messy Process' / Interest-Rates / Quantitative Easing
By: Bloomberg
David Zervos, head of global fixed income at Jefferies, told Bloomberg TV's Erik Schatzker and Sara Eisen on "Market Makers" today that the Federal Reserve's QE program is "the greatest monetary policy experiment of our lifetime and I do not think that anyone is smart enough, me, any central banker up there" to figure out how to properly exit.
Monday, May 06, 2013
U.S. Treasury Bond Market Sell-Off Imminent? / Interest-Rates / US Bonds
By: DailyGainsLetter
Moe Zulfiqar writes: In its most recent statement, the Federal Open Market Committee (FOMC) said it will continue to print $85.0 billion a month. With this money, it will buy $45.0 billion worth of long-term government debt and $40.0 billion worth of mortgage-backed securities (MBS) each month.
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Sunday, May 05, 2013
LIBOR The Next Wall Street Mega-Scandal Has Arrived / Interest-Rates / Credit Crisis 2013
By: Money_Morning
Shah Gilani writes: Well, it looks like the major financial institutions can't learn a lesson. They're neck deep in yet another financial scandal of global proportions.
U.S. and international securities regulators investigating manipulation of LIBOR, the world's most important set of benchmark interest rates, have uncovered another price-rigging scheme, this one in the $379 trillion market for interest rate swaps.
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Friday, May 03, 2013
Lower Bond Yields Enticing PIMCO to Sell European Debt / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
PIMCO's Bill Gross told Tom Keene and Michael McKee on "Bloomberg Surveillance" today that "lower yields and the higher prices are enticing us to gradually reduce our position" in European debt.
Gross also said that the new normal of subpar economic growth in the U.S. is intact even after employment increased more than forecast in April. Gross said, "We don't see higher real growth than 2 percent going forward...We've seen basically 3.5 percent nominal GDP growth even in the midst of an accelerating housing sector."
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Friday, May 03, 2013
Expert Forecasts U.S. Treasury Bond Market Crash / Interest-Rates / US Bonds
By: Money_Morning
David Zeiler writes: Not only is a bond market crash inevitable, but it will hit sooner than many think - by 2015 or 2016 at the latest, according to Michael Pento, president of Pento Portfolio Strategies.
"It's the most overpriced, over-owned, oversupplied market in the history of American economics," Pento said of the bond market in an interview with The Street.
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Wednesday, May 01, 2013
Apple Stock Sells Record $17 Billion of Corporate Debt at Just 1.81% / Interest-Rates / Corporate Bonds
By: Richard_Shaw
Apple borrowed $17 billion today in various maturity tranches, some floating rate and some fixed rate. The offering was oversubscribed by about 3 times.
It was the largest bond offering in history.
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Wednesday, May 01, 2013
Financial Collapse - Is Bernanke Preparing to Jump Ship? / Interest-Rates / US Interest Rates
By: Graham_Summers
The Fed meets today and tomorrow. The ECB meets on Thursday. Those will be the defining market forces for the next three trading sessions.
There is little if any point in trying to trade this week (at least until Thursday). The Fed is notorious for leaking info to the well-connected. The most recent “accidental” sending of a report a day early is just the latest example.
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Wednesday, May 01, 2013
The Real Reason U.S. Government Is Paying Down the National Debt / Interest-Rates / US Debt
By: Money_Morning
David Zeiler writes: After six years of non-stop deficit spending that has added $8.2 trillion to the national debt, the U.S. Treasury has announced that it expects to reduce the country's debt by $35 billion this quarter.
Given that national debt growth has rocketed past $16.7 trillion and is on track to exceed $17 trillion at some point in the fall, a $35 billion reduction is laughably tiny. It's just 0.02% of what we as a nation owe.
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Wednesday, May 01, 2013
Global Central Bank Money Printing Will Cause Long-Term Damage / Interest-Rates / Quantitative Easing
By: InvestmentContrarian
Sasha Cekerevac writes: One of the most confusing topics of late is the low level of the inflation rate even though monetary stimulus has been quite aggressive worldwide. The most recent data point came from Japan, in which consumer prices dropped by 0.5% in March versus the same time in 2012.
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Monday, April 29, 2013
Welcome to the Next Subprime Bubble / Interest-Rates / US Debt
By: Money_Morning
Greg Madison writes: Who could forget the subprime mortgage crisis of just a few years ago?
If there's one good thing that came out of that nightmare, it's that we - borrowers, lenders, financial institutions all - learned that securitizing bad loans and letting them spread like poison throughout the financial system was a bad thing.
We can look back at the subprime crisis with the wisdom of afterthought, and see all the mistakes laid bare.
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