Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, March 01, 2013
The U.S. Fed's Tightening Pipe Dream / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: "We could exit without ever selling by letting it run off." What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed's unprecedented and inflationary position will be gradually and placidly unwound.
Thursday, February 28, 2013
US Treasury Bonds The Biggest Bubble In History About to Pop / Interest-Rates / US Bonds
By: Jeff_Berwick
The US Treasury Bond market is the longest unbroken bull market known to the financial world. For more than 30 years it has trended higher in nominal US dollar terms.
Wednesday, February 27, 2013
No Easy Escape for the Fed / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
I've said since the beginning of 2009 that any future "recovery" experienced by the markets and the economy would be derived through massive government spending and Federal Reserve debt monetization. Therefore, the logical conclusion must be that when or if fiscal and monetary austerity is eventually adopted, the economy and markets would crash.
Monday, February 25, 2013
How the Fed Will Crash the U.S. Bond Market / Interest-Rates / US Bonds
By: Submissions
Richard Moyer writes: When you or I buy bonds, we pay a certain amount of money to buy someone elses debt. In return, they pay us a certain amount of interest for a fixed period of time.
Sunday, February 24, 2013
Europe’s Fine… Just Ask Depositors Who Saw Their Savings Go to ZERO / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
Anyone who wants to get an inside look at both the European banking system and the politicians in charge of fixing it need to only look at Spain’s Bankia.
Bankia was formed in December 2010 by merging seven totally bankrupt Spanish cajas (regional banks that were unregulated). The bank was heralded as a success story and an indication that European Governments could manage the risks in their banking systems.
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Saturday, February 23, 2013
Euro-zone Debt Crisis - Whatever It Takes / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
Lord Melchett: “Farewell, Blackadder [hands him a parchment]. The foremost cartographers of the land have prepared this for you; it's a map of the area that you'll be traversing. [Blackadder opens it up and sees it is blank] They'll be very grateful if you could just fill it in as you go along. Bye-bye.” – From the English comedy series Blackadder (Part 2, Episode 3)
Was it only a few years ago I visited the Emerald Isle of Ireland? So recently had this fair land come to such a sad state. The collapse of its largest banks foreshadowed the demise of many other European banks that had borrowed money from British, German, and other European banks to lend against homes and property. The Irish government had to guarantee deposits and bond holders in order to prevent a bank run. I think I am correct when I state that the Central Bank of Ireland was the first central bank to avail itself of large-scale use of the Emergency Liquidity Assistance (ELA) provision of the European Central Bank. This was before we became so familiar with the process in Greece.
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Saturday, February 23, 2013
The ‘End’ of QE – Hype or Tripe? / Interest-Rates / Quantitative Easing
By: Andy_Sutton
I am going to say right up front that there is going to be quite a bit of sarcasm in this essay. I say this simply because of the ludicrous nature of our marionette-esque talking heads in the mainstream financial press in this country. They are truly amazing, taking molehills and making mountains out of them and vice versa. In one segment telling us that there in fact will be no criminal charges against anyone involved in the HSBC drug/terrorism money laundering scandal – if they talk about it a all – while in the next advocating holding the next ten generations hostage by supporting the continued subsidy of said corrupt organization et al with fiat money printed from nothing with the debt placed on the taxpayer’s tab.
Saturday, February 23, 2013
PIMCO's Bill Gross Expect QE To Continue To At Least End Of 2013 / Interest-Rates / Quantitative Easing
By: Bloomberg
PIMCO's Bill Gross told Bloomberg Television's Trish Regan and Adam Johnson on "Street Smart" yesterday that quantitative easing will continue to "at least the end of the year."
Gross said that the Federal Reserve knows that its policy has negatives: "There are ultimately and presently negatives to these policies. The chairman recognizes that." He also spoke about returning to the gold standard, which would be "very difficult."
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Wednesday, February 20, 2013
Why U.S. Interest Rates Are Rising / Interest-Rates / US Interest Rates
By: Michael_Pento
The interest rate on the Ten-year Note has risen from 1.58% on December 6th of last year, to as high as 2.03% by mid-February. Most equity market cheerleaders are crediting a rebounding economy for the recent move up in rates. According to my count, this is the 15th time since the Great Recession began that the economy was supposedly on the threshold of a robust recovery.
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Monday, February 18, 2013
Spanish Debt Grows by €146 Billion, Largest Ever Recorded / Interest-Rates / Eurozone Debt Crisis
By: Mike_Shedlock
Proof there is no rebalancing in Europe is easy to find. For example, El Pais reports Spanish Debt Grows by €146 Billion.
What follows is a Mish-modified translation of the above Google-translation.
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Friday, February 15, 2013
What About U.S. Bond Market? / Interest-Rates / US Bonds
By: Robert_M_Williams
All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident. - Arthur Schopenhauer (1788 - 1860)
Interest rates are an integral part of our life since most of us have mortgages, car loans, credit cards, and even student loans. Interest rates are the new plague and they are everywhere. The media continues to remind us that the US Federal Reserve, acting in our best interest, will remain accommodative for many months to come. That means keeping rates at or near zero and the presses rolling. This will supposedly grease the wheels of the economy and facilitate the recovery we’re hearing so much about. Inversely the media never mentions the fact that it’s the market that sets rates, and that very same market has been raising rates for months.
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Wednesday, February 13, 2013
The Great Lie That Will Bankrupt America / Interest-Rates / US Debt
By: DailyWealth
Porter Stansberry writes: The world's markets are beginning to go haywire.
The world's money system – the scales upon which the world's market functions – is being deliberately destroyed. And so, the monetary signals that guide the markets – which are supposed to represent the supply and demand decisions of billions of people – have become distorted.
Wednesday, February 13, 2013
Bond Market Bubble Expectations / Interest-Rates / US Bonds
By: BATR
Bonds are loans that have the expectation of payback with interest. Government bonds are viewed as the safest financial instrument since the primary fiscal obligation of the state is to honor the terms of their own notes. However, in the fevered climate of currency wars among central banksters, the security factor of capital repayment is rapidly coming into question. As interest rates rise, the economic value of the bond diminishes. This inverted normal relationship is the essential dynamic of lending money with the purchase of Treasury Bonds. So what is all the talk about a bond bubble and likelihood that it will destroy your underwriting capital?
Wednesday, February 13, 2013
Dim Sum Bonds: A New Way to Play the Yuan and Chinese Debt / Interest-Rates / International Bond Market
By: Investment_U
Jason Jenkins writes: For about the last four months, investors have been throwing money into funds that focus on a relatively new instrument called “dim-sum” bonds. In fact, EPFR Global reported there were $81 million of inflows in the week ended January 16.
The big question: Is there a solid basis behind this movement, or are people out there just chasing yields?
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Tuesday, February 12, 2013
General Public Doesn't Quite Understand Bond Market Risks / Interest-Rates / US Bonds
By: Bloomberg
Goldman Sachs President and COO Gary Cohn spoke with Bloomberg Television's Stephanie Ruhle on "Market Makers" from Cleveland, OH today, one of the cities where Goldman provides education and funding for small business owners.
Cohn said that, "there is really only one way that interest rates can go over some period of time which is ultimately higher. I'm concerned that the general public does not quite understand the pricing of bonds and interest rates and the inverse correlation between the two."
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Monday, February 11, 2013
U.S. Bond Markets Major Top, Yields Poised tor Rise / Interest-Rates / US Bonds
By: EWI
Our long term outlook for interest rates on U.S. Treasury securities has been a contrary opinion for many years. Most commentators have been expecting either economic expansion or Fed-induced inflation to push bond yields higher. Conqier tje Crash predicted that long term rates on AAA-rated bonds would fall much further as the monetary environment shifted form lessening inflation to outright deflation.
Thursday, February 07, 2013
Student Loans Ticking Bomb; Why It’s Such a Big Problem / Interest-Rates / US Debt
By: Profit_Confidential
George Leong writes: he threat of another credit rating downgrade for the U.S. national debt is increasing. But it’s not just due to the government’s inability to control its deficit; it’s about items not considered in budget talks. Student debt, for example, which has become increasingly guaranteed by the government, currently stands near $1.0 trillion.
And consumer debt is increasing, too. In third quarter 2012, non-real estate household debt in the U.S. economy increased 2.3% to $2.7 trillion, of which $42.0 billion was student loan debt. (Source: Federal Reserve Bank of New York, November 27, 2012.)
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Wednesday, February 06, 2013
Low Interest Rates Impoverish Savers / Interest-Rates / UK Interest Rates
By: BATR
Even the most ardent optimist has to confront the consequences of low interest rates. The macro analysis of ivory tower academics seldom reflects the struggle of ordinary consumers or retirees. One such pinhead is Ben Bernanke. Back on October 1, 2012 at the Economic Club of Indiana, the Federal Reserve Chairman employs sophistry of a major order. Such confused and twisted logic defies common sense and real world finance. Robert Romano writes in the article, More monetary alchemy from Bernanke: Low interest rates help savers.
Wednesday, February 06, 2013
The United States of Debt Addiction / Interest-Rates / US Debt
By: GoldSilver
mybudget360.com writes: 16 point 7 trillion dollars. That is our current national debt. 12 point 8 trillion dollars. That is the amount households carry in mortgage and consumer debt. We are now addicted to debt to lubricate the wheels of our financial system. There is nothing wrong with debt per se, but it is safe to say that too much debt relative to how much revenue is being produced is a sign of economic problems. At the core of our current financial mess is how we use debt as a parachute for any problem. We’ve been masking the shrinking of the middle class by allowing households to take on too much debt for a couple of decades. The results were not positive. Too this degree, we have now created a massive moral hazard economy where savings are punished into oblivion. There is very little incentive to put your money in a bank account yielding zero percent interest when real inflation is eating away at your money like a hungry wolf. So what do people do? Well many simply cannot save and therefore choose to go into debt to finance cars, housing, and education with very little down. Where does this debt addiction lead us?
Saturday, February 02, 2013
US Private-Sector Debt Deleveraging: Where Are We? / Interest-Rates / US Debt
By: John_Mauldin
I was just in Greece with Christian Menegatti, and we had a good conversation about the piece he has sent along as today’s OTB. The case Christian and his coauthor David Nowakowski lay out regarding an incipient turnaround in US deleveraging (and therefore in economic growth prospects) is in some ways truly outside the box – I certainly wouldn’t call it the consensus view at this point. But they make the argument about as strongly as it can be made; so, if nothing else, they give us a solid piece of work off of which we can bounce counterarguments.
For new readers: I often feature pieces in Outside the Box that make us think and that don’t reflect my personal bias or opinion. The point is that, if you only read what you agree with, you will miss the important changes and associated opportunities when they happen. And note that this piece is from Christian, who is head of research at Roubini Global Economics – not exactly a hotbed of bullishness. (By the way, Nouriel will be at my conference this year, more on which in a few weeks.)
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