Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Saturday, September 15, 2012
Fed QE 3 Program is Short Term Thinking For Long-Term Pain / Interest-Rates / Quantitative Easing
By: Graham_Summers
Yesterday the Fed announced QE 3: an open ended program through which the Fed will purchase $40 billion worth of Mortgage Backed Securities every month until it decides that the world is right again.
The implications of this are severe. However, the first question we have to ask is, “why now?”
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Friday, September 14, 2012
Marc Faber: Fed QE3 Policy Will 'Destroy the World' / Interest-Rates / Quantitative Easing
By: Bloomberg
Marc Faber, publisher of the Gloom Boom & Doom Report, told Bloomberg Television's Betty Liu on "In the Loop" today that "the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols.
Faber said that he is "very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I'm happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world."
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Friday, September 14, 2012
Perma-QE: Lessons from Bernanke's Latest Splurge / Interest-Rates / Quantitative Easing
By: Ben_Traynor
Negative real interest rates show no signs of going away...
AFTER months of "quanticipation", the Federal Reserve has finally done it. Ben Bernanke yesterday announced another round of asset purchases.
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Friday, September 14, 2012
Unlimited QE3", Federal Reserve Attacks US Dollar, Risks Currency Warfare / Interest-Rates / Quantitative Easing
By: Dan_Amerman
QE3 Summary
The Federal Reserve has just announced that it would launch the so-called "QE3", or "Quantitative Easing Three" program. Key components are:
1) The creation of $40 billion a month out of thin air to purchase agency mortgage-backed securities at artificially low interest rates;
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Thursday, September 13, 2012
European House of Cards, Follow the Money / Interest-Rates / Eurozone Debt Crisis
By: John_Handbury
You’ve got to give super Mario Draghi his due – he’s no dummy. His comments in July "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough", were just in time to reduce the yields on Italian and Spanish bonds for their major issues the next week.
Wednesday, September 12, 2012
Euro Crisis and Holland Mortgage Debt, Those Dutch Tulips Ain't Looking All That Rosy / Interest-Rates / Eurozone Debt Crisis
By: Raul_I_Meijer
Well, the German Supreme Court decision is through, and it looks positive at a first superficial glance, so what could go wrong from here?
Sorry to break it to you, but plenty could. It’s amusing to see that decisions like these, the German court one or last week’s Draghi bond buying announcement, are seen as being positive for markets and/or entire economies, while in fact the only reason they have to be taken in the first place is that the situation is getting worse all the time.
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Wednesday, September 12, 2012
Sky No Longer the Limit for U.S. National Debt / Interest-Rates / US Debt
By: Pravda
The U.S. national debt has hit a new record. It has long been clear that no one can handle the problem. Therefore, the term, which the U.S. will need to come close to the legislative ceiling of this indicator, remains the main topic for speculation and forecasts. It is possible that the Americans will make it during the remaining several months of 2012.
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Wednesday, September 12, 2012
QE3, What’s the Fed Going to Do? / Interest-Rates / Quantitative Easing
By: Graham_Summers
Yesterday we worked through the illusion to the reality of the ECB’s “unlimited” bond purchases, the end result being that we discovered the ECB:
Monday, September 10, 2012
Why ECB Bond Buying Undermines Democracy; Is Draghi Above The Law? / Interest-Rates / Eurozone Debt Crisis
By: Mike_Shedlock
A post on the the Fibs and Waves blog by "Blankfeind" outlines the actual legal case against the OMT. I believe the case is rock solid. How the German constitutional court rules in two days is another matter.
Please consider The ECB Thumbs Its Nose At The Law.
Read full article... Read full article...On September 6th, the ECB announced its Outright Monetary Transactions program, known as OMT. Justified as a means for the ECB to repair monetary policy transmission and to recreate the singleness of monetary policy for the euro area, the OMT offers an unlimited commitment by the ECB to purchase short-term (one to three year) sovereign debt in the secondary markets for sovereigns who agree to certain conditions.
Sunday, September 09, 2012
The Myth that Japan is Broke: The World’s Largest “Debtor” is now the Largest Creditor / Interest-Rates / Japan Economy
By: Ellen_Brown
Japan’s massive government debt conceals massive benefits for the Japanese people, with lessons for the U.S. debt “crisis.”
In an April 2012 article in Forbes titled “If Japan Is Broke, How Is It Bailing Out Europe?”, Eamonn Fingleton pointed out the Japanese government was by far the largest single non-eurozone contributor to the latest Euro rescue effort. This, he said, is “the same government that has been going round pretending to be bankrupt (or at least offering no serious rebuttal when benighted American and British commentators portray Japanese public finances as a trainwreck).” Noting that it was also Japan that rescued the IMF system virtually single-handedly at the height of the global panic in 2009, Fingleton asked:
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Sunday, September 09, 2012
Why The Fed Will Not Launch QE3 / Interest-Rates / Quantitative Easing
By: Tony_Pallotta
Whether the Fed decides to launch QE3 this week is far more a complex decision than they lead us to believe. It is not as simple as monitoring economic data and deciding whether to expand the balance sheet or not.
Yet the Fed rarely discusses what that other criteria is in making such an important decision. The recent Jackson Hole speech by Chairman Bernanke did offer some insight to the other factors, as well as his recent Congressional testimony.
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Friday, September 07, 2012
Supra Mario Bond Vigilante / Interest-Rates / Eurozone Debt Crisis
By: Adrian_Ash
"The objective of this programme? It is to repair monetary policy transmission and to recreate the singleness of monetary policy for the euro area." ~ Mario Draghi, president of the European Central Bank, Thurs 6 Sept 2012
For the second time or more since May, today's Handelsblatt newspaper in Germany carries a big picture of Edvard Munch's The Scream.
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Friday, September 07, 2012
Draghi Buys Euro-zone Bonds, Fed Buys Time / Interest-Rates / Credit Crisis Bailouts
By: Ashraf_Laidi
ECB president Draghi has succeeded in reducing the relevance of the Bundesbanks opposition to bond purchases by making bond-purchases dependent upon ESM conditionality. And by integrating the conditionality of the ESM/EFSF plan into the much-needed bond purchase program, Draghi has also firmly sent the ball back into court of national governments.
Thursday, September 06, 2012
Bernanke Wealth Tax, Why Does He Hate Old People? / Interest-Rates / Credit Crisis Bailouts
By: Ned_W_Schmidt
A question that follows from the above is also of interest. Why is Bernanke transferring so much income and wealth from savers and investors to mega-banks and other speculative funds? We are of the basic crowd that believes that actions are more important than words. Since Bernanke has assumed a dictatorial role at the Federal Reserve, savers and investors have been punished. We need only look at the poor plight of savers to see the imposition of the Bernanke Wealth Tax.
Wednesday, September 05, 2012
Eurozone Crisis Spain's Capital Flight Is Now Bigger Than Asian Financial Crisis / Interest-Rates / Eurozone Debt Crisis
By: DK_Matai
Spain is emerging as the centre of the battlefield for the survival of the Eurozone as the probability for further fragmentation and exits increases dramatically. The flight of capital from Spain is now bigger than what Indonesia, one of the hardest hit countries during the Asian financial crisis experienced in the late 1990s. On an annualised basis, portfolio and investment outflows from Spain now total more than USD 750 billion, ie, more than 50 percent of the country’s Gross Domestic Product (GDP) as measured by the World Bank.
Wednesday, September 05, 2012
The U.S. QE Debate / Interest-Rates / Quantitative Easing
By: Peter_Schiff
There is an ongoing three way debate between those who believe the Fed should do more to strengthen the recovery, those who believe that the recovery is strong enough to continue on its own, and those who believe that the economy has been so fundamentally altered by the recession that no amount of stimulus can succeed in pushing unemployment down to pre-crash levels. As usual, they all have it wrong (although some are more wrong than others).
Wednesday, September 05, 2012
Why the Fed Should Not Do QE3 / Interest-Rates / Quantitative Easing
By: InvestmentContrarian
Sasha Cekerevac writes: In his recent speech at the Jackson Hole economic symposium, Federal Reserve Chairman Ben Bernanke made some interesting comments in regards to monetary policy. Following these remarks, gold moved up strongly, indicating that the market’s interpretation was that the Federal Reserve was indeed going to enact further stimulative monetary policy, also known as quantitative easing #3 (QE3). However, I don’t think it’s clear from the speech or recent events as to why now is the best time to use this monetary policy tool.
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Wednesday, September 05, 2012
Federal Reserve Chairman Ben Bernanke Speaking from Jackson Hole / Interest-Rates / Central Banks
By: Ian_R_Campbell
Why read: You will by now have been bombarded for three-plus days by written and verbal commentary on Federal Reserve Chair Bernanke's Friday, August 31, 2012 remarks made from Jackson Hole, Wyoming. You will have observed last Friday afternoon's U.S.$35+ jump in the physical gold price, and the Dow Jones Industrial Average and S&P 500 Index advances on Friday on the same news. Friday was a 'when Mr. Bernanke speaks, everyone listens positively' moment, even if it is 'just possible' that not everything Mr. Bernanke said on Friday ought not to be seen positively.
Wednesday, September 05, 2012
The Quadrillion Dollar Deflationary Debt Raft / Interest-Rates / US Debt
By: Raul_I_Meijer
Our Down Under roving reporter Skip came up with a few interesting questions when watching an interview that Russia Today recently ran with economist Richard Duncan.
Where doth debt take us going forward, and, for that matter, where has it - really - taken us so far? If and when Japan implodes, does that force the US out of the possibility of moving - or already being - into the Japanese deflationary scenario and into something more sinister? Will it be a quadrillion dollar long-term drip-feed, in essence prolonging death, or a massive quadrillion dollar diversion into breakthrough technologies? Both perhaps? Go halfsies?
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Sunday, September 02, 2012
Ultra Easy Monetary Policy and the Law of Unintended Consequences / Interest-Rates / Quantitative Easing
By: John_Mauldin
"No very deep knowledge of economics is usually needed for grasping the immediate effects of a measure; but the task of economics is to foretell the remoter effects, and so to allow us to avoid such acts as attempt to remedy a present ill by sowing the seeds of a much greater ill for the future." – Ludwig von Mises
We heard from Bernanke today with his Jackson Hole speech. Not quite the fireworks of his speech ten years ago, but it does offer us a chance to contrast his thinking with that of another Federal Reserve official who just published a paper on the Dallas Federal Reserve website. Bernanke laid out the rationalization for his policy of ever more quantitative easing. But how effective is it? And are there unintended consequences we should be aware of? Why is it that the markets seem to positively salivate over the prospect of additional QE?
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