Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, April 24, 2012
Where to Put Your Money When the U.S. Treasury Bond Market Bubble Bursts / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes:
With interest rates at near-record low levels it appears that the only way for rates to go is up.
As the U.S. economy moderately strengthens, that means the bond bubble will begin to leak. Even darker, the bubble might just burst altogether.
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Tuesday, April 24, 2012
Superheroes of Central Banking Destroying Money By Printing it to Excess / Interest-Rates / Quantitative Easing
By: Adrian_Ash
Eccentric yes, but central bankers are a long way from playboy billionaire geniuses with hidden superpowers...
SO CENTRAL BANKERS still can't leap tall buildings in a single bound then.
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Monday, April 23, 2012
German Bond Yield Trend Harbinger for U.S. Treasuries? / Interest-Rates / Credit Crisis 2012
By: Mike_Paulenoff
In our comparison chart of the Spanish, German and U.S. 10-year Yield, we see that downward pressure on Bund yield persists, owing to a flight to safety from the Euro-zone periphery into German paper. Bund yield has violated a multi-month support area, which projects a target of 1.25%.
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Sunday, April 22, 2012
Spain is Greece… Only Bigger and Worse / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
On the Surface, Spain’s debt woes have many things in common with those of Greece:
1) Bad age demographics
2) A toxic bank system
However, you’ll note that as we tackle each of these, Spain is in fact in far worse fiscal shape than Greece.
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Sunday, April 22, 2012
Spain is an Absolute Disaster / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
Well the financial world is awash with reports that the Spanish auctions went well. They did not. And you better believe the ECB and other Central Banks were involved in the buying.
Instead, Wall Street is using the auction (and just about every other announcement this morning) to shred and those who sold calls in their usual options expiration games. This has been the norm for years, but the mainstream financial media continues to find “fundamental” excuses for market action that is clearly just manipulation and nothing more.
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Wednesday, April 18, 2012
Spanish Flu May Send European Union to Bed / Interest-Rates / Eurozone Debt Crisis
By: John_Browne
Recently, the world's economic leaders, including economists at the European Central Bank, the European Union, the International Monetary Fund, and the U.S. Federal Reserve, supported by most of the mainstream financial media, assured the world that the debt agreement worked out between Greece and its creditors would help put an end to the European-wide debt crisis. In reality, the crisis has merely been papered over. Despite the broad rally in stock and bond markets over the past few weeks, I firmly believe that Greece will likely require another bailout within a year.
Tuesday, April 17, 2012
The Anatomy of Sovereign Debt Default / Interest-Rates / Global Debt Crisis 2012
By: Michael_Pento
The three primary factors that determine the interest rate level a nation must pay to service its debt in the long term are; the currency, inflation and credit risks of holding the sovereign debt. All three of those factors are very closely interrelated. Even though the central bank can exercise tremendous influence in the short run, the free market ultimately decides whether or not the nation has the ability to adequately finance its obligations and how high interest rates will go. An extremely high debt to GDP ratio, which elevates the country’s credit risk, inevitably leads to massive money printing by the central bank. That directly causes the nation’s currency to fall while it also increases the rate of inflation.Read full article... Read full article...
Tuesday, April 17, 2012
PIMCO Total Return Bond ETF (NYSE: BOND): Bill Gross’ Foray into ETFs Living Up to Hype / Interest-Rates / Exchange Traded Funds
By: Benjamin_Shepherd
I’m usually skeptical of exchange-traded fund (ETF) launches that are preceded by a lot of hype; generally, the harder a company works to promote a new exchange-traded product, the less value there is to it. And for the better part of the month leading up to its launch, PIMCO Total Return Bond ETF (NYSE: BOND) garnered quite a bit of attention for being bond maven Bill Gross’s inaugural effort in the ETF space.
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Monday, April 16, 2012
The Pain in Spain is too Big to be Contained / Interest-Rates / Eurozone Debt Crisis
By: PhilStockWorld
Depression.
Not the Economy (yet) but how I feel so far in my weekend reading. Even John Mauldin had to go against his wishes to ignore Spain this week now echos my thoughts on the subject in an excellent overview of the situation. Russ Winter has s similar view in "Bernanke and Germany Wake up to a Merda Storm" and Mish discusses Spain's emergency ban on cash transactions exceeding 2,500 Euros in an effort to clamp down on tax evaders and stop the rapid flow of money out of the country as well as the massive jump in Bank of Spain borrowing from the ECB.
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Saturday, April 14, 2012
Recent Federal Budgetary Trends: Facts, Not Opinions / Interest-Rates / US Interest Rates
By: Paul_L_Kasriel
The federal budget deficit reached its widest gap on a 12-month moving total basis in February 2010 at $1.478 trillion. Although remaining at astronomical levels, the budget deficit has been trending lower and stood at $1.246 trillion in March 2012. The year-over-year growth in the 12-month moving total of federal outlays peaked at 19.7% in July 2009. In March 2012, the year-over-year change in the 12-month moving total of federal outlays was minus 1.1%. The median growth in the year-over-year moving total of federal outlays from December 1955 through March 2012 is 6.6%.
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Friday, April 13, 2012
Different Opinions on Near Term Monetary Policy Prevail Within the FOMC / Interest-Rates / US Interest Rates
By: Asha_Bangalore
Fed officials have voiced different opinions about the direction of monetary policy in the past two days. Among FOMC members who are wary of the current stance of Fed policy, President Kocherlakota of the Minneapolis Fed indicated the Fed needs to commence reversing the extraordinary accommodation in the next six to nine months.
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Thursday, April 12, 2012
Whither U.S. Treasury Bond Yields After Operation Twist? / Interest-Rates / US Bonds
By: Asha_Bangalore
The Fed’s monetary policy accommodation in the form of two rounds of quantitative easing (QE) and the current Operation Twist (OT) that is underway have provided support for economic activity and helped to stabilize the financial system. Operation Twist will be completed as of June 2012. QE1 and QE2 led to higher Treasury note yields followed by a reduction in yields as the two programs were completed (see Chart 1). Operation Twist has succeeded in establishing a firm floor for rates, but on the expiration of the program as of June 2012, the future is uncertain.
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Wednesday, April 11, 2012
We Are Nearing the End Game of Central Bank Intervention / Interest-Rates / Credit Crisis 2012
By: Graham_Summers
Because of a lack of foreign interest in long-term Treasuries, the Fed decided to step in to pick up the slack. As a result of this, the US Federal Reserve has accounted for 91% of all new debt issuance in the 20+years bracket. Put another way, the US Federal Reserve is now effectively the long-end of the US debt market.
Tuesday, April 10, 2012
LTRO 3 likely before any U.S. QE3 / Interest-Rates / Quantitative Easing
By: Tony_Caldaro
In January we reported the following: http://caldaro.wordpress.com/2012/01/30/feds-monetary-base-update/. The FED’s monetary base did make a new high, in February at $2.753 tln, but appears to have ended well short of our $3.0 tln expectation. Since then the monetary base has contracted by nearly $100 bln. The recent high, in OEW terms, may have completed Primary wave III. This would suggest the base in now contracting in a Primary wave IV.
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Sunday, April 08, 2012
The Worst of All Monetary Policies, The Boom That Must End in Depression / Interest-Rates / Quantitative Easing
By: Thorsten_Polleit
I. Monetary Expansion Is Kept Going
In monetary analyses, the balance sheet of the commercial banking sector is typically kept separate from the balance sheet of the US Federal Reserve (Fed). However, combining the two balance sheets might be much more informative.
First, adding up the business volumes of commercial banks and the Fed provides a (much) better insight into the expansion of the monetary sector as a whole over time — especially so in times of the financial and economic "crisis."
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Thursday, April 05, 2012
Why the ECB Expanded Its Balance Sheet By Over $1 trillion in Less Than Nine Months / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
Between July 2011 and today, the ECB has expanded its balance sheet by an incredible $1+ trillion: more than the Fed’s QE 2 and QE lite combined (and in just a nine month period).
This rapid and extreme expansion of the ECB’s balance sheet (again it was greater than QE lite and QE2 combined… in nine months) indicates the severity of the banking crisis in Europe. You don’t rush this much money out the door this fast unless you’re facing something very, very bad.
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Thursday, April 05, 2012
The Student Loan Bubble is the Next Subprime Trillion Dollar Sinkhole / Interest-Rates / Credit Crisis 2012
By: Money_Morning
Martin Hutchinson writes:
Don't look now but there's another giant bubble out there. It's so big it rivals subprime.
I'm talking about the student loan bubble. Recently, the outstanding volume of student loans passed $1 trillion. What's more bothersome is that the average individual amount owed by new college graduates has passed $25,000.
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Wednesday, April 04, 2012
Fed Actions Speak Louder Than Words / Interest-Rates / US Interest Rates
By: Axel_Merk
Investors may be taken for a ride by today's Minutes of the Federal Open Market Committee (FOMC), which expand on the FOMC's March 13, 2012 statement; in the interim, we believe the Federal Reserve (Fed) Chairman Bernanke has gone out of his way to assure the markets that monetary policy will remain "highly accommodative," at least through late 2014.
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Tuesday, April 03, 2012
Italian Bonds/Economic Data/Materials Raise Caution Flag / Interest-Rates / Eurozone Debt Crisis
By: Chris_Ciovacco
Our models remain bullish longer-term, but we have some concerns on a shorter-term time horizon. The yield on a ten-year Italian bond has crept back up over 5%, a level which was last seen just prior to recent corrections/big drops in stock prices (see purple arrows below). Economic data has started to weaken relative to expectations in a similar manner to what we saw in spring 2011 (blue arrow below).
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Monday, April 02, 2012
German Bunds Interest Rate Yield Pressing Support / Interest-Rates / Eurozone Debt Crisis
By: Mike_Paulenoff
Starting a new month and a new quarter, U.S. 10 year YIELD remains rangebound, but looking like it is in a down-loop towards 2.00% again.
In our comparison chart between U.S. and German yield, notice that German 10-year yield is pressing against its key support plateau, and looks like it is about to break down, which probably is a warning either that some other negative surprise is approaching in Europe, or that the German economy is about to sputter -- or both. All of this will negatively impact U.S. growth and press Treasury yield lower, also impacting the iShares Barclays 20+ Year Treasury Bond ETF (TLT).
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