Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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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Thursday, March 29, 2012
The National Debt Clock is Ticking / Interest-Rates / US Debt
By: Mario_Innecco
U.S. Treasury Secretary Geithner said yesterday that the U.S. won't hit the debt limit (ceiling) unitl late in the year. Zerohedge has projected that the debt limit of $16'394 billion will be hit on September 14th, 2012. Presently the National Debt is at $15'596 billion according to the debt clock.
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Thursday, March 29, 2012
Martin Armstrong on the Sovereign Debt Crisis / Interest-Rates / Global Debt Crisis 2012
By: Ron_Hera
The Hera Research Newsletter is pleased to present a fascinating interview with Martin A. Armstrong, founder and former Head of Princeton Economics, Ltd. In the 1980s, Princeton Economics became the leading multinational corporate advisor with offices in Paris, London, Tokyo, Hong Kong and Sydney and in 1983 Armstrong was named by the Wall Street Journal as the highest paid advisor in the world.
As a top currency analyst and frequent contributor to academic journals, Armstrong's views on financial markets remain in high demand. Armstrong was requested by the Presidential Task Force (Brady Commission) investigating the 1987 U.S. stock market crash and, in 1997, Armstrong was invited to advise the People's Bank of China during the Asian Currency Crisis.
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Thursday, March 29, 2012
US Economy Hits Another Roubini Road-Hump: Is This The End? / Interest-Rates / US Economy
By: Andrew_Butter
Nouriel Roubini made his name out of a paper he co-authored in 2003 with someone whose name I forget, and everyone else did too. His thesis then was that the U.S. Current Account deficit (basically a long word for the trade deficit in Goods and Services) was unsustainable, so there would be a meltdown.
He was actually wrong for the right reasons; his idea was that the demand for U.S. Treasuries by foreigners was not enough to finance the Trade/Current Account Deficit, that part was right.
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Thursday, March 29, 2012
ECB’s Cheap Funds – Waiting for a Turnaround in Lending / Interest-Rates / US Interest Rates
By: Asha_Bangalore
The European Central Bank’s (ECB) financial accommodation through the longer-term refinancing operation (LTRO) in December 2011 and February 2012 amounting to over 1 trillion euros has stabilized financial markets. But, the desired impact on bank lending is not visible yet. Granted, it is a bit too soon to expect positive signs, but it is an important aspect to track in the near term. The objective of LTRO’s is to prevent a severe disruption of the flow of credit to businesses and households. The February LTRO reached a larger number of institutions compared with the December package and included expanded collateral that enabled smaller financial institutions to participate.
Thursday, March 29, 2012
Bill Gross on Bernanke Rolling Out QE3 in April / Interest-Rates / Quantitative Easing
By: Bloomberg
PIMCO founder and co-CIO Bill Gross spoke with Bloomberg Television's Margaret Brennan today, telling Bloomberg TV that the Fed will likely shift focus to mortgage securities to keep borrowing rates low when Operation Twist ends in June.
Wednesday, March 28, 2012
What Causes Interest Rates to Rise / Interest-Rates / US Interest Rates
By: Michael_Pento
The prevailing notion among the main stream media and economists is that interest rates are rising because of improving economic growth. But like many of the readily accepted tenets of today’s world of popular finance, this too has its basis in fallacy.Read full article... Read full article...
Tuesday, March 27, 2012
Quorum Sensing and Its Application to Computer Program Trading of Financial Markets / Interest-Rates / Learn to Trade
By: David_Petch
This article is going to throw another idea into the pot about computer based algorithms with an idea borrowed from Microbiology titled “Quorum Sensing”. Nature has been in the business of survival and evolution for billions of years, so it should come as no surprise to most that artificial intelligence and computer based design have been borrowed from studying the human mind. Now what do microbes have to do with how computer based trading is performed. A short-course in Microbiology will be required, but it will quickly be tied into how trading software is “sensing” its environment and how the common investor can use this knowledge to derail these trading patterns.
Tuesday, March 27, 2012
Bernanke – Additional Monetary Accommodation Is Entirely Possible / Interest-Rates / US Interest Rates
By: Asha_Bangalore
Chairman Bernanke presented an extensive assessment of the labor market this morning. Bernanke repeated his depiction of the labor market as “far from normal,” which was his opinion at the February 29, 2012 semi-annual testimony to the Financial Services Committee of the House of Representatives. He listed positive developments in the labor market – the noticeable increase in payrolls in the three months ended February (+245,000, 3-month moving average), moderation in layoffs in the public sector, longer workweek, the drop in the unemployment rate from 9.0% in September 2011 to 8.3% in February 2012, and the declining trend of new jobless claims. On the negative side, he mentioned it is unclear if the recent gains in payrolls “will be sustained,” and listed another set of indicators to watch – jobless rate, long-term unemployment, and the rate of net hiring.
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Sunday, March 25, 2012
U.S. Treasury Bond 10-Year Yield Is Heading Up Above 6% / Interest-Rates / US Bonds
By: Andrew_Butter
The last time the yield on the 10-Year US Treasury dipped below 2% was in 1941; just before (not just after), the Japanese attack on Pearl Harbor.
Perhaps then the recent 1.8% low was not just because of Euro-refugees, perhaps we are on the cusp of another Black Swan tail-risk potentially as devastating as World War II? Or perhaps there is another explanation?
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Wednesday, March 21, 2012
US Public Debt Growing at Unsustainable Rate / Interest-Rates / US Debt
By: Colin_Twiggs
We often blame Fed monetary policy for the GFC, with interest rates at exceptionally low levels leading to "Greenspan's bubble." Treasury was just as culpable, however, with the massive 2004-2005 surge in public debt flooding the market with liquidity. The repeat in 2008-2011 was more justifiable: the spike in public debt was necessary to offset the sharp decline in private (non-financial) debt which would have caused a deflationary spiral. The effect was to smooth out the fall in total domestic debt (public and private) and create a relatively "soft" landing for the economy.
Wednesday, March 21, 2012
Peak Imbalances Are Falling, New Bear Market in Bonds / Interest-Rates / US Bonds
By: Fred_Sheehan
The topic at hand is the 10-year U.S. Treasury bond, its falling price, and consequent rising yield. The ten year was trading at a 2.03% yield on March 9 and rose to 2.38% on March 19, 2012. These things happen and the ten-year may fall back to a price and yield that satisfies central bankers and Wall Street. Nevertheless, the era of artificially low government bond yields is coming to a close.Read full article... Read full article...
Tuesday, March 20, 2012
Fed Spreading Financial Cancer That's Killing the Markets and Democratic Capitalism / Interest-Rates / Quantitative Easing
By: Graham_Summers
While the vast majority of commentators look at the market action of the last three months and celebrate, I cannot help but shudder. The reason is that the stock market has been propped up solely by Central Bank and/or Federal Government intervention or the hope of more intervention.
That alone is worrisome as it indicates the stock market no longer cares for economic or financial fundamentals (something that has been clear for several years now).
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Monday, March 19, 2012
Are the Efforts of the World Central Banks Working? / Interest-Rates / Central Banks
By: EWI
The Fed is not the world's only central bank dealing with debt. Watch as Steve Hochberg, EWI's chief market analyst, shows what has happened to GDP in countries around the world as other central banks try to "inject liquidity" into the system.