Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, March 19, 2012
Is There a Bubble in U.S. Treasury Bonds? / Interest-Rates / US Bonds
By: Mike_Shedlock
... Explaining the 2011 Treasury Rally (It's Not What You Think); Where to From Here?
People have been calling a bubble in treasuries for at least a decade. The shocking result, especially to hyperinflationists, has been a stair-step decline in yields for 30 years. That's quite a long time.
Here is a chart going back 20 years from Steen Jakobsen at Saxo bank in Denmark.
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Monday, March 19, 2012
American's Asleep At the Wheel Driving Into Debt Slavery / Interest-Rates / US Debt
By: James_Quinn
Americans have an illogical love affair with their vehicles. There are 209 million licensed drivers in the U.S. and 260 million vehicles. The U.S. has a higher number of motor vehicles per capita than every country in the world at 845 per 1,000 people. Germany has 540; Japan has 593; Britain has 525; and China has 37. The population of the United States has risen from 203 million in 1970 to 311 million today, an increase of 108 million in 42 years. Over this same time frame, the number of motor vehicles on our crumbling highways has grown by 150 million. This might explain why a country that has 4.5% of the world’s population consumes 22% of the world’s daily oil supply. This might also further explain the Iraq War, the Afghanistan occupation, the Libyan “intervention”, and the coming war with Iran.
Sunday, March 18, 2012
U.S. Treasury Bond Market Sell Off / Interest-Rates / US Bonds
By: Tony_Pallotta
Slightly off topic Macro View this week as I really want to study the movement in treasury. The 10 year treasury yield is currently 2.30% which from an historical standpoint is very low. But a 33 basis point rise in one week is significant (100 basis points equal 1%). If the sell off in treasury accelerates things can get out of hand in very short order.
Sunday, March 18, 2012
The Fed Gets Creative, Buying Long-term Bonds / Interest-Rates / US Bonds
By: Alasdair_Macleod
According to a story in Wednesday’s Wall Street Journal, the US Federal Reserve is considering buying long-term Treasury and mortgage bonds in return for deposits held at the Fed. There has been no comment from the Fed and the story might have been no more than a trial balloon, in which case Bernanke and Co may be considering skewing the yield curve so that long-term bonds are less attractive than the time-preferences set by the market.
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Friday, March 16, 2012
Lesson from Tracking the U.S. 10-Treasury Note Yield / Interest-Rates / US Bonds
By: Asha_Bangalore
The 10-year U.S Treasury note yield is trading at 2.28% as of this writing, little changed from 2.29% yesterday. But, this is a 25 bps uptick in two trading days, given the March 12 closing quote of 2.04%. The reasons listed for the sharp sell-off are – the less dovish policy statement of the Fed, February retail sales numbers, the success of the stress test of the largest 19 banks of the nation, the resolution of the Greek debt crisis, the improvement of employment conditions seen in the February employment report, the optimism from equity price rally, and so forth. The main takeaway is that as the list of positive economic signals grows, long rates move up in a hurry.
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Thursday, March 15, 2012
The Big Fat Greek Lie Is Now Obvious to Spain… So Who’s Next to Debt Default? / Interest-Rates / Eurozone Debt Crisis
By: Graham_Summers
The big fat Greek lie being spread throughout the financial community is that Greece has been saved. It’s a lie for the following reasons:
1) Greece did in fact default
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Wednesday, March 14, 2012
Are U.S. Interest Rates About To Rise? / Interest-Rates / US Interest Rates
By: Marty_Chenard
Will Interest Rates jump higher?
It could happen, as you will see on today's weekly chart of the 10 year yields .... symbol: $TNX.
The good news is that today's 10 year yield chart shows a five down trend. The bad news is that the one year weekly trend line is breaking out to the upside.
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Wednesday, March 14, 2012
Global Economic Slowdown Paves Way for QE III / Interest-Rates / Quantitative Easing
By: Michael_Pento
Back in early 2011, I was one of the few economists to warn that global GDP growth would slow dramatically in the near future and that the emerging market economies would not be immune from that upcoming contraction. My prediction was based on the premise that the then incipient sovereign debt crisis in the developed world would cause the export-driven BRIC economies to stall. We now know that the Japanese economy is contracting, while Europe's GDP is falling off a cliff. And just last week we received more concrete evidence that emerging market economies are starting to feel the pinch from the developed world's debt crisis.
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Wednesday, March 14, 2012
U.S. Student Debt To Reach $1.4 Trillion by 2020 / Interest-Rates / Student Finances
By: EconMatters
Student loan debt is surging, partly boosted by many who became unemployed during the Great Recession going back to school hoping for a better job prospect. An analysis by the Federal Reserve Bank of New York (FRBNY) showed that student loan debt stands at $870 billion nationally, surpassing the nation’s outstanding balance on auto loans ($730 billion) and credit cards ($693 billion) as of third quarter, 2011.
Tuesday, March 13, 2012
Central Banks Beat Up on Private Creditors / Interest-Rates / Eurozone Debt Crisis
By: John_Browne
Last week the Greek government, with the heavy handed support of its larger friends in the Eurozone, succeeded in coercing some 85.8 percent of private sector bondholders to "voluntarily" exchange €206 billion-worth of Greek sovereign bonds for newer bonds with longer maturities, lower coupon rates, and a face value of 53.5 percent less than the original paper. The benignly termed "haircut" (more accurately described as a "scalping") is particularly painful for those buyers who were literally strong armed by their own governments into buying Greek bonds in the hopes of achieving regional financial stability.
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Tuesday, March 13, 2012
Eurozone Debt Crisis: Hope for the Best, Plan for the Worst / Interest-Rates / Eurozone Debt Crisis
By: Axel_Merk
When Greece's woes first rattled the markets two years ago, the pundits predicted a collapse of the euro.
The resilience of the euro has been due to a number of factors, not least of which is that the eurozone as a whole has a broadly balanced current account. As such, a misbehaving bond market doesn't necessarily cause a plunge in the currency, as foreign buyers are not required to fund a deficit or protect against currency weakness.
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Tuesday, March 13, 2012
European Countries Lining Up to Debt Default / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
Today's Outside the Box comes to us from Grant Williams, who covers the world from his perch in Singapore, in his always instructive and always entertaining Things That Make You Go Hmmm... I felt for him right at the outset today, because (like yours truly) he was trying really hard ... not to talk about Greece.And so, he announced, he was going to talk about Spain and about oil; but then, before he even made it through his opening paragraph, there was this:
"... ahhhh NUTS! They did it AGAIN.... ok... the Greek restructuring. It's not as though I could ignore it, now, is it? ... Oil can wait until next time.... no doubt it'll be an issue then too."
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Tuesday, March 13, 2012
European Sovereign Debt Crisis Will Take Years to Play Out / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
Jerry del Missier, co-chief executive officer of Barclays Capital, spoke to Bloomberg TV's Trish Regan and Adam Johnson today. Del Missier said that the sovereign debt crisis in Europe will take "years to play out" and that the Volcker Rule could "significantly dislocate" some markets for Barclays.
Monday, March 12, 2012
Get Ready to be Disappointed With "Sterilized" QE3 / Interest-Rates / Quantitative Easing
By: Ashvin_Pandurangi
The other big "risk on" news last week, aside from a coercive Greek debt restructuring that was completed "successfully" (but will only make Greece's public debts larger and less sustainable), was a rumor that "sterilized QE3" may be launched by the Fed in the near future (as in, at their meeting this week). The original Wall Street Journal piece by Jon Hilsenrath about this "new novel" program contained precious little in the way of details, yet the pundits and the markets obviously love to jump on the irrational bandwagon first and ask questions later. I, for one, am still very skeptical that the Fed is either able or willing to launch further QE this month.
Sunday, March 11, 2012
There Will Be Euro-zone Debt Crisis Contagion, The Next Greek Tragedy / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
… (December 11, 2009) – Greece's prime minister, George Papandreou, told reporters in Brussels on Friday that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see "no possibility" of a Greek default, Bloomberg News reported. Papandreou also said that there was no possibility of Greece leaving the euro area, according to the report.
… (January 29, 2010) – There is no bailout and no "plan B" for the Greek economy because there is no risk it will default on its debt, the European monetary affairs commissioner, Joaquin Almunia, insisted on Friday.
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Saturday, March 10, 2012
The Fed gets creative / Interest-Rates / US Interest Rates
By: Alasdair_Macleod
According to a story in Wednesday’s Wall Street Journal, the US Federal Reserve is considering buying long-term Treasury and mortgage bonds in return for deposits held at the Fed. There has been no comment from the Fed and the story might have been no more than a trial balloon, in which case Bernanke and Co may be considering skewing the yield curve so that long-term bonds are less attractive than the time-preferences set by the market.
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Friday, March 09, 2012
If Economy is Recovering, Why Are U.S. Cities Going Bankrupt? / Interest-Rates / US Debt
By: EWI
As pundits chatter about an economic recovery, 80 miles east of San Francisco you'll find a city (pop. 292,000) facing bankruptcy:
Stockton is on the verge of becoming the largest city in the United States to declare bankruptcy...
San Francisco Chronicle (3/4)
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Thursday, March 08, 2012
BoE Interest Rate Ddecision / Interest-Rates / UK Interest Rates
By: Submissions
Gareth Talbot submits: Following today’s Bank of England interest rate decision Phil McHugh, senior analyst at foreign exchange firm Currencies Direct, said:
“The pound fell to a one week low against the euro in the run up to the BoE rate decision although remained steady on the announcement. The decision as expected was to maintain rates at 0.5% and to hold fire on the asset purchasing programme.
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Sunday, March 04, 2012
Debt Crisis Unintended Consquences, What Greece Should Do and What About Ireland? / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
"Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces."
– Sigmund Freud
Let me introduce Mauldin's Rule of Thumb Concerning Unintended Consequences:
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Friday, March 02, 2012
The Greek Bailout, the CDS Market, and the End of the World / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Shah Gilani writes:
A not-so-funny thing happened on the way to the latest Greek bailout.
The terms and conditions of the bond swap Greece agreed to before getting another handout constitutes a theoretical default - but not a technical default.
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