Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, January 08, 2012
Global Interest Rate Movements in 2011 / Interest-Rates / Central Banks
By: CentralBankNews
Of the central banks that net increased their interest rates, the average increase was 281 basis points (skewed up by Belarus; the average would be 185 excluding Belarus). There were 18 central banks tightening by 100 or more basis points. The outliers were Belarus 3450bps, Kenya 1200bps, and Uganda 1000bps. Of those tightening rates, it was largely emerging and frontier markets, with inflation pressures running high on the back of rising food commodity prices and relatively buoyant economic conditions, particularly in the early part of the year.
Saturday, January 07, 2012
Foreign Central Banks Dumping U.S. Treasury Bonds, Treasure From Treasuries / Interest-Rates / US Bonds
By: DeepCaster_LLC
“Holdings of U.S. Treasurys (sic) by foreign central banks has fallen by a record amount over the past four weeks according to the latest Federal Reserve data.
“The net $69 billion drop in Treasury holdings registered at the Fed by foreign official institutions comes as benchmark yields ended 2011 near record low levels…
“The decline in foreign holdings of Treasurys (sic) in recent weeks has not resulted in higher yields and lower prices because other investors have sought the safety of US debt.”
“Foreign Central Banks Cut Treasury Holdings by Record”
The Financial Times, www.cnbc.com, 12/30/11
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Friday, January 06, 2012
Debt, It's a Rollover... or is it? / Interest-Rates / US Debt
By: William_Bancroft
Will Bancroft looks at the debt loads weighing down economies and sees a year of tightrope walking for the authorities and the banking system. The financial markets wait with baited breathe for a resolution to the debt problems, but are there any fixes available?
As we enter 2012 there is one issue that probably sits at the forefront of our minds: can the overly indebted parts of the financial system keep financing themselves?
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Tuesday, January 03, 2012
Math Vindicates S&P U.S. Debt Downgrade / Interest-Rates / US Debt
By: Michael_Pento
Standard and Poor’s has been greatly vilified for their call to lower the U.S. credit rating to AA+ from AAA. The evidence, naysayers point to, for their justification of excoriating S&P is the performance of Treasuries since the downgrade occurred. Indeed, U.S. debt yields have fallen and the dollar has increased in the five months after being stripped of AAA.Read full article... Read full article...
Tuesday, January 03, 2012
Global Government Bond Market Ponzi Scheme / Interest-Rates / Global Debt Crisis 2012
By: John_Mauldin
For whatever deeply embedded psychological reason – and your humble analyst is profoundly guilty – we humans seem prone to picking out a particular point in our space-time continuum (read: the New Year) to think about the future and new beginnings, rather than running the exercise every week or month. Maybe so much introspection and thinking is just too exhausting, so we only do it on an annual basis. I am deep in my reading as I research my annual forecast issue, which I will write Friday. I am thinking of being especially foolish (and anyone who makes predictions is foolish) and going out to a five-year time frame. It should be challenging.
Saturday, December 31, 2011
2011: The Year 60 Minutes Misled Americans About Municipal Bonds / Interest-Rates / US Bonds
By: Janet_Tavakoli
In previous posts, I've mentioned serious fiscal problems that need to be addressed at state and local levels. This varies by region and some issues are potentially solvable.
I live in Illinois, which is ground zero for fraud, corruption, underfunded pension funds and general fiscal mismanagement. It's an example of one of the worst fiscal messes in the United States. This year Illinois hiked personal income taxes from 3% to 5%, and increased corporate taxes. We'll be slammed with hidden tax increases in utilities, purchases, and more. When now Mayor Rahm Emanuel left his post as White House Chief of Staff to run his election, the Chicago mayoral race centered partly around steps, including budget cuts, needed to solve Chicago's serious fiscal issues: See "Third Word America: Drowning in Debt and Chocking on Lies," Huffington Post, June 24, 2011, and 'Fast-Tracking to Anarchy;" August 25, 2010.
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Friday, December 30, 2011
ECB Thinly Veiled Bailout / Interest-Rates / Eurozone Debt Crisis
By: PhilStockWorld
The ECB is borrowing U.S. Dollars from the Fed to bailout European banks. And that is in addition to the Long Term Refinancing Operation (LTRO).
However, the "borrowing" is not called "borrowing." It's called a "temporary U.S. dollar liquidity swap arrangement." Yet it is really borrowing because it's going massively in one direction for the purpose of giving the ECB Dollars to lend to European banks, so the ECB can avoid lending more Euros. The ECB doesn't want to tarnish its "inflation fighting" reputation and further devalue the Euro. Instead, the Fed is taking billions of Euros as collateral for the Dollar swap.
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Wednesday, December 28, 2011
What Will 2012 Bring for Global Central Banks Monetary Policy? / Interest-Rates / Central Banks
By: CentralBankNews
he year of 2011 was an interesting and eventful year in monetary policy. As the chart below shows, the GDP weighted average interest rate of central banks crept up in the first half of the year as commodity prices remained buoyant, economic recoveries showed signs of gaining momentum, and inflation was the key concern in emerging markets. But this was then followed by a reversal in course in the later part of the year as the specter of the European debt crisis and slowing global growth raised downside risks for growth and price stability, spurring central bankers to cut rates and otherwise ease policy settings.
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Tuesday, December 27, 2011
Euro-zone Credit Implosion Secret, ECB Cannot Stop Collateral Contagion Collapse! / Interest-Rates / Eurozone Debt Crisis
By: Gordon_T_Long
How long can the European media keep the EU credit implosion a secret? The disgraced former IMF Director, Demonic Strauss Kahn said on Tuesday December 12th, 2011 that No 'Firewall' Exists and Europe Has 'Only Weeks'. Of course within minutes of this Financial Times news release which detailed his vent on EU leadership and the perilous situation in Europe, the article disappeared.
Tuesday, December 27, 2011
US Public Debt Grows to World War II Level / Interest-Rates / US Debt
By: Pravda
In early December the ratio of public debt of the United States to GDP has reached 99.5%, which is the highest number since World War II. After placing another portion of the bonds at $160 billion, the U.S. will exceed this significant number. Rating agencies are willing to revise the U.S. credit scores.
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Friday, December 23, 2011
Should Definition of Central Bank Lender of Last Resort Function Be Expanded? / Interest-Rates / Central Banks
By: Paul_L_Kasriel
A fractional-reserve banking system is susceptible to bouts of liquidity stringencies that, if left unchecked, can result in serial bank failures and an abrupt contraction in bank credit. The sine qua non of central banking is to act as a lender of last resort to otherwise solvent but temporarily illiquid banks so as to prevent their temporary illiquidity from deteriorating into insolvency, which would result in the aforementioned contraction in bank credit. This "narrow" interpretation of the lender-of-last resort function was the catalyst for the Federal Reserve Act of 1913. After the Banking Crisis of 1907, Congress believed that it was necessary to re-establish a central bank lender of last resort so as to prevent temporary financial market liquidity stringencies from deteriorating into severe economy-wide recessions.
Friday, December 23, 2011
Robert Prechter Explains The Fed, Money, Credit and the Federal Reserve Banking System / Interest-Rates / Central Banks
By: EWI
This is Part III, the final part of our series "Robert Prechter Explains The Fed." (Here are Part I and Part II.)
Money, Credit and the Federal Reserve Banking System
Conquer the Crash, Chapter 10 By Robert Prechter
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Thursday, December 22, 2011
Market Manipulation Is Not Why Most Traders Lose / Interest-Rates / Learn to Trade
By: EWI
How often have you heard analysts refer to a down day on Wall Street as "traders taking profits"? Sounds great, but the sobering fact is that most traders -- in futures, commodities, or forex -- lose money.
Any book on trading will list for you the many reasons why most traders lose. Yet some traders do win; some even set records. In 1984, Elliott Wave International's founder and president Robert Prechter won the U.S. Trading Championship, setting a new all-time profit record of 444.4% in a monitored real-money options account. Later in his monthly Elliott Wave Theorist, Prechter published a Special Report "What A Trader Really Needs To Be Successful" with 5 important insights for would-be market speculators (including the explanation of why "market manipulation" is not why most traders lose.)
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Thursday, December 22, 2011
ECB Rhetoric versus Reality on Money Printing / Interest-Rates / Quantitative Easing
By: Ben_Traynor
This week, the gap between what the European Central Bank says and what it does became very noticeable indeed...
I know they're stolen, but I don't feel bad.
I take that money, buy you things you never had.
'Free Money', from the album 'Horses' by Patti Smith
Wednesday, December 21, 2011
ECB Stealth QE Euro 489 Billion Money Printing to Prevent Eurozone Banking System Collapse / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
The ECB's first ever long term Refinancing Operation (LTRO) that had been estimated to provide upto Euro 350 billion to Europe's bankrupt banks in the form of cheap 1% 3 year loans, instead a huge Euro 489 billion was borrowed by 523 banks in a rush to grab cheap money that amounts to QE in all but name regardless of ECB propaganda.
Wednesday, December 21, 2011
European Credit Crunch – Another Excuse For Silver Downdraft? / Interest-Rates / Eurozone Debt Crisis
By: Dr_Jeff_Lewis
It's clear that Europe's debt problems can now be wrapped up into the term credit crunch. In light of operations by the Federal Reserve, the amount of money available for credit appears to be shrinking, while risk premiums demanded by banks are thickening.
On Monday, the 3-month LIBOR-OIS spread rose to a record of .49%, a gain of nearly 11% in just one trading day. This important measurement shows the universal health of the banking system as determined by the LIBOR rate and the overnight indexed swap. The OIS rate is a generally strong indication of money market interest (investors who want little risk, but also little reward) and their favor or disfavor for particular investments.
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Monday, December 19, 2011
European Debt Crisis Explained, the Back Door Bazooka Solution / Interest-Rates / Eurozone Debt Crisis
By: Chris_Ciovacco
The concept of a “back-door bazooka” is based on a recent policy change made by the European Central Bank (ECB). Reuters summed up the pros and cons of the stealth bazooka concept this way:
Read full article... Read full article...Instead of unlimited bond buying, the ECB will offer banks this week an opportunity to borrow money for three years for the first time, extending the current one year maximum ceiling for refinancing. France hopes banks will use the money to buy euro zone bonds, and ease the upward pressure on yields, but Italy’s Unicredit bank said last week this “wouldn’t be logical” for banks under pressure to reduce risk and rebuild capital.
Monday, December 19, 2011
The Status Of QE3 / Interest-Rates / Quantitative Easing
By: Tony_Pallotta
Aside from countless banks calling for QE3 which one has to wonder if their analysis may be slightly biased for personal gain the question remains will we see QE3.
The November 2010 FOMC statement which launched QE2 made it clear why the Fed was expanding their balance sheet by $600 billion.
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Saturday, December 17, 2011
EU Banking Crisis: Towards the "Leveraged Breakup" of Euroland? / Interest-Rates / Eurozone Debt Crisis
By: Bob_Chapman
The Fed’s third quarter audit data shows a total system debt of 355% and of GDP, in spite of so-called de-leveraging. It is down from the second quarter’s 375% of GDP, but up from 264% a dozen years ago. Financial sector borrowing fell almost 50% in the quarter but non-financial debt increased while financial debt fell – a push so to speak. Unfortunately most of the debt growth emanated from Washington. That growth was $557 billion, of at a 14.1% annualized rate. Of course, what the federal government is doing is the antithesis of what they should be doing. Will these borrowings and debt continue, of course they will.
Friday, December 16, 2011
France Triple A Debt Rating Downgrade, G7 Government Debt Facts and Projections / Interest-Rates / Eurozone Debt Crisis
By: Asha_Bangalore
The possibility of Standard &Poors downgrading France’s triple A debt rating is the latest source of market anxiety among several other factors. Standard &Poors put 14 eurozone countries on negative watch earlier in the month. Today, Christian Noyer, the head of the central bank of France, expressed strong reservations about ratings agencies. It is helpful in this context to look at recent trends of government debt as a percent of GDP of major advanced nations.