Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, July 28, 2011
The Death of the "Risk-Free" Investment / Interest-Rates / Global Debt Crisis
By: Money_Morning
Martin Hutchinson writes:
There's an old investing axiom that says "there's no such thing as a free lunch" - which basically tells us we can't earn a profit without taking some risk.
And whether or not the United States defaults on its debt when the federal government hits its debt ceiling on Tuesday, the threat by Standard & Poor's to downgrade the United States' top-tier AAA credit rating means there will also be no such thing as a "risk-free" investment.
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Tuesday, July 26, 2011
Greek Debt Bailout Might Succeed, If All Goes According to Plan / Interest-Rates / Credit Crisis Bailouts
By: Victoria_Marklew
With the second bailout agreement for Greece announced on Friday (July 22), the EU has stumbled toward a new level of institutional development. However, Greece still does not have a sustainable funding package in place; and the easing of contagion pressures on other Euro-zone members may be short-lived.
Monday, July 25, 2011
U.S. Political Leaders Playing Dangerous Game with Nation’s Debt Rating / Interest-Rates / Credit Crisis 2011
By: Chris_Ciovacco
Leaders from both parties in Washington are playing a dangerous political game with the nation’s AAA credit rating. The first self-imposed deadline of July 22 to have a framework of a debt-ceiling deal in place has already passed. The second and firmer deadline of August 2 is a little more than a week away. Despite Standard and Poor’s warnings of a possible debt downgrade if realistic deficit-reduction plans are not agreed upon, the Wall Street Journal included the following in their update from Sunday night:
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Monday, July 25, 2011
The $1 Billion Armageddon Trade Placed Against the United States Bond Market / Interest-Rates / US Bonds
By: Money_Morning
Jack Barnes writes :
Someone dropped a bomb on the bond market Thursday - a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.
In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.
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Monday, July 25, 2011
US Debt Default Will Punish Pensions / Interest-Rates / US Debt
By: Barry_M_Ferguson
As America debates its debt, its debt ceiling, and the indebtedness of future generations, let’s make sure we all understand what we are talking about. Also, let’s look at an example of how the debt permeates through our society.
Sunday, July 24, 2011
How to Prepare for and Profit From the Stalled U.S. Debt Limit Talks / Interest-Rates / US Debt
By: Investment_U
Marc Lichtenfeld writes: Last November, I wrote about how to protect yourself from an impending crash that would take place this year – if the threat of failure to raise the debt ceiling seemed real.
As of right now, most people expect some resolution to be reached in the next few weeks before the August 2 debt-hike deadline.
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Saturday, July 23, 2011
Trouble Brewing In Credit Markets / Interest-Rates / Credit Crisis 2011
By: Tony_Pallotta
Credit markets continue to signal either a weakening economy or outright recession yet equities refuse to pay attention. With daily market volume dominated by intraday traders with no concern about macro data this comes as no surprise. The danger becomes that equity markets have no ability at forecasting any longer. The Great Recession saw equities peak just two months before contraction began. We may in fact be watching the same horrific forecasting ability play out if the credit markets are accurate.
Saturday, July 23, 2011
History of Great Debt Defaults, The English Experience c.1300 / Interest-Rates / Global Debt Crisis
By: Adrian_Ash
Money, once dear to bankrupt kings, is now at 3.5% for 30 years...
SO in 1294, English king Edward I fell out with Philip IV of France – to whom he owed loyalty by also being Duke of Aquitaine – after English pirates raided French ships and sacked the port of La Rochelle.
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Friday, July 22, 2011
There Is Life after Debt Default / Interest-Rates / US Debt
By: Peter_G_Klein
My father was a historian, and he helped organize local events to commemorate the bicentennials of the Declaration of Independence in 1976 and Constitution in 1987. I particularly remember the Freedom Train, a traveling exhibit housing memorabilia such as original copies of the Declaration, the Constitution, the Louisiana Purchase document, and (I learn from Wikipedia, though I don't remember these) Judy Garland's dress from The Wizard of Oz and Joe Frazier's boxing trunks.
Thursday, July 21, 2011
Moody’s Solution to Debt Crisis Shows Market Irrationality / Interest-Rates / Global Debt Crisis
By: Dr_Jeff_Lewis
The bond rating agency that missed the subprime bubble, financial crisis, and is perennially late to the downgrade “party” has toughened its language with the US government. Recently, the company warned that a debt ceiling is the true problem facing the US government. Eradicating debt fights from government would be a sure way to better the United States’ global standing as a first rate borrower.
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Wednesday, July 20, 2011
What Europe Could Learn From Dubai On How To Save The Eurozone From Their Bastiat Farce / Interest-Rates / Global Debt Crisis
By: Andrew_Butter
There is an article on Martin Wolf’s blog at the FT on “How to Save the Eurozone”, which you can read for free. It’s by Lawrence Summers; his bio says he was Treasury Secretary under Bill Clinton but says nothing about Andrei Shleifer or how he shafted Brooksley Born and helped Harvard University lose a billion.
Tuesday, July 19, 2011
U.S. Treasury Spreads Widen on Debt Concerns; Bond Market Revolt Awaits QE3 / Interest-Rates / US Bonds
By: Mike_Shedlock
long-end of the treasury curve is acting sick, smack in the face of a clearly slowing global economy.
Monday, July 18, 2011
30-Year Extend-and-Pretend Debt Plan for Greece, Crash Looking More Likely / Interest-Rates / Global Debt Crisis
By: Mike_Shedlock
Confusion reins supreme ahead of Thursday's EU summit that German Chancellor Angela Merkel thinks is "urgently necessary." However, Merkel will only attend if there is a plan that will be approved.
Is there any conceivable solution that can be worked out in 4 days? I suggest it is impossible.
Monday, July 18, 2011
The Painful Consequences of a U.S. Debt Ceiling Increase / Interest-Rates / US Debt
By: Money_Morning
Larry D. Spears writes:
Failure to reach a compromise on a U.S. debt ceiling increase could result in an unmitigated economic disaster - one so unprecedented government and private analysts can't even accurately pinpoint all the potential consequences.
To avert this crisis, U.S. President Barack Obama wants a debt ceiling increase of $2 trillion, which analysts say would carry the country through the end of 2012. The president has moved the deadline for reaching an agreement up to July 22.
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Saturday, July 16, 2011
Pushing U.S. Treasury Default Beyond August 2 / Interest-Rates / US Debt
By: Paul_L_Kasriel
If the federal debt ceiling were not raised by August 2, there still would be temporary means for the Treasury to keep paying all of its bills for a while. The Treasury could pull an FDR and revalue its gold holdings. Currently, the Treasury is valuing its gold holdings at $42.22 an ounce. By revaluing its gold holdings near the current open-market price, say at $1,575 an ounce, the value of Treasury gold holdings would rise by $400.8 billion. The Fed could write up the Treasury's deposit account by that much and the bills could be paid for a bit longer even without an increase in the debt ceiling.
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Saturday, July 16, 2011
Pimco's Gross: U.S. Lawmakers "Don't Get" Implications of Debt Ceiling Debate / Interest-Rates / US Debt
By: Bloomberg
Bill Gross of Pimco spoke to Bloomberg Television's Tom Keene this afternoon about the economy, the debt debate in Washington and the European stress tests. Gross said that he doesn't expect QE3, but that he expects the Fed to reiterate language. He also said that lawmakers "don't get" the long-term implications of the debt debate and that they "need to approach it gradually" when it comes to cutting spending.
Friday, July 15, 2011
Moody's Warning Edges U.S. Credit Rating Closer to Downgrade / Interest-Rates / Credit Crisis 2011
By: Money_Morning
David Zeiler writes: With time running out on a deal to raise the U.S. debt ceiling, Moody's Investors Service turned up the heat by warning Washington's bickering politicians that any missed debt payments will result in a credit rating downgrade.
Such a downgrade would have economically catastrophic consequences, roiling stock markets worldwide, sharply increasing borrowing costs for the U.S. government as well as businesses, and derailing an already-anemic economic recovery.
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Friday, July 15, 2011
It Ain't Money If I Can't Print It! / Interest-Rates / Quantitative Easing
By: Peter_Schiff
I have been forecasting with near certainty that QE2 would not be the end of the Fed's money-printing program. My suspicions were confirmed in both the Fed minutes on Tuesday and Fed Chairman Ben Bernanke's semi-annual testimony to Congress yesterday. The former laid out the conditions upon which a new round of inflation would be launched, and the latter re-emphasized - in case anyone still doubted - that Mr. Bernanke has no regard for the principles of a sound currency.Read full article... Read full article...
Friday, July 15, 2011
History of U.S. Debt Defaults / Interest-Rates / US Debt
By: MISES
John S. Chamberlain writes: On July 13th, the president of the United States angrily walked out of ongoing negotiations over the raising of the debt ceiling from its legislated maximum of $14.294 trillion dollars. This prompted a new round of speculation over whether the United States might default on its financial obligations. In these circumstances, it is useful to recall the previous instances in which this has occurred and the effects of those defaults. By studying the defaults of the past, we can gain insights into what future defaults might portend.
Friday, July 15, 2011
Europe's Debt Default Crisis: It's the CDS, Stupid / Interest-Rates / Global Debt Crisis
By: Adrian_Ash
"The constraints imposed by market forces [on government deficits inside a single-currency union] might either be too slow and weak, or too sudden and disruptive." - The Delors Committee report on European monetary union, getting it exactly right in 1989
GREEK BONDS have lost half to three-quarters of their face value. Six national strikes have all ended in violence already this year. In the three months to April, public investment spending fell 42% from the start of 2010, but total spending still rose – and tax revenues sank – forcing the budget deficit still wider as the economy shrank 5.5% year-on-year.
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