Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, March 18, 2009
Bernanke Fights Debt Deflation By Printing Money / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
We are in the middle of a grand experiment. Bernanke upped the ante today in his foolish quest to beat deflation. Please consider the FOMC Press Release.Read full article... Read full article...
Wednesday, March 18, 2009
US Treasury Bonds As Competitor Safe Haven For Gold / Interest-Rates / US Bonds
By: Jim_Willie_CB
Dogs and cats are mortal enemies in the animal world. In the insect world, ants and termites are mortal enemies. In the financial world, gold and USTreasury Bonds are mortal enemies. They compete for the revered role of safe haven for funds. In today's day and age, with numerous storms, some unprecedented, safe haven is especially valuable. One of the most important jobs for the US Federal Reserve, JPMorgan (its agent), and the US Congress is to create the impression that USTreasurys are indeed not only safe, but beyond reproach and free from any hint of default potential. In recent months, with a failure of many important US-based financial engines, and sharp economic decline, made more complex by mammoth commitments from the USGovt on rescues and stimulus, the pristine image of USTreasurys has suffered from severe tarnish. Read full article... Read full article...
Tuesday, March 17, 2009
The Real Ponzi Scheme– Unreal Interest Rates / Interest-Rates / US Interest Rates
By: Rob_Kirby
Recently, former chairman of the Federal Reserve – Alan Greenspan – penned an editorial, “ The Fed Didn't Cause the Housing Bubble ”. It was published in The Wall Street Journal March 11, 2009 .
In the article Mr. Greenspan attempts to blame today's global financial crisis on “too-low mortgage rates” between 2002 and 2005 which led to a real estate bubble.
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Sunday, March 15, 2009
Will Global Quantitative Credit Easing Work? / Interest-Rates / Quantitative Easing
By: Prieur_du_Plessis
The Wall Street Journal: New fears as credit markets tighten
“The credit markets are seizing up again amid new anxieties about the global financial system.
“The fear and uncertainty that sent stocks to 12-year lows is now roiling the market for corporate bonds and loans, which have given back much of the gains they chalked up earlier in the year.
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Sunday, March 15, 2009
Swiss Quantitative Easing, Where are the Safe Havens Now? / Interest-Rates / Quantitative Easing
By: Michael_Pollaro
Where or where have our safe havens gone? Ah yes, there is always the Swiss Franc, right? Not any more!
First, the Swiss National Bank (SNB) sold off its gold reserves. Next, it began cutting interest rates. Later it announced a bias towards “quantitative easing.” Then we learn it's even willing to loosen bank secrecy rules. Now, this headline from MarketWatch:
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Saturday, March 14, 2009
Bond Market Fails to Follow Stock Markets Sharp Rally / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded sideways last week in spite of the sharp rally in equities. The market received the bond auctions quite smoothly as it was supported by further rumours of potential Federal Reserve purchases of Treasury securities. Since the US Federal Reserve has already lowered their benchmark to the 0-0.25% range, there is not much room left for them to stimulate the economy with further rate cuts. As a result, bond traders are expecting the Fed leaders to announce a Treasury bond purchase program as early as at their next policy meeting on Wednesday, March 18. Most market watchers are familiar with the “Greenspan put” that got the economy off the hook every time it encountered a bump in the road.Read full article... Read full article...
Friday, March 13, 2009
New Recovery Highs Expected in UltraShort TBT T-Bond ETF / Interest-Rates / US Bonds
By: Mike_Paulenoff
My near and intermediate term work indicates strongly that the upside pivot low at 44.01 last Friday (3/06) in the ProShares Ultrashort 20+ Year T-Bond ETF (NYSE: TBT) completed the corrective period off of the 2/09 recovery rally high at 49.86. If that proves to be the case, then all of the action this week- the climb to 48.20 on Wed., followed by the pullback yest. and today- represent the start of a new upleg that should propel the TBT to new recovery highs. Read full article... Read full article...
Thursday, March 12, 2009
Disintegrating Financial System: Haircut Time for Bond Holders / Interest-Rates / US Bonds
By: Mike_Whitney
"The only function of economic forecasting is to make astrology look respectable." John Kenneth Galbraith
When George Soros recently said that the financial system had "effectively disintegrated", it caused quite a flap. But Soros was not exaggerating. The financial system has disintegrated. What we are experiencing now is just the fallout from that event. This is easier to understand by using an analogy. Imagine watching the demolition of a hundred-story skyscraper. After the explosives detonate and the building implodes, the chunks of debris and the shattered glass begin to fall to the ground below.
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Thursday, March 12, 2009
Global Zero Interest Rates Policy Means Spend Now Pay Later / Interest-Rates / Global Financial System
By: Mike_Shedlock
ECB President Trichet has effectively cut its interest rate policy to .5% by agreeing to provide banks an unlimited supply of cash. Let's tune in with a look at ECB Approaches Zero Rates by Stealth With New Weapon .
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Monday, March 09, 2009
U.S. Treasury Bonds Short-term Bounce Continues / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded up last week. All you little traders out there who have long positions in the bond market, let's all say a big thank you to the Bank of England – which not only lowered their benchmark rate to a new all time low of 0.50%, but also loudly trumpeted that they will be in the market buying long term Gilts (UK Government bonds) in the not too distant future. This announcement caused a close to 50 basis point rally in the 10 year Gilts and rallies of lesser magnitude in other government bond markets. Supply will be a front page item again in the US as the Treasury will be conducting what used to be a quarterly auction cycle for the second month in a row. The market will need to deal with new supply of 3, 10 and 30 year bonds as the week unfolds. Read full article... Read full article...
Saturday, March 07, 2009
Inflection Point in U.S. Treasury Bond Interest Rates Near? / Interest-Rates / US Interest Rates
By: Michael_Pollaro
Pity the tortured Treasury bond buyer; what to do, what to do. These headlines from Bloomberg news chronicle the struggle. On March 4th :
Treasuries Fall on Looming Auctions, Deficit Funding Concern
By Susanne Walker
March 4 (Bloomberg) – Treasuries fell as stocks rose and traders speculated the U.S. will sell $60 billion of notes and bonds next week after the worst two months of losses in government debt in five years
Saturday, March 07, 2009
Hedge Funds Profit from Ratings Agencies AAA Rated Junk Bonds / Interest-Rates / Corporate Bonds
By: John_Mauldin
- Unintended Consequences
- The I-Factor
- Rating Agencies Gone Wild
Rules have consequences. And sometimes they have unintended consequences. If I told you that the US government was going to give multiple tens of billions of taxpayer dollars to hedge funds and private investors, you would justifiably not be happy. I think the word angry would come to mind. But that is exactly what is happening, as a result of rules that were written for a time and place seemingly long ago and far, far away. Further, we are looking at potentially much larger sums being lost in the bank bailout (can we say hundreds of billions?), a reduced lending capacity at banks and, in general, a worsening of the very problems at the core of the crisis.
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Thursday, March 05, 2009
Bank of England Ignites Quantitative Inflation / Interest-Rates / Credit Crisis 2009
By: Nadeem_Walayat
Economic Shock and Awe as Interest Rates are cut to 0.5% coupled with £75 Billion conjured out of thin air by Mervyn King Waving his "Central Bank Magic Wand". The government through what should be more accurately termed as "Quantitative Inflation" than "Quantative Easing" sanctioned £75 billion in the initial print run which will have a multiplier effect through fractional reserve banking and leverage of anywhere from between X10 to X20 the amount depending on how it filters through the economy, therefore £75 billion increase in the money supply implies the supply of credit should jump by anywhere between £750 billion to £1.5 trillion, but more probably in the region of X10 at £750 billion over the next few months, with expectations of several more doses of "Quantitative Inflation" during 2009 that seeks to devalue the British Pound towards parity to the U.S. Dollar.Read full article... Read full article...
Tuesday, March 03, 2009
U.S. Treasury Bond Market Outlook / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded down last week. The market action was quite disappointing for a number of reasons. The fundamental data remains dismal and considerably weaker than consensus forecasts. Pressure on the stock markets has not eased up one bit. The S&P500 Stock Index broke key support at 800 a couple of weeks ago and it ended the month of February below the lows of last November. Needless to say stocks had a brutal 2008, a record January drop to start 2009 and then followed up with the worst February performance on record. Read full article... Read full article...
Monday, March 02, 2009
U.S. Bond Market Performance Analysis / Interest-Rates / US Bonds
By: Richard_Shaw
For a while after the Q4 2008 simultaneous crash of nearly all forms of assets, bonds recovered and stocks did not. However, of late, bonds are not so strong. Read full article... Read full article...
Saturday, February 28, 2009
Obama Says Short U.S. Treasuries / Interest-Rates / US Bonds
By: Michael_Pollaro
Bank bailouts, homeowner bailouts, auto industry bailouts, and now massive stimulus packages; the Federal Government spending list goes on and on. The Federal Deficit for this fiscal year is projected by Goldman Sachs to be as high as $2.5 trillion. That's 5.5 times the fiscal 2007 Federal Deficit and 1.5 times Gross U.S. Savings. A $2.5 trillion deficit will create quite a waterfall on this graph, don't you think:Read full article... Read full article...
Tuesday, February 24, 2009
U.S. Treasuries on the Move / Interest-Rates / US Bonds
By: Mike_Paulenoff
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) gapped to the upside this morning ahead of Bernanke's testimony, likely expecting some supportive news, such as the Fed intending to buy Treasury paper to foster lower mortgage rates. As of yet, longs either are disappointed in Bernanke's prepared text or are so uncertain that they are taking profits as the TLTs test prior resistance at 106.50/60. Whatever the actual reason, as long as the TLTs do not break and sustain beneath 104.80, my technical work encourages me to remain long.Read full article... Read full article...
Monday, February 23, 2009
U.S. Bond View Positive Despite Higher than Expected Inflation / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded higher last week. The fundamental data remains weak and pressure on the stock markets lent renewed support for bonds. Supply remains a topic of conversation for traders as the Treasury will be auctioning close to a total of another $100 Billion 2, 5 and 7 Year Notes next week. If interest remains as solid as it was on the Quarterly refunding last week, then bonds should manage to continue to hold the support levels that were tested and held during the recent down-trade.Read full article... Read full article...
Wednesday, February 18, 2009
Key Market Indicater Says Sell Gilts, Buy Stocks / Interest-Rates / Investing 2009
By: FleetStreetInvest
Watch out! The next bubble could be about to burst. This also signals a great opportunity for smart investors – because a key indicator shows that now's a fantastic time to get into stocks. In the past 24 months, emerging markets, housing and commodity bubbles have all popped with painful impact. Now, the same could happen again, but this time in the government bond market.
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Tuesday, February 10, 2009
Treasury Bonds Trade Lower on Increasing Supply / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded down again last week, as the main driver appears to be the supply side of the equation. As expected, setting up for the Quarterly Treasury refunding kept a lid on the market even as the economic landscape continues to deteriorate. Traders will have to deal with $32Billion 3 Year Notes on Tuesday, $21Billion 10 Year paper on Wednesday and $14Billion 30 Year Bonds on Thursday. The key is normally in the second leg of these 3 day auctions, so if the 10 Year tranche is well distributed, that could provide a bit of relief for this market that has seen nothing but trouble during the first 5 weeks of 2009.Read full article... Read full article...