Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, November 28, 2008
Gold and UK interest Rates as Proxy for Global Price of Money / Interest-Rates / UK Interest Rates
By: Adrian_Ash
"...The nine decades of gold simply need not apply. Because there's just too much money chasing too many votes to make such a limiting system appeal..."
CENTRAL BANKING used to be easy, back when there was so little to do. You raised interest rates to attract an inflow of gold, supporting your currency on the foreign exchanges and restraining new credit at home. Or you cut interest rates to deter savers, and give the economy a shot of cheap money.
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Friday, November 28, 2008
Credit Crisis Watch- LIBOR Eases Whilst UK Spread Soars on Sovereign Debt Risks / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
For the world's financial system to start functioning normally again, it is imperative that confidence in the credit markets be restored. In order to gauge the progress being made to unclog credit markets, I regularly monitor a range of financial sector spreads and other measures. By perusing these one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect. Read full article... Read full article...
Tuesday, November 25, 2008
LIBOR Still at Credit Crisis Extremes as Banks Refusing to Lend / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The London Interbank Offered Rate (LIBOR) continues to fall from credit quake extremes, today falling to below 100 basis points (3 month) above the base interest rate that was cut in a panic move to 3% earlier this month. However as the below graph illustrates a 1% spread is still uncomfortably near credit crisis extremes and therefore implies that the banks are still reluctant to lend to one another which was confirmed by the Bank of England Governor Mervyn King who stated that extreme measures may be necessary to force the banks to lend again which in the final analysis implies nationalisation of the whole of british retail banking sector. Read full article... Read full article...
Monday, November 24, 2008
Bond Yields Breakout to New Multi-year Lows / Interest-Rates / US Bonds
By: Levente_Mady
The bond market convincingly broke out to new multi decade lows on yields. As the dismal economic data just continues to get worse, Treasury securities ironically remain the safe haven of last resort. Once the Quarterly Treasury auctions were out of the way, traders got the green light to boldly take the US Long Bond Futures to levels where no Long Bond contract has gone before! Risk remains the dirtiest of all dirty four letter words, so government bonds are the best place to hide. Read full article... Read full article...
Sunday, November 23, 2008
Credit Crisis Persists as Bond Spreads Widen / Interest-Rates / Credit Crisis 2008
By: Prieur_du_Plessis
Reuters: Financials need at least $1 trillion - analyst
“The US financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said.
“Eight financial companies - Citigroup, Morgan Stanley, Goldman Sachs Group, Wells Fargo, JPMorgan Chase, AIG, Bank of America Corp and GE Financial - are in greatest need of capital, he said.
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Sunday, November 23, 2008
U.S. Treasuries, the Final Asset Bubble / Interest-Rates / US Bonds
By: Eric_deCarbonnel
So far, the credit crisis has produced four asset bubbles as investors shifted from one asset class to the next. Three of these bubble have burst, but the last one, US treasuries, remains. Read full article... Read full article...
Saturday, November 22, 2008
Citibank Seeks More Bailout Cash as Corporate Bonds Crash to 20% Yields / Interest-Rates / Credit Crisis 2008
By: John_Mauldin
Leverage Is an 8 Letter Word- If Loans Are So Cheap, Why Don't They Sell?
- Deflation and Helicopters: Time for a Review
- Commercial Property Loans Start to Haunt the Banks
- Warren Makes a Bet
Leverage is an eight-letter word, which the markets now regard as twice as bad as the two four-letter words debt and pain (or fill in your own four-letter words). This week I try to give some insight into what is happening in the credit markets, some of it below the radar screen of most analysts. We will look at the potential for deflation and the Fed's response. There is a lot to cover, so let's jump right in.
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Friday, November 21, 2008
Citigroup Breakup Speculation Sends Credit Default Risk Soaring / Interest-Rates / Corporate Bonds
By: Mike_Shedlock
I have been saying for over a year that Citigroup would not survive in one piece. That option is looking increasingly likely as the Citigroup Board Weigh Options .
Citigroup Inc.'s board meets today to discuss the bank's options after Chief Executive Officer Vikram Pandit's efforts to rebuild investor confidence failed to halt the stock's descent to a 15-year low, a person with knowledge of the matter said.
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Thursday, November 20, 2008
Credit Collapse, U.S. Treasury Yields Fall to Record Lows / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Once again treasury bears who do not understand the implications of a collapse in credit are taking a beating as Treasury Yields Drop to Record Lows .
Treasury yields declined to record lows, with two-year notes dropping below 1 percent for the first time, as global stocks slumped and a deepening recession drove investors to the safest assets.
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Wednesday, November 19, 2008
U.S. Economy Reflation Challenge and LIBOR Deceptive Manipulation / Interest-Rates / Credit Crisis 2008
By: Jim_Willie_CB
A major challenge looms large on the immediate horizon. The US Economy must be reflated in order to avoid collapse. Debts have become a crippling factor. Liquidation of speculative trades coincides with economic retreat, and hedge funds are under attack by their creditors (largely Wall Street firms) while major companies shed workers by the tens of thousands. When asked about economic prospects, a standard answer lately of mine has been to observe important signals not of recession but of potential disintegration. Read full article... Read full article...
Wednesday, November 19, 2008
Economic Forecast, Peering into a Debt Ridden Future / Interest-Rates / US Interest Rates
By: Mick_Phoenix
Welcome to the weekly report. This week we look at some longer term indicators that will help identify when a turning point in the economy has arrived and why you should cancel Christmas, or at least go back to its traditional meaning, forgoing the pointless consumerism that surrounds it.
Before we start, you may have wondered (or not) why the weekly report wasn't around. I have spent the past 3 weeks laying out the groundwork for an attempt to peer into the longer term future. Subscribers have seen all 3 articles, culminating in the new scenario. I have released the first 2 articles to the public, the final part will also be released but not for awhile yet.
Wednesday, November 19, 2008
Misguided Bets On The Yield Curve Steepening / Interest-Rates / US Bonds
By: Mike_Shedlock
Bloomberg is reporting U.S. Long-Term Treasuries Advance as Consumer Prices Plummet . Treasuries maturing in 10 years or more, the most sensitive to inflation expectations, rose after a government report showed consumer prices dropped in October by the most on record.
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Saturday, November 15, 2008
Paulson's Blunders as Debt Securitization Market Remains Frozen / Interest-Rates / Credit Crisis Bailouts
By: Mike_Whitney
Henry Paulson's time at Treasury has been one pratfall after another. Even so, on Tuesday he managed to out-due himself. Paulson held a "surprise" press conference where he announced that the $700 billion Troubled Asset Relief Program (TARP) wouldn't be used to buy troubled assets after all. Instead, the money will used to bail out insurance giant AIG, provide extra capital for the banks to hoard, and now (this is new part) give money to "nonbank financial institutions, like insurers and specialty-finance companies" so they can lend to credit-worthy consumers. (Isn't that why we gave money to the banks?) Read full article... Read full article...
Thursday, November 13, 2008
Combating Credit Based Derivatives Deflation / Interest-Rates / Deflation
By: Mick_Phoenix
Welcome to An Occasional Letter. This week we pick up from the end of this article as we begin the process of peering into the future to assemble the next stage of the scenario I have followed over the past 6+ years.
However before we start I have recently had numerous e-mails asking to join my mailing list. I thank those people for their interest but I no longer run a mailing list since converting to a subscription only website. If you would like to know more, visit An Occasional Letter for details.
Wednesday, November 12, 2008
How Low Will the Fed Funds U.S. Interest Rates Go / Interest-Rates / US Interest Rates
By: Hans_Wagner
On Wednesday October 29th, the Federal Reserve lowered the Fed Funds rate by 50 basis points to 1.0%. This comes on top of an earlier rate reduction on October 8, 2008 of 50 basis points. The rate is now at the level former Fed Chairman Alan Greenspan kept during 2003 and 2004. This raises the question can and should the Fed lower rates further?Read full article... Read full article...
Wednesday, November 12, 2008
US Treasury Bonds Default Avoidance Means Dollar Death / Interest-Rates / Fiat Currency
By: Jim_Willie_CB
LIQUIDATION & USTBOND SUPPORT - The two main factors pushing up the US Dollar have been liquidation of speculative trades funded by it, and redemption of credit derivatives paid in it. These are not signs of any inherent investment in the US Economy itself, but rather its liquidation. Evidence abounds of severe deterioration within the United States, a collapse of confidence, a fall in business investment, ruin in retail demand, an avalanche of job loss, and a spread of corporate breakdown beyond the financial sector. Demands for nationalization have begun outside the financial sector in a wave certain to grow in strength and breadth. Read full article... Read full article...
Tuesday, November 11, 2008
Corporate Industrial Bond Yields Strongly Support Economic Deflation Thesis / Interest-Rates / Deflation
By: Mike_Shedlock
As one might expect in a credit crunch, default risk is rising. One measure of that risk is corporate bond yields. Let's take a look and see how various grades of bonds are performing. Read full article... Read full article...
Tuesday, November 11, 2008
Credit Crisis Eases as Interbank Rates Hit Multi-year Lows / Interest-Rates / Credit Crisis 2008
By: Ashraf_Laidi
Although signs of easing credit strains are manifested in multi-year lows in interbank rates, the market turmoil has exasperated the already shaky cash situation of US auto manufacturers, retailers and shippers, forcing fresh waves of nation-wide layoffs, which would only feed off the negative loop from rising employment, falling consumption, lower earnings and eroding bank credit. Consequently, JPY retains the last word over the USD, while both low yielding currencies dominate dealing flows against European and antipodean FX as Asian and European markets are mired in prolonged downside, failing to break Mondays sell-off in the US. Read full article... Read full article...
Tuesday, November 11, 2008
Glenn Hubbard Wannabe Fed Chairman Devises New Bailout Plan / Interest-Rates / Credit Crisis Bailouts
By: Brady_Willett
Although he didn't get the nomination to replace Greenspan, Columbia's Glenn Hubbard often comments on what he believes is the best path for policymakers to take. Yesterday Mr. Hubbard was at it again, offering a brief commentary on the Nightly Business Report:Read full article... Read full article...
Monday, November 10, 2008
Deep Interest Rate Cuts to Treat the Threat of Economy Turmoil / Interest-Rates / Recession 2008 - 2010
By: Regent_Markets
Last week the Bank of England hit the headlines with an unexpected 1.5% rate cut. The move was largely pre meditated as a shock tactic to boost the ailing UK economy ahead of the all important Christmas period. Spreading the cut over a number of months would have had much less of an impact as it can take many months for the benefits of a rate cut to filter down to consumers. This is especially the case now with banks being slow to pass on cuts to customers.Read full article... Read full article...