Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, November 02, 2008
Global Zero Interest Rate Policy and the "Impossible Economic Contraction" / Interest-Rates / Recession 2008 - 2010
By: Mike_Shedlock
The global race to ZIRP is on. Let's recap the state of affairs of the mad march to zero interest rates.
Bank of Japan Cuts Rate to 0.3%
In an attempt to fend off a prolonged recession, the Bank of Japan Cuts Rate to 0.3% .
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Sunday, November 02, 2008
LIBOR Unfreezing as Fed Takes Aggressive Action to Boost Economy / Interest-Rates / US Economy
By: Prieur_du_Plessis
CNNMoney.com: Bernanke discusses future of Fannie and Freddie “Federal Reserve Chairman Ben Bernanke said Friday that the federal government will need to continue to play a role in the future of the mortgage financing market.
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Saturday, November 01, 2008
Fed Desperate U.S. Interest Rate Measures / Interest-Rates / US Interest Rates
By: Tim_Wood
The Fed's action to either raise or lower rates has become a major focal point for the markets in recent years. It seems that the vast majority of the public believes that the Fed is actually controlling interest rates and as a result that they are controlling the credit and equity markets. For a week before the Fed meeting it seems that the entire global markets focus on “what the Fed is going to do.” Will they cut a quarter, will they cut a half or will they not cut at all? Then, after the meeting the talking heads and analysts sit around and try to analyze the meaning of their “Fed Speak.” This is a joke. I am about to show you the proof that the Fed follows the short-term credit market and that in reality they do not lead. The data simply does not support this widely held belief. I realize that this may come as a shock to you, but reality is what it is. The data speaks for itself. Read full article... Read full article...
Friday, October 31, 2008
Interest Rate Conundrum Heralds More Stock Market Distress / Interest-Rates / Stocks Bear Market
By: Money_and_Markets
Mike Larson writes: Step into my interest rate time machine for a minute, if you will. We're going back to February 16, 2005 — the day former Federal Reserve Chairman Alan Greenspan testified before the Senate Banking Committee.
The topic of the day was the broader economy.
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Friday, October 31, 2008
U.S. Fed Zero Interest Rate Policy Coming? / Interest-Rates / US Interest Rates
By: Mike_Shedlock
The Fed did not want to cut the Fed Funds Rate below 2%. And because Congress recently granted authority for the Fed to pay interest on reserves, Bernanke thought incorrectly that he could keep rates above 2%. So much for that academic theory. Now many are wondering if ZIRP (Zero Interest Rate Policy) is coming to the Fed. Read full article... Read full article...
Wednesday, October 29, 2008
U.S. Fed Anticipated 0.5% Interest Rate Cut / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
The main question is whether today's anticipated Fed rate cut will succeed in maintaining the current boost to global risk appetite, regardless of the size of the easing. Since the beginning of the market crisis 7 weeks ago, the Federal Reserve has proven more creative in its overall actions than surprisingly dovish in its rate cuts. At the last scheduled FOMC meeting, the Committee kept rates unchanged despite the collapse of Lehman Bros but offered a bridge loan to AIG. In keeping with current Modus Operandi, a 50-bp rate cut in the fed funds rate is the most likely scenario, while a 25-bp easing is more plausible than 75-bps. Read full article... Read full article...
Tuesday, October 28, 2008
Pullback in U.S. Treasury Bonds Appears Complete / Interest-Rates / US Bonds
By: Mike_Paulenoff
The large 6-week coil pattern in the Lehman 20-Year T-Bond ETF (AMEX: TLT) hit its 3rd coordinate on the high side last Friday at 100.00 (off of the 10/17 low at 93.02), and since has pulled back to this morning's low at 96.02, which represents a 60% correction of the 10/17-10/24 upleg. The strength off of 96.02 suggests strongly that the pullback is complete and is turning to the upside to enter a new upleg that will retest and likely hurdle resistance between 100.00 and 100.86 -- on the way to 102.00.Read full article... Read full article...
Tuesday, October 28, 2008
Global Economic Outlook Suggests Concerted Interest Rate Cuts / Interest-Rates / Global Economy
By: Prieur_du_Plessis
The financial panic that began in early September has been a body blow to global business confidence and the global economy which, according to the Survey of Business Confidence of the World conducted by Moody's Economy.com , is now in recession.
How bad is the shape of the US and global economy?
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Thursday, October 23, 2008
Mortgage Interest Rate Resets May Fuel LIBOR Market Manipulation / Interest-Rates / Credit Crisis 2008
By: Money_Morning
Shah Gilani writes:It's panic time for U.S. legislators, regulators, banks and lenders. More than $24 billion worth of adjustable-rate mortgages (ARMs) are expected to “re-set” to higher interest rates in November – boosting the likelihood of further home foreclosures.
And it gets worse. That increase in borrowing costs will spread to other parts of the global debt market, representing an across-the board threat to corporate, institutional and sovereign borrowers. If interest rates remain high and interbank lending remains tight, the credit crisis is not likely to recede.
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Wednesday, October 22, 2008
Investment Opportunities in Municipal Bonds? / Interest-Rates / US Bonds
By: Richard_Shaw
The $2.66 trillion municipal bond market is embroiled in the overall credit market mess, creating an unusual complex of risks and opportunities.
The supply-demand forces in the municipal bond market have been unfavorable in the past year, causing prices to decline.
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Tuesday, October 21, 2008
Keynesian Economic Claptrap From PIMCO / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
The amount of total nonsense currently circulating on the so called Paradox of Thrift is staggering. The paradox: An increase in saving, which is generally good advice for an individual during bad economic times, can actually worsen the macroeconomy causing a reduction in aggregate income, production, and paradoxically a decrease in saving.
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Tuesday, October 21, 2008
How LIBOR Threatened to Destroy the Global Banking System / Interest-Rates / Credit Crisis 2008
By: Money_Morning
Martin Hutchinson writes: largest financial crisis since the Great Depression has revolved around an interest rate that many U.S. investors are only now hearing about for the very first time: The London Interbank Offered Rate (LIBOR).
But if you understand that rate, and study the forces that have been influencing it, chances are very good that you can figure out how we can escape the current banking-sector mess without wrecking the entire world economy.
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Sunday, October 19, 2008
The Mechanism Of Capital Destruction / Interest-Rates / Credit Crisis 2008
By: Professor_Emeritus
Address at the Annual Dinner of the Committee for Monetary Research and Education, CMRE
on October 16, 2008
New York City
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Friday, October 17, 2008
Why Mortgage Interest Rates Are Rising Despite Government Actions! / Interest-Rates / Credit Crisis 2008
By: Money_and_Markets
Mike Larson writes: The government is throwing everything … and I do mean EVERYTHING … at the credit and mortgage markets.
It has taken over Fannie Mae and Freddie Mac.
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Thursday, October 16, 2008
Debt vs Interest Rates Conundrum / Interest-Rates / US Debt
By: Michael_Pento
I've written before about the dramatic rise in fixed income rates that face investors in the very near future due to the funding issues associated with our entitlement programs coupled with the incalculable measures taken by the government in the past few weeks to stem the credit crisis. Those efforts ensure the amount of Treasury issuance will explode. Read full article... Read full article...
Wednesday, October 15, 2008
U.S. Forcing Banks to Resume Lending at Bazooka Point / Interest-Rates / Credit Crisis Bailouts
By: Mike_Shedlock
For now, you can force banks to take money, but you can't force them to lend it. Let's explore this theory starting with a look at the Drama Behind a $250 Billion Banking Deal .
The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.
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Tuesday, October 14, 2008
US Treasury Bond Market Crash / Interest-Rates / US Bonds
By: Money_and_Markets
Martin here with an urgent update on these wild, wild markets.
The key factor many investors seem to be forgetting: While stock markets have enjoyed a historic rally, bond markets are suffering a dramatic decline.
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Tuesday, October 14, 2008
Treasury Bonds ETF Inverse Trend to Stock Market Indices / Interest-Rates / US Bonds
By: Mike_Paulenoff
To some degree, the TLTs (Lehman 20 Yr T-bond, ETF) trades inversely to the equity indices like the SPYs (for instance); however, my sense is the recent upside explosion in the stock averages and the recent plunge in TLT prices have "corrected" and defused the bulk of that relationship, which if accurate, means that a new relationship is forming based less on flight-to-safety and more on the still-challenging (to put it mildly) economic fundamentals that will not be corrected any time soon. Read full article... Read full article...
Monday, October 13, 2008
How Credit Crises Begin and End / Interest-Rates / Credit Crisis 2008
By: Clif_Droke
From the standpoint of investor sentiment the credit crisis has reached the point of maximum saturation. Every TV news program and political commentator, every newspaper and every magazine in town is writing about it. It is being depicted as a virtual apocalypse that can't be stopped. For example, the headline for the latest cover of Time magazine reads: "The New Hard Times.” It features a photograph of a soup line from the Great Depression. Read full article... Read full article...
Monday, October 13, 2008
Rising Bond Yields Despite Interest Rate Cuts / Interest-Rates / Credit Crisis 2008
By: Levente_Mady
The bond market traded sharply lower last week despite the ever intensifying turmoil in world financial markets. The Treasury decided to auction a special $40 Billion 10 year Notes to ease the demand for Treasury paper in the bond market. So all of the sudden it appears that in spite of the safe haven qualities of US Treasury Bonds and Bills, the market has realized that with all the government bailouts and guarantees, there will be no shortage of government bonds going forward. Read full article... Read full article...