Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, September 11, 2008
Perverse US Dollar Rally Prelude to Financial System Collapse / Interest-Rates / Financial Crash
By: Jim_Willie_CB
More crucial than ever, observers must take the broader perspective that avoids overhearing the party on Wall Street. They know not what they celebrate. It is their demise. They rejoice over the collapse of mortgage bonds and now the mortgage centrifuge with a big fat fanny. They rejoice over collapse of Lehman Brothers. They rejoice over the disaster du jour offered at the financial lunch table. In the past two months, a remarkable sequence of events has taken place regarding US$-based bonds. They have been called home , a demand to be brought back to US shores. Read full article... Read full article...
Wednesday, September 10, 2008
Fannie Mae/ Freddie Mac Takeover to Prevent Bond Market Armageddon / Interest-Rates / Credit Crisis 2008
By: Richard_C_Cook
Fannie Mae and Freddie Mac, the twin giants of the home mortgage industry, own or guarantee assets of $5.3 trillion, almost half of the $12 trillion housing market in the U.S. These assets have been disappearing in value due to the collapse of the housing bubble.
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Tuesday, September 09, 2008
Fannie and Freddie Bailout Destined to Fail as US Debt Doubles / Interest-Rates / Credit Crisis 2008
By: Money_and_Markets
Martin D. Weiss writes: With Sunday's announcement of the most massive federal bailout of all time, it's now official: Fannie Mae and Freddie Mac, the two largest mortgage lenders on Earth, are bankrupt.
Some Washington bigwigs and bureaucrats will inevitably try to spin it. They'll avoid the "b" word with vengeance. They'll push the "c" word (conservatorship) with passion. And in the newspeak of 21st century bailouts, they'll tell you "it all depends on what the definition of solvency is."
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Tuesday, September 09, 2008
Credit Default Swap Dealers the Big Winners from Fannie and Freddie Takeover / Interest-Rates / Credit Crisis 2008
By: Mike_Shedlock
Bloomberg is reporting 1.4 Trillion in Fannie, Freddie Credit-Default Swaps May Be Settled . Investors may be forced to settle contracts protecting more than $1.4 trillion of Fannie Mae and Freddie Mac bonds against default after the U.S. seized control of the companies in a bid to bolster the housing market.
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Monday, September 08, 2008
The Bailout of Fannie Mae and Freddie Mac / Interest-Rates / Credit Crisis 2008
By: Paul_J_Nolte
The official take-over of Fannie Mae and Freddie Mac has begun. Whether this is the beginning of the end or merely the end of the beginning is yet to be determined, however it is certainly the hope that this move will begin to calm the housing market and allow mortgage money to once again flow. The effect of money back into housing should put a floor in the housing markets, but those effects will only likely begin to show up in the data a few months from now.Read full article... Read full article...
Monday, September 08, 2008
US Treasury Bonds Rally Continues as Fannie and Freddie Nationalized / Interest-Rates / US Bonds
By: Levente_Mady
The US Treasury market has been stair-stepping higher since the middle of July. The US Long bond was within a whisker of its annual high on Friday immediately following the weaker than expected employment report. Canadian bonds also rallied in spite of disappointment with latest policy directives from the Bank of Canada.Read full article... Read full article...
Friday, September 05, 2008
Credit Crisis Shock Wave Hitting US Economy, Bonds and Stocks / Interest-Rates / Credit Crisis 2008
By: Jim_Willie_CB
Something big this way comes. Events will center upon the arch-nemesis of gold, the US Treasury Bond. Market interference is too huge, for bonds, for bank stocks, for the entire financial sector. Banking system structures are too broken. The pillars of the US Economy are all in deep trouble, with profound deficits and insolvency the rule of the day. See the USGovt federal deficit (growing fast), the trade deficit (chronically large), the housing negative equity (worsening gradually), and insolvent banks (worse each quarter, despite the denials). A massive shock wave is coming. In all likelihood plans are in place, with events already set in motion, as the plan is probably to be event driven. Read full article... Read full article...
Friday, September 05, 2008
US Treasury Bull Market Continues as Risks of Deflationary Crash Grow / Interest-Rates / Deflation
By: Mike_Shedlock
The US Treasury Bull market is still intact after 27 years. 30 Year Long Bond 1990-Present
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Thursday, September 04, 2008
Bank of England Keeps UK Interest Rates on Hold for Final Month? / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The pressure is building on the Bank of England to start cutting interest rates with immediate effect as the UK economy plunges over the edge of the cliff, taking with it any hopes of a labour election victory. During the weekend Gordon Browns Darling chancellor finally showed signs of cracking-up under the strain of continually toeing Gordon Browns party line of ignoring the financial and economic fundamentals by painting a repetitively rosy picture for the British economy and financial system. Read full article... Read full article...
Wednesday, September 03, 2008
Real US Interest Rates Are Too High / Interest-Rates / US Interest Rates
By: Mike_Shedlock
I am going to make a shocking statement. Here it is: Real interest rates are high. Before stating the basis for such a seemingly wild claim it is important to define some terms. In this case "real" means inflation adjusted. Of course this means we have to agree on the meaning of the word "inflation". For this discussion I am going to waver from my usual stance that "Inflation is an increase in money supply and credit" to something mainstream.
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Tuesday, September 02, 2008
US Bond Yields Fall as Economies Continue to Weaken / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market has been stair-stepping higher since the middle of July. The US Long bond is closing in on the top of its annual range as the summer draws to a close with the Labour Day weekend upon us. It is time to take deep breath and have a look at what the big picture looks like. Naturally, we are most interested in how this picture will impact interest rates going forward.Read full article... Read full article...
Thursday, August 28, 2008
Treasury Dull Range bound Holiday Season Trading / Interest-Rates / US Interest Rates
By: Levente_Mady
On the financial sector front, there is just no relief in sight. Credit spreads remain under pressure. The stock price of Fannie Mae and Freddie Mac continue to plunge. Swap spreads are wider again. LIBOR is trading and levels indicative of severe financial distress. The good news is that the rest of the market is hanging in there. The bad news is that the present distress in the financial space is likely to spread to other sectors soon.Read full article... Read full article...
Thursday, August 21, 2008
Will the Federal Reserve Bank Sink the Australian Economy? / Interest-Rates / Austrailia
By: Gerard_Jackson
Dr Stephen Kirchner figures that the Reserve should have acted sooner with respect to inflation. (Centre for Independent Studies Reserve Did Not Go Far or Fast Enough ). Unfortunately Dr Kirchner's article did nothing to illuminate the present inflationary situation and the role of interest rates. In fact, I got the distinct impression that he believes that monetary expansion[1 does not matter. This view was reinforced by his opinion that:
If the RBA's forecasts are right, then the Australian economy will need to slow dramatically by the end of this year, just to bring inflation back to the top of the target range by the end of 2010.
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Tuesday, August 19, 2008
US Money Supply and the Bond Market Blackhole / Interest-Rates / Money Supply
By: Rob_Kirby
With a show of hands, how many people really believe the U.S. Bureau of Labor Statistics when they report that inflation is running at 2 – 4 %?
I'm not seeing very many hands.
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Monday, August 18, 2008
US Treasury Bonds Range Trade Around 4% / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market streaked to 3 positive weeks in a row even after higher than expected inflation data.
On the financial sector front, write-offs have now exceeded $500 Billion. Conservative estimates from established organizations such as the IMF are forecasting the final tab to be over a trillion dollars. Meanwhile more pessimistic forecasters such as Nouriel Roubini are looking for double that figure by the time it is all done. The take away from this story is that the write-offs are nowhere close to being finished. The flavour of the past week was auction rate securities.
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Monday, August 11, 2008
Foreign Investors Growing Weary of US Junk Paper / Interest-Rates / Credit Crisis 2008
By: Captain_Hook
You Can Stiff Some Of The People Some Of The Time - But, you can't stiff all the people all of the time. To what do we refer? Answer: The likelihood that once the Beijing Olympics are over, because increasing defaults of US corporate paper / agency debt leave a worsening bad taste on foreigner's palates, demand for domestic sovereign debt is expected to wane at an accelerating rate, which would send bond yields (market rates) higher – possibly much higher.Read full article... Read full article...
Monday, August 11, 2008
US Treasury Bond Market Outlook / Interest-Rates / US Bonds
By: Levente_Mady
The Treasury market managed to make it 2 positive weeks in a row even in the face of a stronger stock market.
Last week it was Fannie Mae and Freddie Mac's turn to report losses that were out of this galaxy. Both of those stocks are now trading comfortably under $10 per share, but the Administration still maintains that there is no bailout necessary to save these mortgage behemoths. Credit spreads remain under pressure and liquidity is not improving. The Wall/Bay street analyst community is slow to react but the torrent of downgrades keep poring in as a result. On-going problems on this front are likely to support the bond market.
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Monday, August 11, 2008
Fed Failing to Get Credit Flowing / Interest-Rates / Credit Crisis 2008
By: Money_and_Markets
Mike Larson writes: It's no secret what the Federal Reserve — as well as Congress and the Bush administration — want. They want banks to open their wallets. They want lenders to keep the credit flowing. They want firms of all stripes to take the Fed's cheap money and DO something with it — make business loans, make mortgages, make car loans, you name it.
But the lenders aren't playing ball!
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Monday, August 11, 2008
Could Lower Commodity Prices Pave the Way to Steady Interest Rates? / Interest-Rates / US Interest Rates
By: Money_Morning
William Patalon III writes: With oil trading near a three-month low (and corn now at a four-month low), U.S. Federal Reserve policymakers may have just the ammunition they need to hold the line on interest rates for the foreseeable future - or at least until their Sept. 16 policymaking meeting.
On the other hand, threats of hurricanes in the Gulf of Mexico and geopolitical turmoil in Iraq, Turkey, Nigeria - and now the fireworks between Russia and Georgia - could spark a dramatic reversal in sentiment and renew fears of supply disruptions.
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Saturday, August 09, 2008
Czech Central Bank Cuts Interest Rates / Interest-Rates / Euro-Zone
By: Victoria_Marklew
As anticipated (see Daily Global Commentary, July 30: " Surging Central European Currencies: Running Out of Steam? "), the Czech central bank switched to easing mode yesterday, lowering its key repo rate by 25bps to 3.50% - the first actual cut in over four years. Governor Tuma noted that the Czech economy is in a "declining phase" and that a "bigger dampening" is now expected. The bank also lowered its GDP growth forecasts to 4.1% this year (prev. 4.7%) and 3.6% in 2009 (prev. 4.0%). Tuma also warned that he could not exclude another rate cut this year. The vote by the six-member policy board reportedly was unanimous.Read full article... Read full article...