Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, December 06, 2007
Credit 'Crunch' or Credit Collapse? / Interest-Rates / Credit Crunch
By: Alex_Wallenwein
How can you protect yourself during the worsening credit crunch?
To figure that out, we first need to understand what this 'credit crunch' really is, from the most fundamental perspective possible. For, it's root cause is not the sub-prime mortgage default crisis as financial pundits like to claim. It goes far, far deeper than that.
We all know by now that the entire world financial structure is dependent on one thing, and one thing only. That one thing is the very brick from which the splendid looking but dangerously tilting edifice is constructed:
Monday, December 03, 2007
Popeye Paulson To Bailout SIV's and Subprime Mortgages But Without Constructive Workable Policies / Interest-Rates / Subprime Mortgage Risks
By: Brady_Willett
Treasury Secretary Henry Paulson was trying to strong-arm the supposedly free markets again last week, this time catching headlines for his fronting of the government's proposal to temporarily freeze interest rates on some troubled subprime mortgages. You have to give Mr. Paulson credit for having the bluster to constantly make media appearances – first to dispel contagion fears, then to announce that he was helping banks set-up an SIV bailout, and now to provide an update on his subprime bailout plans. At the same time, you have to give the media very little credit* for questioning both his tactics and his apparent lack of results. Of course juggling two Treasury coordinated bailouts at the same time is no simple task. Most immediately there are the tactical concerns associated with directing Citigroup representatives to the right conference room – we can only imagine the reception desk querying new arrivals as if they were diners at a low-end stake-house: ‘are you here for the SIV or subprime bailout?'Read full article... Read full article...
Monday, December 03, 2007
US Interest Rate Cuts To Not Show In Economic Data Until Late 2008 / Interest-Rates / US Economy
By: Paul_J_Nolte
The last three weeks really just didn't count as far as the markets were concerned. Never mind the multiple 200+ down days for the Dow, the multiple 200+ up days or the many “key” 9 to 1 volume days on both up and down days, as the markets are right where they were on November 7 th , before all the bad (and good) stuff happened. The housing and sub-prime issues continue to pervade trader's thoughts and actions and until an infusion of cash to Citigroup, investors felt we were on the cusp of a financial meltdown. Comments from Fed officials in advance of their meeting on the 11 th also indicated they stood at the ready to cut rates further to avoid further erosion in the economy.Read full article... Read full article...
Monday, December 03, 2007
Catch-22 for US Fed and Global Economy On Interest Rates / Interest-Rates / Global Financial System
By: Captain_Hook
What can I tell you, but I told you so. Finally, Europeans are waking up to the fact cake eaters on Wall Street intend to devalue their way out of their problems, as forecast here on these pages recently. This is because it's really beginning to hurt, and it now appears the US intends to make the currency trade a one way event in postponing any pain like the stock market.
The only problem with this brand of thinking, if you can call what price managers are doing these days thinking, is a good old-fashioned currency crisis , which should go a long ways in waking up slumbering societies around the world in turn, along with keeping gold in the forefront. This should become even more apparent today with Bernanke speaking, where already yesterday a panicky Fed was pandering the mob by hinting at lower rates.
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Friday, November 30, 2007
The Bernanke Interest Rate Cycle, Age of Turbulence and Pavlov's Dog / Interest-Rates / US Economy
By: Tim_Iacono
Well, the big news yesterday was that Federal Reserve Vice Chairman Donald Kohn "opened the door" to more interest rate cuts by the Fed and, as a result, equities rallied.
Like Pavlov's dogs it seems.
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Thursday, November 29, 2007
The Fed Fails to Comprehend the Problems Facing US Economy and Dollar / Interest-Rates / US Economy
By: Alex_Wallenwein
US Fed vice-chairman Donald Kohn is in a quandary.
I'm sure he's not alone. It's just that he happened to be tasked with making a set of statements that would have been far too embarrassing for Bernanke to make. That is especially so after Ron Paul publicly slapped him with his own ledger book, so to speak.
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Wednesday, November 28, 2007
Western Economies Hit by Dual Shocks of Rising Commodity Prices and Financial Market Credit Crisis / Interest-Rates / Inflation
By: Adrian_Ash
"...You can either bail out the big banks with a flood of cheap money, or you can keep a lid on inflation. You can't do both, not according to history. And sometimes – like now – you'll be hard put to achieve either..."
"THE ECONOMY has been hit by two shocks," said Andrew Sentance, a Bank of England policymaker, in a speech on Tuesday night.
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Tuesday, November 27, 2007
US Subprime Mortgages Lead to a Subprime US Dollar / Interest-Rates / Subprime Mortgage Risks
By: John_Lee
Last Thursday, according to Financial Times, Mr Bernanke told Congress he would support raising the limit on the size of the individual loans eligible for securitisation by the government-sponsored mortgage finance entities from $417,000 to $1m (€680,000, £475,000) on a temporary basis.
He suggested that Fannie and Freddie could pay insurance premiums on these loans to the federal government, which would "act as guarantor" by taking on some of the credit risk.
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Tuesday, November 27, 2007
The Next Subprime Dominos to Fall: Junk Bonds and Hedge Fund Risk Insurers / Interest-Rates / Credit Crunch
By: John_Mauldin
The subprime problem, we were told, would not spread to other markets. It would be "contained." And it has, according to Jim Grant. He quipped last week that it has been contained on planet Earth. The risks coming from rising defaults in the US (now above 600,000 and rising from just 200,000 a few years ago) are clearly spreading to markets far beyond the subprime world.
This week's Outside the Box talks about the next two dominoes that could fall: junk bonds and counterparty risk in the various credit default swap markets. Ted Seides is the Director of Investments at Protégé Partners, LLC, a hybrid fund of funds that invests in and seeds small, specialized hedge funds. He writes this week's piece in Peter Bernstein's Economic and Portfolio Strategy, one of the most respected of market analysis letters. You can learn more about the letter at www.peterlbernsteininc.com.
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Tuesday, November 27, 2007
US Treasury Bond Market Rockets As Yields Drop Sharply on Flight to Safety / Interest-Rates / US Bonds
By: Mike_Paulenoff
The bond market is going wild again on the upside, thereby pressing 10 year T-note yield to 3.94% from Friday's close at 4.01%, while the 2 year T-note is yielding 3.04%... Let's take a look at the TLT's (Lehman 20 year T-bond ETF)...Read full article... Read full article...
Monday, November 26, 2007
Subprime Credit Crunch Continues to Go Global - Hitting French Bank Natixis / Interest-Rates / Credit Crunch
By: Nadeem_Walayat
The credit crunch continues to ripple out across the global financial sector with banks outside of the US just as badly hit as those within the US. Today's turn is the French Bank Natixis (Frances fourth largest bank) which declared that it has been hit hard by its exposure to the US subprime mortgage market. Making bad debt provisions of $600 million against its CDO portfolio in its third quarter results.Read full article... Read full article...
Saturday, November 24, 2007
Drop In US Long Term Interest Rates Manipulated By Fed Open Market Operations / Interest-Rates / Market Manipulation
By: Alex_Wallenwein
Straight from the Horse's, Uhh ... Mouth Ben Bernanke told us five years ago he would inflate to no end. Now he's making good on his word.
Ever wondered why long term interest rates are so conveniently falling in sync with the official need to avoid troubled-loan ARMs to reset significantly higher in early 2008?
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Thursday, November 22, 2007
Bank of England Minutes Of November Monetary Policy Committee Meeting / Interest-Rates / UK Interest Rates
By: BoE
These are the minutes of the Monetary Policy Committee meeting held on 7 & 8 November 2007. The Bank of England Act 1998 gives the Bank of England operational responsibility for setting interest rates to meet the Government’s inflation target. Operational decisions are taken by the Bank’s Monetary Policy Committee. The Committee meets on a regular monthly basis and minutes of its meetings are released on the Wednesday of the second week after the meeting takes place. Accordingly, the minutes of the Committee meeting held on 5 and 6 December will be published on 19 December 2007.Read full article... Read full article...
Monday, November 19, 2007
NOLTE NOTES - Bond Market Rallies Despite Rising Inflation, Stocks to Buck Season Trend and Head Lower / Interest-Rates / US Bonds
By: Paul_J_Nolte
The inflation figures released last week did little to derail the bond rally of the past few months. While it was in-line with expectations, the year-to-year inflation figures are running higher than many are comfortable with and as such, expect that the Fed is not going to cut rates that is already factored into the market. This holiday week, we'll get some housing data that many are hoping will indicate that housing is beginning to stabilize.Read full article... Read full article...
Saturday, November 17, 2007
Rush For Treasury Bonds Safety As Risks Rise At Cash Money Market Funds / Interest-Rates / US Bonds
By: Anthony_Cherniawski
Certain “yield enhanced short term bond funds” which have been offered as higher yield substitutes for money market funds have been feeling the pinch from the credit markets. The latest victim is a company that you'd not normally think of as a finance company, General Electric Company. “The diversified manufacturing company's money management arm, GEAM, which oversees the $5 billion GEAM Trust Enhanced Cash Fund, is still invested in the fund, but GE warned last week that it would sell holdings amid tough market conditions. Read full article... Read full article...
Saturday, November 17, 2007
Treasury Bonds Real Interest Rates Go Negative as Yields Dip Below Inflation on Panic Safe-haven Buying / Interest-Rates / US Bonds
By: Adrian_Ash
"...Hardly anyone's noticed, but the frenzy of safe-haven bond-buying has just pushed real yields on US Treasuries below zero..."
IT'S BEEN A TOUGH WEEK for anyone Buying Gold just below its all-time record high of $850 per ounce last Friday.
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Thursday, November 15, 2007
Strong Uptrend in US Treasuries Suggesting Recession - Long Lehman 20-Year T-Bond ETF / Interest-Rates / US Bonds
By: Mike_Paulenoff
One very curious aspect of the powerful upmove in the equity market during the past 24 hours is the lack of opposite selling pressure in the bond market and Lehman 20-year T-note ETF (AMEX: TLT). If in fact last week's plunge in equities (into yesterday morning) aroused fears of an implosion, and with it a flight to safety in the bond market, then removal of such fears might be expected to reverse or eliminate the flight-to-safety premium. From the look and the behavior of the TLT's today, I have to wonder what is preserving the buoyancy of the long end of the Treasuries?Read full article... Read full article...
Tuesday, November 13, 2007
Understanding the US Credit Crunch of 2007 / Interest-Rates / Credit Crunch
By: John_Mauldin
This week in Outside the Box I strive to address an issue that I have been meditating on for quite some time. Precisely, how have we arrived at the current credit crisis that now threatens the domestic and global economy. I believe one of the underlying reasons is what is termed the "Minsky Moment," the topic of this weeks Outside the Box. If we understand how we have arrived at this crisis, we may get some clues as to how it will unfold. I am going to take up other thoughts on this topic next Friday. Read full article... Read full article...
Saturday, November 10, 2007
US Fed Buying Bad Debt to Halt Credit Crunch - Headlines in Disguise / Interest-Rates / Credit Crunch
By: Andy_Sutton
Scanning a newspaper or watching the news recently seem more like a covert operation with secret codes and cryptography than anything resembling factual news. In fact, more than once, I have felt compelled to dig through cereal boxes in search of one of those plastic decoder rings that were so popular when I was young. Read full article... Read full article...
Friday, November 09, 2007
Financial's Burning As CDS and Municipal Bond Markets Explode - Fingers of Instability, Part 12 / Interest-Rates / Financial Crash
By: Ty_Andros
In This Issue – 4 Fingers of Instability
- Broad Fires in Financial's and the Prescriptions You Can Count On
- Next Shoe to Drop, “CDS” and Municipal BOMB Market!
- Generals Retreat!
- Sheer Insanity
Last week was a veritable avalanche of illusions presented to the public as FACTS. Anyone who invests predicated on these HEADLINES is DOOMED. The markets gave clear fingerprints of the true stories as did the internals of the reports provided with the headline numbers. Volatility was and is front and center providing huge opportunities for prepared investors. These moves are in their infancy, as are the financial authorities who are just beginning to understand the enormity of the task in front of them in repairing the credit markets as the dominoes just keep falling. This volatility was extremely destructive to poorly prepared portfolios. Which side of this divide are you on?
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