Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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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Wednesday, November 07, 2007
UK Interest Rates Expected to be Kept on Hold at 5.75% at November's MPC Meeting / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England is expected to keep UK interest rates on hold at 5.75% at Thursday's MPC Meeting despite widespread calls for a cut in interest rates in the face of the latest rate cut in the US to 4.5%, down from 5.25% in September 07.Read full article... Read full article...
Tuesday, November 06, 2007
The Credit Markets Credit Crunch - Tragedy or Farce? / Interest-Rates / Credit Crunch
By: John_Mauldin
This week in Outside the Box we bring you the text of a powerhouse speech by Michael E. Lewitt, made at the The Bank Credit Analyst Conference last week. We have been discussing the current market turmoil in our weekly letters for quite some time, addressing the adverse effects of CLOs, (collaterized loan obligations), CDOs, (collaterized debt obligations), SIVs, (Structured investment vehicles), what have you, outlining the how these products among others have been instrumental to the market decline. Read full article... Read full article...
Monday, November 05, 2007
The Credit Cycle Peaks - The Worst Is Yet to Come / Interest-Rates / Credit Crunch
By: Dr_William_R_Swagell
“I don't think the worst is over. We are coming off the greatest lending bubble .…not housing bubble! ... in U.S. history . We will feel its impact for a very long time.” - Robert Arnott, CEO Research Affiliates . Read full article... Read full article...
Saturday, November 03, 2007
The US Fed, The Discount Interest Rate and Market Manipulation / Interest-Rates / US Interest Rates
By: Tim_Wood
In the wake of the recent Fed meeting and the worldwide attention that it seems to gather these days, I want to address once again the Fed and the Discount rate, but I also want to address manipulation.
First of all, I want to readdress the fact that despite popular opinion, the Fed follows the lead of the short-term credit markets. My Trend Indicator on my Fed model turned down in June, before the first rate cut occurred.
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Saturday, November 03, 2007
Why the Fed Will Keep Cutting US Interest Rates, Jobs Number is Really a Negative 211,000 / Interest-Rates / Credit Crunch
By: John_Mauldin
In this issue:
Why the Fed Will Cut and Cut Again
Payroll Survey Sausage
When a Positive 166,000 Jobs Number is Really a Negative 211,000
Round Two of the Credit Crunch
A Few Thoughts on Bias
New York, the Marines, and the Mavericks
The economy added 166,000 new jobs last month, almost double the average estimate. GDP for the US came in at a blowout 3.9% growth, well above trend. The Fed cut its rate by another 25 basis points, but many observers see language in the accompanying statement which they think suggests the Fed is done with cutting, at least for now, as the economy appears stronger.
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Friday, November 02, 2007
US 10-Year Yields Press to New Lows on Weakening Economy, Lift TLTs / Interest-Rates / US Bonds
By: Mike_Paulenoff
The strong upmove in the Lehman 20 Year T-note ETF (AMEX: TLT) suggests that notwithstanding this AM's strong Jobs Report, the bond market thinks that the economy is inherently weaker, and/or more vulnerable to the housing and credit crunch than most people think. Read full article... Read full article...