Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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...
Thursday, November 01, 2007
Factoring in the Fed Interest Rate Decision - Where to now for the US Dollar? / Interest-Rates / US Dollar
By: Regent_Markets
Wall Street leapt higher last week after the Federal Reserve calmed investors' fears about a sinking economy, implying that risks to the financial markets from the summer's credit crises have eased, says BetOnMarkets.com's Michael Wright.Read full article... Read full article...
Wednesday, October 31, 2007
US Fed Interest Rate Cut as Housing Bust Continues to Slow Economy / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
In line with market expectations the Fed cut US interest rates by 0.25% to 4.5% in an attempt to support the crumbling US housing market which continues to put a downward pressure on the US economy.Read full article... Read full article...
Wednesday, October 31, 2007
What is the VIX Directional Tendencay Indicator Prior to US Interest Rate Annoucement and Market Risk Analysis / Interest-Rates / US Interest Rates
By: Marty_Chenard
In this update, we will cover : 1.) What the VIX Directional Tendency Indicator is saying prior to Bernanke's announcement today. 2.) Part 2 of the Study on: What our Inverse Data Study is saying about market conditions and risk levels.
1.) The VIX (Volatility Index) is telling an interesting story as we wait for Bernanke's decision this afternoon.
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Tuesday, October 30, 2007
Are US Interest Rates Going to Fall on Wednesday? The Markets Certainly Thinks So / Interest-Rates / US Interest Rates
By: Donald_W_Dony
When the last Fed rate cut occurred, it set off a rapid chain reaction in all of the four markets; currencies, commodities, bonds and stocks. For example, the Canadian dollar jumped to par with the U.S. greenback, gold broke out of its 12-month consolidation, U.S. bonds reversed their three year slide and utilities started to climb again. Will the Fed cut the rates again at the next meeting on Wednesday? The markets are certainly suggesting that. Read full article... Read full article...
Thursday, October 25, 2007
More Subprime and CDO Banking Problems / Interest-Rates / Credit Crunch
By: David_Urban
Security pricing used to mean you checked your Bloomberg terminal or the Wall Street Journal for valuation prices. Now, pricing has become so complex that it has been broken down into 3 separate levels. The short version is that if you are pricing by Level 1, the security is being market to market and based on market prices. Level 2 is marking to matrix where prices are based on dealer-pricing based on surveys or market bids and offers. Level 3 pricing is based on marking to model which is based on models or managements best estimates.Read full article... Read full article...
Thursday, October 25, 2007
Bank of England Financial Stability Report - A Repricing of Risk Tests the Resilience of the Financial System / Interest-Rates / UK Banking
By: BoE
The Bank of England is today publishing its Financial Stability Report. This provides an initial assessment of the causes of the recent financial turmoil, lessons to be learnt and prospects ahead.Read full article... Read full article...
Wednesday, October 24, 2007
Banking Stocks Breakdown Signals Next US Fed Interest Rate Cut / Interest-Rates / US Interest Rates
By: Jim_Willie_CB
In late summer, my perceived strong signal for the September rate cut proved accurate. It was the dire condition of the Wall Street broker dealer stock index, the XBD. My contention all along has been that the official USFed rate cut was motivated by Wall Street giant banker interests, whereby the actual rescue stimulus was disguised and thoroughly devious. In reality it was a mammoth subsidy for Wall Street firms. They stood first in line at the Discount Window. No obvious recession was evident in the USEconomy, except for a housing retreat (better labeled a rout). Read full article... Read full article...
Sunday, October 21, 2007
FedWatch: Who's Going to Buy the Structured Investment Vehicle Asset Junk? / Interest-Rates / Credit Crunch
By: Anthony_Cherniawski
The backers of the proposed superfund being set up to buy assets from cash strapped structured investment vehicles (owned by banks) met last night. The presence of some $280 billion in leveraged debt vehicles is not only the source of new potential losses, but ties up funds from being lent in new, more profitable loans. These numbers are pretty much in line with the $251 billion of maturing asset backed commercial paper this week. In essence, these banks wish to slough off their mistakes and start afresh. But who's going to buy the stuff? Read full article... Read full article...
Sunday, October 21, 2007
The Shadow Banking System Rescuing the SIV Garbage / Interest-Rates / Credit Crunch
By: John_Mauldin
In this issue:
Taking Out the SIV Garbage
The Rhinebridge to Nowhere
The $100 Billion Superfund to the Rescue?
Don't Ask, Don't Sell
The Shadow Banking System
New Orleans, Houston and Old Friends
This week was not pretty for stocks. It all started off with the announcement of a special 80-100 billion dollar fund orchestrated by the US Treasury to bail out something called an SIV. Then Caterpillar gave negative guidance this morning, especially on its US business and the selling began in earnest. October 19 is still not a friendly day to the stock market 20 years later. But it was a great week for bonds. One-month treasury bills dropped 60 basis points in one day in a real flight to short-term quality, and the entire yield curve moved down substantially.
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Saturday, October 20, 2007
Asset Class Behavior Following Fed Interest Rate Cuts - Part 2 of 4 / Interest-Rates / US Interest Rates
By: Chris_Ciovacco
"The dollar has been sliding since the Fed last week cut interest rates by a larger-than-expected half percentage point. Since then, disappointing U.S. economic data have stoked expectations that another rate cut is on the way. Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.As the dollar sinks, consumers find imported products— Australian wines, Japanese cars or Chinese toys — are more expensive. "- Associated Press -09/28/2007 Read full article... Read full article...
Friday, October 19, 2007
Who Bought the US Treasury Bonds ? / Interest-Rates / US Bonds
By: Rob_Kirby
According to the U.S. Treasury – the latest TIC data [August] tells us the following:
Treasury International Capital (TIC) Data for August
Treasury International Capital (TIC) data for August are released today and posted on the U.S. Treasury web site ( www.treas.gov/tic ). The next release, which will report on data for September, is scheduled for November 16, 2007.
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Thursday, October 04, 2007
Central Banks Inflation Quandary As Gold Prices in More US Interest Rate Cuts / Interest-Rates / Inflation
By: Christopher_Laird
When the Fed cut the discount and target rates by .5% they tied the hands of some other central banks who have been wanting to raise rates. From China, to the Middle East, to the EU and then Japan, each has reacted in its own way as they find they have to take into serious consideration what the Fed does. Read full article... Read full article...
Tuesday, October 02, 2007
US Interest Rates Headed For 3.75% Over the Next 12 months / Interest-Rates / US Interest Rates
By: John_Mauldin
We are in a world far different than the one I learned about in economic text books. As I have written, the shadow banking system of hedge funds and CDOs, CLOs, PIPES, etc. have created a new financing economic reality far different than the traditional banking system was just 20 years ago. Does the Fed have the tools in its toolkit to deal with the new reality? Read full article... Read full article...