Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Monday, October 01, 2007
NOLTE NOTES Was the Fed Too Hasty to Cut Interest Rates ? / Interest-Rates / US Interest Rates
By: Paul_J_Nolte
What a quarter – from the heights to the depths and back again, the quarter ended with the SP500 up a modest 1.5%, barely above the rate earned on bonds with a lot less gray hairs. Yields fell during the quarter, with short rates falling a full percentage point, while long-term bonds dropped a quarter percent. The news last quarter has been splashed all over the media – from liquidity crisis to real estate blues to just maybe a recession. But the money management business is never about what was done yesterday – what are y'all doing for me lately?Read full article... Read full article...
Monday, October 01, 2007
Central Banks, Interest Rates and Stock Market Fluctuations / Interest-Rates / Credit Crunch
By: Gerard_Jackson
The shortage of capital at the end of the boom period is a sign that the credit system has put its last reserves into the firing lines in order to support the wavering front. (Wilhem Röpke Crises and Cycles , William Hodge and Company Limited, 1936, p. 100)Read full article... Read full article...
Monday, October 01, 2007
Why the Fed's US Interest Rates Policy Will Fail / Interest-Rates / US Interest Rates
By: Gerard_Jackson
It was only it was last August that I told readers not to be surprised if the fed cuts the funds rate. (US financial markets rocked — what is really happening ). Lo and behold, on September 18 the fed cut by 50 bps, reducing the funds rate to 4.75 per cent. The cut immediately ignited share prices, with the Dow Jones industrial average surging by 335 points. The only surprising thing is that anyone was actually surprised. That the first effect of a credit expansion is usually felt on the stock market seems to have eluded the commentariat 1 .Read full article... Read full article...
Monday, October 01, 2007
UK Interest Rates Expected to be Kept on Hold at October MPC Meeting as House Prices Flat line / 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 Thursdays MPC Meeting. Confirming forecasts that UK Interest rates have now peaked.Read full article... Read full article...
Thursday, September 27, 2007
The Concept of Risk has Been Forgotten - Buffett's Dictum & Your Margin of Safety / Interest-Rates / Risk Analysis
By: Adrian_Ash
"...Risk has been abolished – a concept even the TV news anchors can grasp..."
"IF YOU UNDERSTOOD a business perfectly and the future of the business, you would need very little in the way of a margin of safety," said Warren Buffett at Berkshire Hathaway's annual meeting in 1997.
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Tuesday, September 25, 2007
The Federal Reserve's Interest Rate Cut Does Not Help Americans / Interest-Rates / US Interest Rates
By: Axel_Merk
In our assessment, the Federal Reserve's (Fed's) interest rate cut was wrong. Forget about the “moral hazard” of whether the cut would plant the seeds for further bubbles. Lowering interest rates is wrong because it will do few any good, but cause many a lot of harm.Read full article... Read full article...
Monday, September 24, 2007
NOLTE NOTES The Halo Effect Continues from the US Interest Rate Cut / Interest-Rates / US Economy
By: Paul_J_Nolte
The Fed surprised many in the markets and cut rates half of one percent (50bp) and the equity markets cheered to the tune of 400 Dow points. Either the Fed is VERY interested in heading off recession or there is more bad news ahead that they would like to be able to cut off before it built too difficult to overcome. The inflation news was certainly good – enough to provide the additional cover for the Fed to cut by 50bp. The housing numbers reported last week were certainly very poor and combined with a few corporate reports (FedEx and Circuit City) indicating that the consumer remains inthe struggling mode.Read full article... Read full article...
Monday, September 24, 2007
US Bonds Collapsing! Foreigners Abandoning the US Dollar! / Interest-Rates / US Dollar
By: Money_and_Markets
Martin Weiss writes: If you thought the dollar's collapse would not affect you, think again! Here's what's happening:
First, U.S. bond prices are collapsing: In the two days after the Fed's rate cut, the price of the long-term Treasury bond plunged more than two and a half points, including the worst single-day plunge since September of 2003. This means bond yields, which move in the opposite direction, have surged.
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Saturday, September 22, 2007
Did the Fed Interest Rate Cut Fix the Credit Crunch Problem? / Interest-Rates / Credit Crunch
By: Tim_Wood
Or, Are Their Actions a Sign of a Bigger Problem?
I have said before in my newsletters that the Fed's biggest fear is deflation and I believe that the move earlier this week proves that point. As the stock market began to decline in August the Fed began extending the discount window, encouraged banks to come to the discount window, and cut the discount rate. I reported here a couple of weeks ago that based upon the 3-month T-bill rate and my Trend Indicator that we have entered into an environment in which lower short-term rates should prevail. So, the fact that a cut was made came as no surprise. But, the shock was that the Fed cut both the Discount rate and the Fed funds rate by a half point. In my opinion, this was a drastic measure and it serves to show the Fed's true colors and it absolutely confirms that they are scared to death of deflation.
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Friday, September 21, 2007
Feds Interest Rate Cut to Ignite Inflation As Dollar Collapses - The Worst Fed Move in History! / Interest-Rates / Inflation
By: Peter_Schiff
Helicopter Ben Earns His Wings: Coming at a time when rate increases were needed to combat the sinking dollar and surging gold, oil and other commodity prices, Ben Bernanke’s 50 basis point cuts in the Fed funds and discount rates this week may go down as the most irresponsible move in Fed history.Read full article... Read full article...
Wednesday, September 19, 2007
Bank of England Rocked by Banking Crisis, Mervyn King Ponders Resignation After BoE Climb-down / Interest-Rates / UK Banking
By: Adrian_Ash
Political Ravishment! Or, a Tale of Two Bankers "...O you villain! Have I kept my honor so long to have it broke up by you at last...?"
THE OLD LADY'S in danger, and not for the first time. As a political cartoon by James Gillray reminds us each morning, hung by the door here at BullionVault , the Bank of England's virtue came under attack in the late eighteenth century.
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Wednesday, September 19, 2007
Fed's Half-point Cut Sign of Desperation! Next ... / Interest-Rates / US Interest Rates
By: Money_and_Markets
Martin Weiss writes: Yesterday, in our Monday issue of Money and Markets , we told you about the massive and unanimous pressures on Fed Chairman Ben Bernanke to cut interest rates by a half point — the desperate demands of home builders, the panicky screams from mortgage lenders and the wailing cries from Wall Street.Read full article... Read full article...
Tuesday, September 18, 2007
UK Interest Rates Forecast to Fall to 5% by September 2008 / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The most recently released inflation data shows UK CPI Inflation falling to 1.8% and RPI rising to 4.1% for August. Even though the picture is mixed, the slowing UK housing market and economy is expected to result in further moderating of the inflation picture over the next 12 months, which is to result in a fall in UK interest rates to a target of 5% by late 2008.Read full article... Read full article...
Tuesday, September 18, 2007
Can the Fed Save You From the Credit Crunch? and What to do to Protect Yourself / Interest-Rates / Credit Crunch
By: EWI
The Federal Reserve's rate cut is dominating the news, as did recent Fed injections into the market. And the media continues to hold its collective breath each time Bernanke meets or prepares for an announcement.Read full article... Read full article...
Tuesday, September 18, 2007
Fed Cuts US Interest Rates to 4.75%, Dollar plunges, Stocks Soar / Interest-Rates / US Interest Rates
By: Sarah_Jones
The US interest rates were cut by 0.5% to 4.75%. The market was already pricing in expectations for 0.25%.
US Stocks rallied strongly on the news with Dow Jones Index rallying more than 300 points on the news to above 13,700 into the last hour of trading.
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Tuesday, September 18, 2007
How What the Fed Does, Doesn't Matter - The Apposite Economy / Interest-Rates / US Economy
By: Paul_Petillo
President Bush we now know is “Damn Certain”. Alan Greenspan, retired Fed Chairman now turned economic rabblerouser released his new memoir on Monday that could have been subtitled “Damn Certain too”. Ben Bernanke, the current Fed chairman and according to the two previously mentioned gentleman is doing a fine job, possibly a heckuva one, will no doubt publish his account one day of what is happening to the economy with a subtitle, “Damn Certain As Well”. These are, it seems, the only three people in America certain of anything and if that is the case, we are in more serious trouble than previously thought.Read full article... Read full article...
Monday, September 17, 2007
Net Commericials and the FOMC Interest Rate Meeting / Interest-Rates / US Interest Rates
By: James_West
Everybody is anticipating next week's FOMC decision on federal funds target rate, due this Tuesday, Sept. 18. As of last Friday, according to the 30-day Federal Funds futures, there is a 42% probability of a 25-basis point rate decrease versus a 58% probability of a 50-basis point rate decrease. In other words, a rate-cut is priced into the market already. The only question is: will the Fed cut by 25-basis points or 50-basis points. From the Funds futures, we are leaning towards a 50-basis point cut, but only slightly.Read full article... Read full article...
Monday, September 17, 2007
Bernanke's No-Win Interest Rate Decision / Interest-Rates / US Interest Rates
By: Money_and_Markets
Martin Weiss and Mike Larson write: We feel sorry for Ben Bernanke. He didn't create the sputtering, explosion-prone tanker truck he's trying to maneuver.
Nor did he get any training on how to shift gears.
But he's certainly getting plenty of not-so-subtle prods and catcalls from a diverse group of back-seat drivers.
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Monday, September 17, 2007
Bernanke and US Interest Rates - Between A Rock And A Hard Place / Interest-Rates / US Interest Rates
By: Captain_Hook
Bernanke is an academic, and he acts like one, relying on the safety of flawed models all too often. And all too often, it could be argued this is keeping him behind the curve in terms of official measures, looking at backward indicators in setting future policy. Greenspan on the other hand operated more like he came from the school of hard knocks (like a streetwise gangster), where some (neocon types) would argued he had a real feel for what need be done, and was customarily ahead of the curve in official policy measures, or backroom deals for that matter, whatever would get the job done. Read full article... Read full article...
Saturday, September 15, 2007
Tightening Money - US Interest Rate Cut Not a Done Deal / Interest-Rates / US Interest Rates
By: Brian_Bloom
Its one thing for the Central Bank to “liquefy” the commercial banks, it's another for the commercial banks to on-lend their cash.
Right now, the commercial banks are so nervous about what is unknown regarding the depth of the sub-prime mortgage debacle that they are not even lending to each other. That's why the Libor rate (London Interbank Offer Rate) has spiked.
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