Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, June 13, 2017
The Everything Bubble, Return Of The Subprime Mortgage / Interest-Rates / Subprime Mortgage Risks
By: John_Rubino
This cycle’s main bubble is in government bonds and fiat currencies, with a dash of large-cap tech thrown in for variety. But like a hurricane spawning tornadoes at its periphery, this Money Bubble is creating secondary bubbles like student debt and subprime auto loans that are impressively destructive in their own right.
An example of how extreme things have gotten is US housing, which — as the previous decade’s main bubble — wasn’t supposed to be a problem this time around. But apparently no sector is immune from all that excess central bank liquidity. As today’s Wall Street Journal notes, the subprime mortgage is now being resurrected:
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Monday, June 12, 2017
Prepare for the Great Monetary Shift / Interest-Rates / Global Debt Crisis 2017
By: Dan_Steinbock
As advanced economies struggle with stagnation, one monetary era is about to change. After a decade of massive easing, the US Fed is hiking rates and moving to reduce its massive $4.5 trillion balance sheet. There are no historical precedents but there will be global repercussions.As the central banks of major advanced economies are pondering the shift from massive easing to gradual tightening, all other nations must adjust to these huge shifts, whatever their current status quo.
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Thursday, June 08, 2017
The Subprime 2.0 Debt Bubble is About to Burst / Interest-Rates / Global Debt Crisis 2017
By: Graham_Summers
As we’ve been outlining for weeks now, Subprime 2.0 is the subprime auto-loan industry. And just as the collapse in the subprime mortgage lending was what signaled the beginning of the housing crisis… trouble in the subprime auto-loan industry will be what signals that the next Debt Crisis is here.
Tuesday, June 06, 2017
US Interest Rate Curve Inversion and Chaos to Begin by December 2017 / Interest-Rates / US Interest Rates
By: Michael_Pento
The bounce in Treasury yields witnessed after the election of Donald Trump is now decaying in the D.C. swamp. If the Fed continues to ignore this slow growth and deflationary signal from the bond market and continues along its current rate hiking path, the yield curve will invert by the end of this year and an equity market plunge and a recession is sure to follow.
An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates. Why is an inverted yield curve so crucial in determining the direction of markets and the economy? Because when bank assets (longer-duration loans) generate less income than bank liabilities (short-term deposits), the incentive to make new loans dries up along with the money supply. And when asset bubbles are starved of that monetary fuel they burst. The severity of the recession depends on the intensity of the asset bubbles in existence prior to the inversion.
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Tuesday, June 06, 2017
Government Insolvency Gets Harder to Ignore / Interest-Rates / US Debt
By: MoneyMetals
Several U.S. states and the federal government are hopelessly insolvent. It’s something many bullion investors have known for years.
The real question is when this reality will pierce the mainstream illusion that deficits, and the crushing pile of debt which accompany them, don’t matter. That moment drew closer last week when ratings agencies downgraded Illinois state bonds to one notch above “junk” status.
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Monday, June 05, 2017
From the Era of Fed Interest Rates Easing to the Era of Tightening / Interest-Rates / US Interest Rates
By: Dan_Steinbock
After half a decade of ultra-low rates in the United States, the Fed is hiking rates and moving ahead to reduce its massive $4.5 trillion balance sheet. The consequences will reverberate across the world, including Asia.Before the Trump era, the Federal Reserve hoped to tighten monetary policy more often and aggressively than markets anticipated. But since November, US economic prospects have fluctuated dramatically, from the Trump trade to new volatility.
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Monday, June 05, 2017
Soaring Debt = Slow Growth = Even More Debt = Systemic Crisis / Interest-Rates / US Debt
By: John_Rubino
It’s just common sense: Borrow too much money and the weight of this debt makes it hard to do things that used to be easy. This truism is now (finally!) hitting home, and blame is being apportioned. A couple of recent examples:
Read full article... Read full article...Over The Last 10 Years The U.S. Economy Has Grown At EXACTLY The Same Rate As It Did During The 1930s
(Economic Collapse Blog) – Even though I write about our ongoing long-term economic collapse every day, I didn’t realize that things were this bad. In this article, I am going to show you that the average rate of growth for the U.S. economy over the past 10 years is exactly equal to the average rate that the U.S. economy grew during the 1930s.
Saturday, June 03, 2017
Can a Chart Pattern Help You Catch a Strong Bond Rally? Yes / Interest-Rates / US Bonds
By: EWI
Plus, find out about a dangerous flaw in a "buy-and-hold" stock market strategy
The Elliott wave model has helped investors catch market turns for eight decades.
As Frost & Prechter's Wall Street classic book, Elliott Wave Principle, says:
The Wave Principle is the best forecasting tool in existence. [It] imparts an immense amount of knowledge about the market's position … and its probable ensuing path.
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Thursday, June 01, 2017
Brace Yourself for The Debt Great Reset / Interest-Rates / Global Debt Crisis 2017
By: John_Mauldin
We are coming to a period I call “the Great Reset.”
As it hits, we will have to deal with the largest twin bubbles in the history of the world. One of those bubbles is global debt, especially government debt. The other is the even larger bubble of government promises.
These promises add up to hundreds of trillions of dollars. That’s vastly larger than global GDP.
These are real problems we must face. It will mean forging a new social contract. It will also require changes to taxes and the economy. I believe that within the next 5–10 years, we have to end the debt and government promises.
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Sunday, May 28, 2017
Subprime 2.0: Lending a $1 Trillion to People With No Proof of Job or Income / Interest-Rates / Financial Crisis 2017
By: Graham_Summers
SubPrime 2.0 is proving far worse than even we suspected.
If you’ve not been following this story, our view is that the auto-loan industry is Subprime 2.0: the riskiest, worst area in a massive debt bubble, much as subprime mortgage lending was the riskiest worst part of the housing bubble from 2003 to 2008.
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Thursday, May 25, 2017
The Yield Curve Is the Best Recession Indicator / Interest-Rates / Recession 2018
By: John_Mauldin
By Shannara Johnson : Every investor wishes he had a crystal ball. But there’s one thing, says David Rosenberg, chief economist at Gluskin Sheff, that has predicted imminent recessions without fail.
Speaking at the Strategic Investment Conference in Orlando, Florida, Rosenberg pointed out that since 1950, there have been 13 cycles where the Federal Reserve tightened interest rates… and 10 of them ended in recession.
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Tuesday, May 16, 2017
German - US Bond Market Spreads and Sentiment / Interest-Rates / Germany
By: Ashraf_Laidi
Putting aside hard and soft data, yield differentials continue to command FX markets as the German-US 10 year yield spread breaks above its 200-day MA for the 1st time since August to hit -1.90%. The story, however, is not only in the break of the average, but also in the fact that the formation of the spread consists of higher lows and higher highs since the December bottom, which is the same formation for EURUSD, gold and most "anti-USD" instruments.
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Tuesday, May 16, 2017
Ransomware Attack, Debt - You’d Think We’d Be A Little More Worried… / Interest-Rates / Global Debt Crisis 2017
By: John_Rubino
By now everyone with an Internet connection is aware of the “ransomware” attack that shut down hundreds of thousands of computers over the weekend.
The fact that the onslaught is just beginning — as the military-grade hacking tools developed by the NSA and recently leaked are weaponized by hackers and released into the wild — should, you’d think, be worrisome.
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Monday, May 15, 2017
Bernanke’s Confetti Courage / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
Former Fed Chairman Ben Bernanke’s book titled “The Courage to Act” is now available in paperback. This isn’t a surprise because, after all, his proclivity to print paper encompasses the totality of what his courage to act was all about. The errors in logic made in his book are too numerous to tackle in this commentary; so I’ll just debunk a few of the worst.
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Monday, May 15, 2017
The Fed’s Massive Debt Bubble in Picture Form / Interest-Rates / US Debt
By: Graham_Summers
As we’ve been outlining over the last few weeks, the auto-loan industry is increasingly looking like Subprime 2.0: the needle that will pop the credit bubble.
Since 2009, roughly 1/3 of all new auto-loans have been subprime. That in of itself is bad, but we are now discovering that the industry in general has a problem with fraud (shades of the Housing Bubble) as well.
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Thursday, May 11, 2017
What’s the Fed Factor in US Treasury Bond Yields? / Interest-Rates / US Bonds
By: Harry_Dent
I hate taxes.I don’t begrudge paying for a functioning government, it’s the dysfunctional favoritism that ticks me off.
This amorphous blob in Washington sucks dollars out of my wallet and then tells me not to worry about how it’s spent, even as I watch the government hand my dollars out like candy.
I’m still beside myself about General Motors.
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Tuesday, May 09, 2017
America Needs a Debt Cut Before a Tax Cut / Interest-Rates / US Debt
By: Michael_Pento
President Donald Trump has finally unveiled his broad blueprint for tax reform. Well, at least let’s call it a sketchy outline of one. It would take the top income tax rate for small businesses from 35% to 15%. Theoretically, a business that makes $500k in taxable income, which had been paying roughly $175k in Federal taxes, would then pay closer to $75k. This means our business in this example, which saved 100k in Federal taxes, would have to grow its taxable income to $1,166.666, or by 133% to provide the government with revenue neutrality.
Thursday, May 04, 2017
Debt is Financial Life – Nonsense! / Interest-Rates / Global Debt Crisis 2017
By: DeviantInvestor
Examine the picture below. The global economy thrives on debt and credit. We purchase essential products using debt/credit. The U.S. dollar bill is a debt of the Federal Reserve. All debt based assets have counter-party risk.
The St. Louis Federal Reserve publishes data on “Total Debt Securities” in $ millions. Note the rapid rise since 1971 after President Nixon encouraged rapid devaluation of the dollar.
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Saturday, April 29, 2017
Recall This US Bond Trader Chart? Here's What Happened / Interest-Rates / US Bonds
By: EWI
Our three recent Treasury Bond charts combine to show you trader sentiment, price action and important near-term turns and trends.
Thursday, April 27, 2017
Are UK Consumers Taking Too Much Debt? / Interest-Rates / UK Debt
By: Nicholas_Kitonyi
The UK lending market has benefited from the reduced lending rates after the interest rate was reduced to an historical low. The UK base interest rate was cut in half in August last year to 0.25% in a bid to stimulate economic growth and it has remained at this level for the last eight months. This affected the UK Prime Lending Rate, which fell to 1.25% from about 1.55% in July and has since remained fixed at this level.Read full article... Read full article...