Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Wednesday, October 12, 2016
Is The Fed Delaying The Day Of Reckoning? / Interest-Rates / US Federal Reserve Bank
By: Chris_Vermeulen
The FED and the Corporate World understand that there is NO economic recovery. They need to keep feeding this ‘bull market’ with plenty of accommodative easing or this ‘bull’ will die. The FED will do whatever it takes to maintain this by cutting rates to near zero and below so as to spruce up the economy. However, these conventional policies that are being applied, by the FED, will not work seeing as the ‘deflationary forces’ have gained momentum. Global economies cannot sustain rate hikes. They will continue to use ‘expansionary monetary policy’, indefinitely: (https://finance.yahoo.com/n...).
Monday, October 10, 2016
Bubble Blind Central Bankers / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
Fed Head Janet Yellen is keeping alive the tradition of her predecessors, Messrs. Greenspan and Bernanke, by showing she is equally as blind-sighted to the bubbles central banks are blowing in the bond and equity markets. During her September press conference, Ms. Yellen stubbornly clung to the misconception that it is only possible to tell if a bubble exists after it bursts. And because of this delusion, in Yellen's eyes ninety-six months of a virtual Zero Interest Rate Policy (ZIRP) is merely, and I quote, "a modest degree of accommodation." Her blinders are so opaque that she claims to see, "no signs of leverage building up." And her feckless ability to spot market imbalances even resulted in this doozy of a Yellen quote: "In general, I would not say that asset valuations are out of line with historical norms."
Sunday, October 09, 2016
World Gone Mad: Credit Bubble “Perpetual Preferred” / Interest-Rates / International Bond Market
By: John_Rubino
Towards the end of a credit bubble, ideas that might have seemed crazy in more boring times are not just accepted but embraced by investors desperate to keep the high that comes from effortless bull-market profits.
In the junk bond bubble of the late 1980s, for instance, there was the “PIK preferred,” a kind of stock/bond hybrid that paid its holders in more securities (PIK stood for “payment in kind”). Companies could issue them with zero near-term cash flow consequence while credulous investors bought them for their “high yields.”
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Tuesday, October 04, 2016
WARNING: the Bond Markets Are Signaling Something MASSIVE is Coming / Interest-Rates / Financial Crisis 2016
By: Graham_Summers
To understand the financial markets, you need to understand the hierarchy of asset classes.
That hierarchy is as follows:
Globally, the stock market is about $69 trillion in size, trading about $191 billion in shares per day.
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Monday, October 03, 2016
An Interest Rate Hike Would Be Ugly for US Bonds / Interest-Rates / US Bonds
By: John_Mauldin
BY JARED DILLIAN : I’ve taken bond math classes out the wazoo. The best of them was in the summer of 2001 at Lehman Brothers. Lehman Brothers wasn’t going to teach a bad bond math class, not at the firm that became synonymous with bond trading itself. I was ready to start whipping ‘em around. Pity I ended up in stocks.
Now, the tables have been turned, and I am the old, wizened professor, dropping some knowledge on the younger generation. I occasionally teach finance to MBA students, and there are a couple of chapters on bonds where the students have to get their calculators out.
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Monday, October 03, 2016
Out-of-Touch Fed Is Hurting the Average American / Interest-Rates / US Interest Rates
By: John_Mauldin
BY PATRICK WATSON : For the world’s top central banks, “the blind leading the blind” isn’t just a proverb. It’s reality.
A European Central Bank official recently said the ECB wants our Federal Reserve to hike interest rates in December. Why is that? In their twisted minds, it will confirm that years of monetary insanity actually worked.
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Friday, September 30, 2016
The Fed Is Leading Us to Economic Hell / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
The Fed argues that low rates have worked. The economy emerged from recession. Unemployment drifted back down. “Yay for us,” said the Fed.
Don't buy that statistical economic garbage. The economy recovered in spite of Fed policy, not because of it. The economy recovered because business owners, entrepreneurs, and workers rolled up their sleeves and made things happen.
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Friday, September 30, 2016
Today’s Fed Makes Volcker Look Timid / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
Let’s look at the Fed’s (and other central banks’) magnitude of monetary manipulation in recent years and the very constrained maneuvering room they now have as a consequence.
Of course, it’s questionable whether they should even be trying to maneuver the economy to the degree that they are. The current problem is a direct result of mistakes made during and after the last financial crisis.
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Thursday, September 29, 2016
FED Goes from ZIRP to NIRP! / Interest-Rates / NIRP
By: Chris_Vermeulen
The FED has not followed through on their numerous promises of a rate increase that Yellen and other FED officials have made over the past several years. She spoke about purchasing assets of private companies and also mentioned that the FED could modify its inflation target.
Investors will most likely purchase shares in companies whose assets have been purchased by the FED since it is likely that Congress and federal regulators would treat these companies as “too big to fail.” Federal ownership of private companies would also strengthen the movement to force businesses to base their decisions on political rather than economic considerations.
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Wednesday, September 28, 2016
Massive Chinese Debt And Why They Are On A Gold Buying Binge! / Interest-Rates / China Debt Crisis
By: Chris_Vermeulen
China’s debt is a staggering $24 trillion with 247% of annual GDP as of last year, which is, in fact, an increase of an astounding 465% within a decade. The total borrowing by both the financial and non-financial sectors was only 78% of the GDP in 2007 and has since increased to 309% of GDP according to economists at Nomura Holdings Inc. led by Yang Zhao and Wendy Chen.
Monday, September 26, 2016
Wells Fargo or the Federal Reserve: Who's the Bigger Fraud? / Interest-Rates / Banksters
By: Dr_Ron_Paul
The Wells Fargo bank account scandal took center stage in the news last week and in all likelihood will continue to make headlines for many weeks to come. What Wells Fargo employees did in opening bank accounts without customers' authorization was obviously wrong, but in true Washington fashion the scandal is being used to deflect attention away from larger, more enduring, and more important scandals.
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Monday, September 26, 2016
BoJ, FOMC and Where To Now? / Interest-Rates / Central Banks
By: Gary_Tanashian
The Bank of Japan gave us a glimpse as to just how far down the rabbit hole we may have to follow global policy makers as we try to make sense of ever more complex and shall we say, innovative ‘tools’ being used in the effort to engineer individual economies and asset markets within the global financial system. BoJ announced it would conduct “JGB purchase operations” in order to “prevent the yield curve from deviating substantially from the current levels”.
The market initially interpreted this to mean BoJ stood in support of a rising yield curve, which would for example, help the banks (ref. MTU and SMFG, which exploded higher off of the support levels we had projected), but by the end of the week the Japanese Yield Curve had eased substantially and there seemed to be confusion about what the policy’s intent, or would-be effects, actually were. I wonder if the BoJ even fully knows what it is doing now. Lots of moving parts in a complex system.
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Saturday, September 24, 2016
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" / Interest-Rates / International Bond Market
By: EWI
Our interest rates strategist explains more in this new interview
Peter DeSario, editor of our Interest Rates Pro Service, explains why this was a "monumental" week in the bond markets -- and offers a preview of which markets he's keeping his eye on.
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Thursday, September 22, 2016
Yellen’s Oversight of the Fed Is Not Producing Monetary Policy but Disbelief / Interest-Rates / US Federal Reserve Bank
By: Jeff_Berwick
The real product of the Fed these days is not monetary policy but disbelief. People can’t believe the amount of speculation, conversation and outright complexity that results in… nothing.
Yellen is basically presiding over the deflation of the Fed’s reputation. Every month more and more credibility leaks away.
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Thursday, September 22, 2016
Gutless Fed Bails On A Rate Hike Yet Again.... / Interest-Rates / US Interest Rates
By: Jack_Steiman
Fed Yellen is gutless and very transparent. She does the same nonsense over and over. She talks about the need to normalize rates and tells us that things are improving economically. We all know that she's not telling the truth and we all know by now that she's a phony. She never had any intention of raising rates, and found the usual excuses she knows will be there for her. Poor numbers as the year moves along on the economic front. She smiled from ear-to-ear when manufacturing stunk. She smiled more when services nosedived, and celebrated when retail sales were a major disappointment. Three beautiful excuses not to raise rates in September.
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Thursday, September 22, 2016
Federal Reserve, US Interest Rates - America Needs A Brain / Interest-Rates / US Federal Reserve Bank
By: Barry_M_Ferguson
Like the scarecrow in the ‘Wizard of Oz’, America needs a brain. Otherwise, it will never get out of the corn field.
The Federal Reserve Bank met today and again left interest rates and the fed funds rate as is. No change. But, they said a rate increase before the year is out is still a very real possibility. Ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha!!!!!! These mendacious meddlers of monetary policy are hilarious. Stan Fisher has lost all credibility since he was so adamant a few weeks ago about rate increases. Janet Yellen? A complete joke. The Fed apparently uses the same ‘red line’ that obama uses. Threats and nothing more. They don’t have the guts and they sure don’t have the intellect to know what to do. Of course, we all know if the Fed really wanted to help they would follow the advice of Jim Rodgers. They should all resign immediately and terminate the Fed bank. But that ain’t going to happen.
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Tuesday, September 20, 2016
Global Bond Bubble has Finally Reached its Apogee / Interest-Rates / International Bond Market
By: Michael_Pento
Boston Fed President Eric Rosengren recently rattled markets when he warned that low-interest rates were increasing the temperature of the U.S. economy, which now runs the risk of overheating. That sunny opinion was echoed by several other Federal Reserve officials who are trying to portray an economy that is on a solid footing. And thus, prepare investors and consumers for an imminent rise in rates. But perhaps someone should check the temperatures of those at the Federal Reserve, the idea that this tepid economy is starting to sizzle could not be further from the truth.
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Monday, September 19, 2016
Yellen’s Footnote 8 Would Put Interest Rates on Autopilot / Interest-Rates / US Interest Rates
By: John_Mauldin
Yellen’s Jackson Hole speech was widely reported, so I’ll spare you the summary.
What wasn’t widely reported was her Footnote 8. Yellen cited approving a mathematical formula that could put interest rates on autopilot. The Fed hasn’t yet followed the rule, but its presence in Yellen’s paper suggests its use is on the table.
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Thursday, September 15, 2016
The Fed’s Monetary Monkeying Is Ruining Your Retirement and the Economy / Interest-Rates / Negative Interest Rates
By: John_Mauldin
The Fed’s mission is to maintain a stable inflation rate while spurring employment. Its main tools are the money supply and interest rates.
What is an interest rate? You might describe it as the price of money. Or in investment terms, it’s the price of liquidity. You don’t have cash now, but you expect to have it in the future.
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Thursday, September 15, 2016
The Fed Used Jackson Hole to Plan Negative Rates / Interest-Rates / Negative Interest Rates
By: John_Mauldin
Jackson Hole revealed things that did not make it into reports by the mainstream media. Turns out, the academic and philosophical underpinnings were being laid down for a radical expansion of the Federal Reserve’s toolbox.
The unthinkable policy that I’ve been warning about since last May—yes, we’re talking negative rates—was not only discussed at Jackson Hole, it was discussed in a positive, even slavishly approving, manner.
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