Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, April 01, 2016
Fed Watchers April Fools in March / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
It may be almost impossible to underestimate the gullibility of professional Fed watchers. At least Lucy van Pelt needed to place an actual football on the ground to fool poor Charlie Brown. But in today's high stakes game of Federal Reserve mind reading, the Fed doesn't even have to make a halfway convincing bluff to make the markets look foolish.
Just two weeks ago, the release of the Fed's March policy statement and the subsequent press conference by Chairwoman Janet Yellen should have made it abundantly clear that the Central Bank policy had retreated substantially from the territory it had previously staked out for itself. In December it had anticipated four rate hikes in 2016, but suddenly those had been pared down to two. Based on the conclusion that the era of easy money had been extended for at least a few more innings, the dollar sold off and stocks and commodities rallied.
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Friday, April 01, 2016
A Visual Look At The Fed Decision From A Retirement Investor's Perspective / Interest-Rates / Pensions & Retirement
By: Dan_Amerman
Below is the transcript for the video. While the images are included below, the motion graphics and use of a pointer are quite helpful for conveying the information, and these can only be seen by watching the video.
Tuesday, March 29, 2016
Fed Will Be Forced to Lower Interest Rates and Declare War on Cash / Interest-Rates / War on Cash
By: Sol_Palha
"No great genius has ever existed without some touch of madness." ~ Aristotle
The simple and easy to understand chart shown below quite clearly illustrates why the Fed has no option but to lower interest rates. Central bankers worldwide have already embraced negative rates, so it is just a matter of time before our central bankers are forced to walk down the same path. The Fed is trying to put on a brave act, but you can already see them backtracking from the strong stance they took last year. Now they are stating that all is not well, and the economic outlook is weaker than expected. Rubbish we already stated in several articles that they would take this path and that the only reason they even raised interest rates was so that they could come out with an excuse to lower them again.
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Tuesday, March 29, 2016
New Zealand’s Surprise Interest Rate Cut Highlights Concern Of A Global Currency War / Interest-Rates / Currency War
By: Nicholas_Kitonyi
On Wednesday March 9th the Reserve Bank of New Zealand announced a surprise cut in New Zealand’s benchmark interest rate by 25bps to 2.25%. That is the fifth rate cut by the RBNZ since June in the hope to spur economic growth and to boost exports by weakening the New Zealand dollar. This is a historic low for New Zealand’s interest rate.
Wednesday, March 23, 2016
Federal Reserve's Policy Forecasts Two Down - Two to Go / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
The Federal Reserve's years-long campaign to sheepishly back away from its own policy forecasts continued in earnest last week when it officially reduced the four expected 2016 quarter point hikes, suggested back in December, to just two. Given the deteriorating economic outlook, I believe there can be little doubt that the Fed will soon complete the capitulation process and remove all expectations for additional hikes this year. Even before that happens, savvy observers should have already concluded that the Federal Reserve is stuck in the monetary mud just as firmly now as it has been since the dawn of the financial crisis back in 2008.
Wednesday, March 23, 2016
Yellen, Draghi, Kuroda: Deranged Lab Rats / Interest-Rates / Central Banks
By: James_Quinn
The stock market has regained all of its loses year to date as economic indicators continue to flash red, corporate profits continue to plunge, consumers continue to spend less at retailers, real wages continue to fall, and housing sales continue to decline. The entire dead cat bounce has been generated through corporate stock buybacks, Wall Street lemmings trying to make up for their terrible year to date investing performance, and central bankers who will stop at nothing to verbally manipulate markets higher - since their monetary machinations over the last seven years have been a miserable failure in reviving the real economy.
Tuesday, March 22, 2016
Subprime Auto Loans: the Next Financial Crisis Shoe to Drop? / Interest-Rates / Financial Crisis 2016
By: Mike_Whitney
Booming auto sales have more to do with low rates and easy financing than they do with the urge to buy a new vehicle. In the last few years, car buyers have borrowed nearly $1 trillion to finance new and used autos. Unfortunately, much of that money was lent to borrowers who have less-than-perfect credit and who might not be able to repay the debt. Recently there has been a surge in delinquencies among subprime borrowers whose loans were packaged into bonds and sold to investors. The situation is similar to the trouble that preceded the Crash of 2008 when prices on subprime mortgage-backed securities (MBS) suddenly collapsed sending the global financial system off a cliff. No one expects that to happen with auto bonds, but story does help to illustrate that the regulatory problems still haven’t been fixed.
Tuesday, March 22, 2016
U.S. Monetary Policy Kaleidoscopic Context / Interest-Rates / Money Supply
By: Mike_Shedlock
Dennis Lockhart, Atlanta Fed president, made a speech today trumping up the possibility rate hikes as soon as April.
In his speech, Lockhart cited "sufficient momentum evidenced by the economic data to justify a further step at one of the coming meetings, possibly as early as the meeting scheduled for end of April."
Let's dive into his speech and also put a spotlight on his claim of "sufficient momentum."
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Sunday, March 20, 2016
Fed Clown Show Has Come and Gone / Interest-Rates / US Federal Reserve Bank
By: Gary_Tanashian
The opening segment from this week’s edition of Notes From the Rabbit Hole has a little fun with the post-FOMC market situation. Unfortunately, there is all too much reality in this clowning around. From NFTRH 387:
Our main theme has been that the ironclad post-2011 confidence in the Federal Reserve among conventional market participants would slowly but surely start to fade because macro parlor tricks, so vigorously employed by the Bernanke Fed, were only tricks or in some cases (Operation Twist) borderline magic, after all.
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Saturday, March 19, 2016
BoJ and ECB Bond Buying - Well That Didn’t Work / Interest-Rates / Financial Crisis 2016
By: John_Rubino
The Bank of Japan and European Central Bank eased recently, which is to say they stepped up their bond buying and/or pushed interest rates further into negative territory. These kinds of things are proxies for currency devaluation in the sense that money printing and lower interest rates generally cause the offending country’s currency to be seen as less valuable by traders and savers, sending its exchange rate down versus those of its trading partners.
Friday, March 18, 2016
Junk Bonds... Here we go again! / Interest-Rates / Corporate Bonds
By: Anthony_Cherniawski
MUT is making all-time new highs as this rally sucks in more gullible investors into junk bonds. As I have said before, MUT is the “cream of the crop.” Investors in this index have fared better than in most junk bond funds.
The sad part about this is that MUT is on a similar Cycle pattern as SPX. In other words, it may be about to join SPX in a panic Cycle decline next week.
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Friday, March 18, 2016
Is This The Debt Jubilee? / Interest-Rates / Global Debt Crisis 2016
By: John_Rubino
Not so long ago the financial world viewed certain numbers as limits beyond which lay trouble. Interest rates near zero, for instance, were thought to risk destabilizing the banking system. And government fiscal deficits above 3% were considered so dangerous that exceeding this level was prohibited by the Maastricht treaty that all euorzone members were required to sign.
Those numbers -- 0% and 3% -- are still considered bad. But now for the opposite reason: They're insufficiently aggressive.
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Wednesday, March 16, 2016
FOMC Statement - Backing Off On the Rate Increases, Lowering Forecasts / Interest-Rates / US Interest Rates
By: Jesse
The Fed recognized that growth is slow, and that inflation remains subdued.
I include a chart of the real median household income to demonstrate why the recovery is so wobbly. Demand and investment are weak because people have less money to spend. Wow, what a surprise.
Tuesday, March 15, 2016
Runaway Credit is the Biggest Threat to Life as We Know It - Video / Interest-Rates / Credit Crisis 2016
By: Mario_Innecco
Transcript excerpt: Tuesday March 15 2016 today I'm gonna be talking about runaway credit
and how life as we know is under threat from runaway credit debt I don't wanna
sound alarmist but I think I need to cover this subject
I'll start out with a comment John Pierpont Morgan JP Morgan back in 1912 the poo poo joe meat committee
hearing at the EUS House of Representatives here he was asked what
gold was and he said money is gold and nothing else they they don't have a
variations that this and some people say that he said money is golden everything
else is credit but I think he was that's a misquote patient but it still serves
Tuesday, March 15, 2016
The Next Level of Monetary Policy / Interest-Rates / Central Banks
By: Rodney_Johnson
There’s an old adage in economics that the best way to cure deflation is to drop money from helicopters. Clearly this phrase isn’t older than mid-20th century, because before that time we didn’t have helicopters… we also didn’t have manipulative central banks. But now we have both, and they are about to join forces.The helicopter statement isn’t meant literally. It conveys how central banks approach an economy when mainstream – and even out of the mainstream – monetary policies have failed.
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Tuesday, March 15, 2016
The World’s Worst Central Bank - Banco Central de Venezuela / Interest-Rates / Central Banks
By: Steve_H_Hanke
The Banco Central de Venezuela (BCV) wins the prize as the world’s worst central bank – at least for the time being. Venezuela’s annual inflation has been in triple-digit territory for more than three years. As the accompanying chart shows, the implied annual inflation rate soared as high as 800% last summer. Since then, inflation has fallen to its current 320% annual rate. This is still well above the phony 180.9% annual rate reported by the BCV in December.
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Monday, March 14, 2016
Bail-Ins And Negative Interest Rates, The Ultimate Admission Of Failure.... / Interest-Rates / US Interest Rates
By: Submissions
Mike Hoy writes: ... Cash and Physical Gold, Standing in The Way of a Lifetime of Financial Servitude and Slavery!
For the last several decades, the out-of-control growth of US Government spending when combined with the unlimited printing policies of "The Fed" has set the stage for "The Perfect Storm!"
Anyone with a simple calculator can easily understand how it is virtually impossible for 320,000,000 people to retire a current and rapidly growing debt of $19,000,000,000,000. This is a sum which equates into $60,000 worth of debt per man, woman and child in the US today. Please ignore the fact that half of the population pays no income tax at all. Forget about the $100,000,000,000,000-$200,000,000,000,000 in future entitlement obligations as only a dreamer could believe this debt has any chance of ever being funded with anything other than more worthless paper!!
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Sunday, March 13, 2016
Money Velocity Proves Q.E. Failure / Interest-Rates / Money Supply
By: Jim_Willie_CB
The current monetary policy is stuck in place. It is highly destructive to banking systems, working capital, and financial markets. Yet it continues ad infinitum, actually until the great collapse. A systemic Lehman event is in progress, as the global financial structure is collapsing. The only remedy is the Gold Standard installation, which is happening, but its architects are from the East. They are labeled as enemies, when the root problem is in the Western banking hive.
Friday, March 11, 2016
Negative Rates and Money Heaven Financial Wonderland Q&A / Interest-Rates / Negative Interest Rates
By: Mike_Shedlock
Questions on negative rates keep coming in: Where does the money go? Who benefits? Will the Fed do the same? What's Draghi up to?
A quick refresher course on paying interest on excess reserves vs. charging interest on excess reserves is in order.
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Friday, March 11, 2016
Mario Draghi Got Lost In A Rabbit Hole / Interest-Rates / ECB Interest Rates
By: Raul_I_Meijer
I’ll try and keep this gracefully short: Mario Draghi ‘unleashed’ a bazooka full of desperate tools on the financial markets yesterday and they blew up in his face faster than you could say blowback or backdraft (and that’s just the start of the alphabet). This must and will mean that Draghi’s stint as ECB head is for all intents and purposes done. But…