Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, June 17, 2025
No FOMC US Interest Rate Cut Wednesday / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
Dear Reader
It's your lucky day, you get access to my most recent timely market brief that was first made available to patrons early Tuesday, so for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $7 per month, lock it in now at $7 before it rises to $10 per month for new sign-up's. https://www.patreon.com/Nadeem_Walayat.
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Wednesday, May 14, 2025
US CPLIE for April & Delaying US Bond Market Panic Event / Interest-Rates / US Bonds
By: Nadeem_Walayat
Dear Reader
It's your lucky day, you get access to my recent timely market brief that was first made available to patrons early Monday, so for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $7 per month, lock it in now at $7 before it rises to $10 per month for new sign-up's. https://www.patreon.com/Nadeem_Walayat.
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Wednesday, May 07, 2025
Battle between Trump and Powell to CUT US Interest Rates / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
Dear Reader
It's your lucky day, you get access to my recent timely market brief that was first made available to patrons early Monday, so for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $7 per month, lock it in now at $7 before it rises to $10 per month for new sign-up's. https://www.patreon.com/Nadeem_Walayat.
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Thursday, February 27, 2025
Audit the Fed, Audit Fort Knox, Audit Everything / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Americans have to wonder, based on revelations coming out of Washington DC, whether government waste, fraud, and abuse is happening on an industrial scale.
The need to perform audits and implement controls is obvious, despite wailing from people who somehow aren’t happy with the questions being asked. If we are going to have a republic, taxpayers need some confidence their hard-earned money is well spent.
The word “audit” has some negative connotations – mostly associated with taxes and the Internal Revenue Service.
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Tuesday, February 11, 2025
Fed Interest Rate Cut Probability / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
The market is in a constant state of flux flipping between a rate cut coin toss to currently sit at 70% chance of a rate cut some 12 days out.
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Friday, December 13, 2024
Fed Balance Sheet Continues To Decline / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
FED BALANCE SHEET
Below is a chart posted and updated regularly by the Federal Reserve Bank of St. Louis…
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Thursday, September 12, 2024
Global Debt Bubble / Interest-Rates / Global Debt Crisis
By: Nadeem_Walayat
The global debt bubble that just keeps on inflating. And what does all this debt do? Debase currency and Inflate asset prices.
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Friday, August 30, 2024
The Post-2020 History of the 10-2 US Treasury Yield Curve / Interest-Rates / US Interest Rates
By: Gary_Tanashian
The 10yr-2yr Yield Curve is poised to un-invert under disinflationary, possibly coming deflationary pressure
We know the story. A disgusting virus spread across the world…
covid, yield curve
…terrorizing society into social and economic lockdown, causing crude oil to go to zero and many markets to begin a crash. The Fed sprang into action with Zero Interest Rate Policy (ZIRP), QE, MMT and whatever other TMM (total market manipulation) it could think of in order to create the inflationary pathway out of the disaster.
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Friday, June 07, 2024
The Fed Leads and the Market Follows? It's a Big Fat MYTH / Interest-Rates / US Interest Rates
By: EWI
By Murray Gunn | Head of Global Research, Elliott Wave International
We help investors by analyzing what really drives the markets. Along the way, we often uncover a market myth, something most investors believe moves the markets, but really doesn't.
I want to show you one of the biggest market myths in existence. It will help you understand what the Fed can and cannot do.
The one thing the Federal Reserve can do is control the money supply. The physical printing of dollars, or the digital creation of reserves, is in its gift. The natural state of affairs is for the money supply to grow at a rate of around 5% per annum.
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Friday, May 24, 2024
Why US Interest Rates are a Nothing Burger / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
All eyes today will be on the Fed and it's interest rate decision, weren't we supposed be having a cut in March? That's gone! Kicked down the road. So no rate cut today or at the next meeting nor likely in June. And each time the Fed holds the MSM clowns cry stocks must fall due to failure for rate cuts to materialise all whilst the bull market continues to relentlessly grind higher.
Everybody is obsessed with when will the rates be cut without understanding why rates should be cut!
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Thursday, May 09, 2024
The Federal Reserve Is Broke! / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
The Federal Reserve is losing billions of dollars. As financial journalist and market analyst Jim Grant put it during a recent interview on Fox Business, the Fed is actually broke.
But most people don't seem concerned about the central bank's financial condition. They are more concerned about what Donald Trump may do to the Fed if he wins the election.
Monday, April 29, 2024
The Federal Reserve's $34.5 Trillion Problem / Interest-Rates / US Debt
By: MoneyMetals
The Federal Reserve has a $34.5 trillion problem.
And the problem is growing.
Yes, I’m talking about the national debt.
How is the debt the Fed’s problem?
It hamstrings the Fed’s ability to fight price inflation.
Sunday, April 07, 2024
The Fed is becoming increasingly divided on interest rates / Interest-Rates / US Interest Rates
By: Submissions
Powell reaffirms multiple rate cuts are on the table, but his peers thinks we’ll be lucky to get one this year
The Fed's officials can’t seem to get their stories straight.
On April 3, Fed Chair Jerome Powell reaffirmed his expectations for multiple rate cuts this year, shrugging off the recent uptick in inflation.
Sunday, March 31, 2024
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Everybody wants to know when the Federal Reserve is going to declare victory over price inflation and begin loosening monetary policy.
The real question is - when are they going to make monetary policy tight again?
Because despite all the worry about high interest rates, monetary policy remains relatively loose.
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Monday, March 25, 2024
The Federal Reserve Didn't Do Anything But It Had Plenty to Say / Interest-Rates / US Interest Rates
By: MoneyMetals
The Federal Reserve didn’t do anything at its March Federal Open Market Committee (FOMC) meeting, but Jerome Powell & Company had plenty to say.
The Fed’s dovish rhetoric sent a wave of relief through the markets and drove stocks to yet another all-time high.
People would probably be wise to remember that saying isn’t doing.
Monday, March 11, 2024
Fed’s Next Intertest Rate Move might not align with popular consensus / Interest-Rates / US Interest Rates
By: Richard_Mills
The Fed’s preferred measure of inflation is core PCE, which stands for Personal Consumption Expenditures index. This inflation gauge, published monthly by the Bureau of Economic Analysis (BEA), doesn’t include food and energy, because prices for these two categories tend to be volatile.
When the latest PCE numbers came out on Feb. 29, they showed January headline PCE was 2.4%, year on year, while core PCE was 2.8%.
Remember, the Fed’s targeted inflation rate is 2%. Inflation needs to be falling to somewhere close to 2%, for the Fed to consider lowering interest rates, having raised them 11 times since spring 2022.
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Monday, March 11, 2024
Two Reasons The Fed Manipulates Interest Rates / Interest-Rates / US Interest Rates
By: Kelsey_Williams
There are two reasons the Fed manipulates interest rates. Before we talk about those reasons, though,it is important to understand that the Fed does not actually control interest rates. Interest rates are set in the bond market. Buyers and sellers (traders) bid for and offer bonds for sale. When a buyer and seller agree on a price, the trade is finalized. The specific price, in conjunction with the face value of the bond (always $1000) and the stated coupon rate attached to the bond (and the length of time until the bond matures for yield to maturity) factor into the formula which determines the current yield, or what might be called the bond’s current interest rate.
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Saturday, March 09, 2024
The Bond Trade and Interest Rates / Interest-Rates / US Bonds
By: Nadeem_Walayat
An opportunist trade to capitalise on the bond market blood bath of 2023,, objective for about a 50% return over 2 years with my original analysis timed to coincide with the bond market bottom - 7th Aug 2023 https://www.patreon.com/posts/inflation-bond-87342150
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Friday, March 01, 2024
US Interest Rates - When WIll the Fed Pivot / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
The current Fed Funds rate is 5.25% with he market expectations for the cuts to commence March 2023, though the market has been wrong for the whole of 2023 when Fed rate cuts were always seen as starting some 6 months into the future! In reality it does not matter when the Fed cuts rates because the Fed FOLLOWS the market rates not sets them. And the market rates as evidenced by bond yields has been falling for the past few months.
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Monday, February 05, 2024
US Exponential Budget Deficit / Interest-Rates / US Debt
By: Nadeem_Walayat
The US Congress Budget Office report projects the US deficit as a percentage of GDP being on an explosive trend trajectory which is as a function of the US government borrowing money to spend on consumption resulting in an ever interest payments and debt mountain. Folks we are looking at an out of control debt spiral, as interest on debt continues to result in the printing of even more new debt.
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Sunday, February 04, 2024
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates / Interest-Rates / US Interest Rates
By: Richard_Mills
The probability of interest rate cuts has many market participants pondering whether 2024 will bring a bull market for precious metals.
Gold has held up quite well despite the Fed’s tightening cycle, gaining 13% in 2023.
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Friday, December 01, 2023
The Bond Trade / Interest-Rates / US Bonds
By: Nadeem_Walayat
The Bond Markets look like they have bottomed.
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Saturday, November 18, 2023
Biden Bizarrely Brags About Lower Budget Deficits as US Federal Debt Skyrockets / Interest-Rates / US Debt
By: MoneyMetals
The more things change in Washington, the more they stay the same.
Under the new leadership of House Speaker Mike Johnson, Congress passed a stopgap funding bill on Tuesday to once again avert a government shutdown. It was quickly approved by the Senate on Wednesday, then signed into law by President Joe Biden.
Like the last one, this latest bipartisan budget scheme includes no spending cuts. So once again, deficit hawks are left feeling betrayed – not to mention alarmed at the country’s worsening fiscal trajectory.
Friday, November 03, 2023
US Bond Market Chaos to Increase by March 2024 / Interest-Rates / US Bonds
By: Michael_Pento
The major issue with the bond market right now is the overwhelming amount of bond issuance combined with the notable absence of the usual buyers. In other words, the illiquidity is already causing U.S. sovereign debt to trade like a microcap penny stock. This dysfunctional trading environment should become exponentially worse by the end of Q1 2024.The U.S. national debt is now $33.5T, and the interest on that debt is $712b so far this year. That interest expense is set to double over the next few years as our debt is rolling over at much higher interest rates. Interest payments equal to 17% of all Federal revenue and should easily jump to 35% of all income very soon. The deficits will be much greater when the recession arrives, as the automatic economic stabilizers kick in, just as revenue also collapses. Entitlements and debt service payments will equal 100% of all revenue by 2040 at the very latest. At that point, there will be no room for any other government spending. Our bond market is fracturing, and it is becoming an existential crisis for our financial system. What else would you expect when the nation’s annual deficit is 45% of our revenue, and that is adding on each year to the national debt, which is an incredible 771% of annual federal income!
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Saturday, October 28, 2023
The Bond Trade / Interest-Rates / US Bonds
By: Nadeem_Walayat
As expected the four bond funds have been gravitating towards bear market lows and thus offering an opp to accumulate, I am now approx 55% invested.
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Tuesday, October 10, 2023
How to Capitalise on the UK and US Bond Markets Blood Bath of 2023 / Interest-Rates / US Bonds
By: Nadeem_Walayat
This is the final part of my extensive analysis Inflation Bond Fire of the Vanities Breeds Opportunity that was first made available to Patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month, lock it in now at $5 as this will soon rise to $7 per month for new sign-ups. https://www.patreon.com/Nadeem_Walayat.
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Monday, October 09, 2023
Investing in UK Bond ETFs - -GLTL and 3GIL / Interest-Rates / Investing 2023
By: Nadeem_Walayat
GLTL.L - £39 - UK Gilts 15+Yr
UK bonds have been obliterated, portfolios built up in bond funds over the past 10 years have been wiped out! Now you know why I have avoided bonds. Pittance in return during their bull market followed by a spectacular collapse, all whilst the lemmings encouraged stock investors to seek safety in bonds! This bond fund has COLLAPSED BY 60% off its high of £82! Imagine those who had parked the bulk of their cash in such funds by following the advice of FA's! Only discovering the catastrophe when they get their annual statements, A lot of TV's will have had remotes thrown at them! This is why there is no FREE LUNCH! It is YOUR MONEY it is upto YOU to DO THE WORK and understand what you are invested in else PAY THE PRICE of a 60% wipeout in what is supposed to be an ultra safe low volatility asset! When the exact opposite is true! If you lost similar on UK bonds then it's your fault for being LAZY! DO THE WORK!
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Monday, October 09, 2023
Why You Should Expect a Once-in-a-Lifetime Debt Crisis / Interest-Rates / Global Debt Crisis
By: EWI
U.S. credit card debt surpasses $1 trillion
On a national level, a debt crisis occurs when a country is unable to pay back its government debt. This might result from government spending exceeding tax revenues for an extended period.
On an individual level, a crisis can result from too little income and too much debt -- that simple. This sometimes means defaulting on a car loan, for example, or even declaring bankruptcy.
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Sunday, October 08, 2023
US Bond Market Opportunity - IBTL.L $279- US Treasury 20+yr / Interest-Rates / US Bonds
By: Nadeem_Walayat
IBTL.L $279- US Treasury 20+yr - US Equiv TLT ETF
Peaked at $523, collapsed to it's recent low of near 50% to $276, imagine all those who swallowed the financial advisors and media sales pitch to be 60% in bonds because they are 'lower risk' then stocks! This is HORRIFIC! MORE THAN DOUBLE THE RISK FOR A FRACTION OF THE RETURN OF STOCKS! HORRIFIC! Still it gives a higher volatility potential to accumulate into right now. Potential upside over 2-4 years is for $422 for a 52% on the current price!
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Sunday, October 08, 2023
US Bond Market Opportunity - IBTM.L £135.8 - US Treasury 7-10Yr / Interest-Rates / US Bonds
By: Nadeem_Walayat
This bond fund is down 29% from it's high with potential upside target of £175 for a 27% gain over a target 2-4 years, so a lower / risk lower return component of the portfolio. I've been accumulating since £139 with limit orders ever £1 lower, as well as timed based buys.
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Sunday, October 01, 2023
UK and US Inverted Yield Curves and Bond Funds / Interest-Rates / Inverted Yield Curve
By: Nadeem_Walayat
Yield Curves
At the late 2021 peak of the stock market the US short end yield was zero, long end (20 year) at about 2%. so the yield curve was normal. By the time of the bear market low was starting to invert, with the short end 3.5% vs long end 3.8%, fast forward to day we have the short end at 5.5%, Whilst most recent yield action has seen the short end and the long end nudge higher, hence offering an opportunity to accumulate near the bond markets lows.
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Sunday, October 01, 2023
Investing in UK and US Bonds / Interest-Rates / International Bond Market
By: Nadeem_Walayat
And we arrive out our final destination, one of where doom and gloom prevails, most fear much higher BOND market interest rates! Where we have the likes of Bill Ackman literally announcing he is shorting US bonds AFTER they have fallen! Where were they a year go when that was the time to short bonds?
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Thursday, September 21, 2023
Why we won't see a repeat of the 1970's Rate Hikes / Interest-Rates / Global Financial System
By: Nadeem_Walayat
Doom merchants continue to run off to the 1970's rate hikes that culminated in eye watering 15% completely miss what's staring them in the face for why that CANNOT happen this time! It can't happen because Debt to GDP is triple that of the 1970's! 120% vs 40%, Raising the Fed funds rate to 15% again would be akin to a 45% rate today.
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Tuesday, September 12, 2023
Something Isn’t Adding Up as U.S. Debt Soars $2 Trillion in 2023 / Interest-Rates / US Debt
By: MoneyMetals
Precious metals markets retreated last week as official U.S. employment data came in surprisingly strong.The Labor Department reported that weekly jobless claims fell by 13,000 to a total of 216,000. Many economists had been expecting jobless claims to rise.
Of course, government economic data is subject to revision and to criticism for flawed methodology. But it still has the ability to move markets, at least in the near term.
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Sunday, September 03, 2023
US Bond Market Yield Curve Inversion Current State / Interest-Rates / Inverted Yield Curve
By: Nadeem_Walayat
The yield curve is the Ten Year yield Minus 2 Year Yield - What it shows is when short money is more expensive (higher rates) then long money, why is that? Forward economic weakness thus lower forward rates? Yes that is a valid argument but I suspect that in large part is the WRONG conclusion, it is after all the consensus view, what the econofools regurgitate across MSM, long rates are lower because the market is discounting future interest rate cuts is WRONG!
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Monday, July 24, 2023
The Fed as Bad Bank Ultimate Irony / Interest-Rates / US Federal Reserve Bank
By: Jim_Willie_CB
A historical paradigm shift is in progress. The process of de-Dollarization began with Russia in response to the Maidan coup in Kiev back in 2016. The Russian reacted in multiple ways, but the Eurasian Trade Zone grew. That was the Jackass name given, which has emerged as the BRICS Union in recent years. Numerous nations have followed the Russian lead in removing the USDollar from their trade payments and banking practices. The American observers have dismissed this trend as trivial and not enduring. They are wrong, dead wrong. In the last 18 months, the Japanese had dumped $240 billion in USTreasury Bonds over a 12-month period. They continue. They accumulate Gold in their banking reserves, thus following the BRICS theme, their operating policy. The macrocosm, by contrast, will feature 20 nations dumping USTBonds en masse, and acquiring Gold for banking reserves. The UAE will become a primary office for the conversion, their Dirham notably pegged to the USD.
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Sunday, June 18, 2023
Fed Claims It CAN Resume Rate Hikes While Doubts Grow / Interest-Rates / US Interest Rates
By: MoneyMetals
As the Federal Reserve begins to back off on tightening, the U.S. dollar is becoming increasingly vulnerable to selling.The Fed left its benchmark interest rate unchanged at just above 5% at this week's policy meeting. It was the first time in over a year that central bankers decided not to hike.
In his remarks, Fed chairman Jerome Powell tried to maintain a hawkish tone despite the dovish policy move. He vowed to deliver more rate hikes later this year.
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Friday, June 16, 2023
US Interest Rate A Pause Like Nonother / Interest-Rates / US Interest Rates
By: Michael_Pento
The Bank of Canada paused its rate hiking cycle in January but then hiked rates at its last meeting. The
Royal Bank of Australia paused in April but then had to start hiking again in June. The Fed also paused at
its June meeting or at least skipped a rate hike. This was the case even though core inflation rose 0.4%
month over month from April to May and was still up 5.3% from a year ago.
Tuesday, May 16, 2023
US Debt Ceiling Crisis Smoke and Mirrors Circus / Interest-Rates / US Debt
By: Nadeem_Walayat
It's definitely the time to bring out the clowns as MSM and much of the blogosfear are obsessed by the US debt ceiling smoke and mirrors circus that is being used as an excuse to explain potential market outcomes from a CRASH upwards, there is always a crash coming! And if the market soars then no problem it will soar because of debt ceiling positive developments, Whether UP or Down it will all be as a consequence of the DEBT CEILING! I have watched this circus take place every couple of years over the decades, it IS just a circus act for the Republicans and Democrats to prance around in front of the media, a smoke and mirrors TV show to remind the masses that they have all of the power and so if the chose to nuke the US economy.
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Saturday, April 29, 2023
Corporate Bonds: "The Next Shoe to Drop" / Interest-Rates / Corporate Bonds
By: EWI
"The neckline has been broken over the last few days"
A "calamity" is likely ahead for corporate bonds, says our head of global research, Murray Gunn.
Some of Murray's analysis involves the head and shoulders, a classic technical chart pattern. In case you're unfamiliar with it, here's an illustration along with an explanation from one of our past publications:
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Tuesday, April 18, 2023
US Treasury Bond Market Yield Curve / Interest-Rates / US Bonds
By: Nadeem_Walayat
That was one hell off a drop in the 2 year yield yesterday, went straight from 5% to 4%. Now US rates are on par with where they were when the S&P was trading at 4200, of course it's not as simple as that, the rate fell in response to the Fed bailout of the banking crime syndicate. Still this should be positive for stocks.
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Wednesday, April 12, 2023
Interest Rates Should Continue To Fall, Eventually Setting Up A Bond Market Crash / Interest-Rates / US Bonds
By: Avi_Gilburt
If you have been reading my public articles on TLT over the last half a year, then you would know of my expectation to see the bond market rally into 2023, and rates falling into 2023.
When I first put this expectation out last year, many (even some of my own clients) thought I was simply crazy. With rates skyrocketing towards 5%, most were quite certain that we would easily eclipse that point, and move well towards 6% and even higher. And, of course, the reason most maintained that expectation was due to the Fed’s public position of continuing to raise rates.
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Saturday, April 01, 2023
The Fed Knew / Interest-Rates / US Federal Reserve Bank
By: Richard_Mills
Should we leave the creation of new money in the hands of bankers or place its creation solely with our government?
“The financial system used by all national economies worldwide is actually founded upon debt. To be direct and precise, modern money is created in parallel with debt…
The creation and supply of money is now left almost entirely to banks and other lending institutions. Most people imagine that if they borrow from a bank, they are borrowing other people’s money. In fact, when banks and building societies make any loan, they create new money. Money loaned by a bank is not a loan of pre-existent money; money loaned by a bank is additional money created. The stream of money generated by people, businesses and governments constantly borrowing from banks and other lending institutions is relied upon to supply the economy as a whole. Thus the supply of money depends upon people going into debt, and the level of debt within an economy is no more than a measure of the amount of money that has been created.” Michael Rowbotham, ‘The Grip of Death’
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Sunday, February 26, 2023
Fed President Worried the Fed Risks a Repeat of the 1970s / Interest-Rates / Inflation
By: MoneyMetals
Gold and silver markets drifted lower again this week as investors braced for additional Fed rate hikes to come.
On Wednesday, the Federal Reserve released the minutes from its latest policy meeting. Policymakers agreed on the need for additional increases in interest rates. They settled on just a 0.25% bump up at their last meeting. But some dissenters called for a larger 0.5% hike.
Friday, December 30, 2022
Major Fed Myth: Debunked - Fed is Reactive in Setting Rates – Not Proactive / Interest-Rates / US Interest Rates
By: EWI
The days of near-zero interest rates are long gone -- at least for now.
As we look back on 2022, we know that it's been a year of rising interest rates, and many observers say it's all due to the Fed.
But it's a flat-out myth that the Fed determines the trend of interest rates. The market does. The Fed merely.
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Monday, December 26, 2022
US Debt Jubilee / Interest-Rates / US Debt
By: Richard_Mills
A cross-the-board ‘Debt Jubilee’ might sound radical, but a reading of history shows that retiring debt can actually make a country’s economy, and its indebted citizenry, all the better for it. There is even a relatively recent example. In 2000, U2 front man Bono launched a campaign to provide debt relief to developing countries. The Jubilee 2000 coalition managed to get the G8 to agree to write off $100 billion in debts that developing countries owed to developed nations.
The term ‘Jubilee’ comes from the Old Testament. The book of Deuteronomy refers to a sabbath year during which any slaves would be freed, and everyone would be allowed to return to their family farms and live off the land. During the Jubilee, all debt obligations would be forgiven — such as land or crops that debtors had pledged to creditors.
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Saturday, December 24, 2022
Why the Fed Intertest Rates Pivot will Happen Faster than People Think / Interest-Rates / US Interest Rates
By: Richard_Mills
Most market participants see the Fed’s tightening policy as similar to what Paul Volcker’s Fed did in the late 1970s, when double-digit inflation necessitated a cycle of rate hikes that brought the federal funds rate to 20%. Volcker succeeded in taming inflation but the price was the 1982 recession, considered one of the longest and worst in economic history.
There is one crucial difference between 1982 and 2022, and that is the debt. According to the FRED chart below, the US debt to GDP ratio in 1982 was around 35%. Today it is more than three times higher, at 120%.
This severely limits how much and how quickly the Fed can raise interest rates, due to the amount of interest that the federal government must pay on its debt.
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Thursday, November 24, 2022
Why INTEREST RATE HIKES Are INFLATIONARY! / Interest-Rates / Inflation
By: Nadeem_Walayat
Unfortunately I will have to leave this mostly for next time. But basically INTEREST RATE HIKES to bring INFLATION DOWN! Is NOT going to work because INTEREST RATES DO NOT CONTROL the RATE of INFLATION. So that which academics have built their whole careers on is BS! All I hear is Volcker raised rates that brought inflation down and so rinse and repeat, was it Interest rates that killed the Inflation of the 1970's? Are you sure your not lapping up the propaganda which is ECONOMICs perpetuated by the propaganda arms of Governments called central banks who's primary remit is to put up a smoke screen of misinformation so as to allow governments, to get away with printing money!
As I have voiced for well over a decade, Inflation is a function of governments PRINTING MONEY, of which QE is part of the equation i.e print money to monetize government debt, which despite all of the noise continues to this very day! Governments printing money on an epic scale for which the smoking gun is the Governments deficit spending, the US Federal Government is spending $1.4 trillion more than it earns in revenue that is PRINTING MONEY! For the UK it's about £120 billion,
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Thursday, November 24, 2022
Are I-Bonds Predicting a drop in Inflation ? / Interest-Rates / Inflation
By: Nadeem_Walayat
A patron commented - Interesting take on inflation: the US Treasury I-bonds (which one can invest $10k each year) will pay an annualized interest from November 1, 2022, through April 2023 of 6.89%, down from the 9.62% rate offered since May 2022. Probably an indicator that the inflation stats that are forthcoming will show we’ve peaked. https://treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/
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Monday, November 07, 2022
Powell May Be Planning a Post-Election Fed Pivot / Interest-Rates / US Interest Rates
By: MoneyMetals
The U.S. Dollar Index (DXY) took a dive last Friday following a middling jobs report. Could the move be the start of a bigger breakdown?
The DXY, a measure of the dollar’s relative strength versus a basket of foreign currencies, peaked in late September. Since then it has fallen into a sideways trading range, failing to make new highs despite another jumbo rate hike by the Federal Reserve last week.
Currency traders may be looking ahead – specifically to the likelihood of a U.S. economic downturn in 2023. The potential of another housing-led Great Financial Crisis also looms.
Sunday, November 06, 2022
The 78 Year Interest Rate Cycle - Why Investors in U.S. Treasuries Face Major Risk / Interest-Rates / US Interest Rates
By: EWI
Rising rates will be "disastrous" for governments, other debtors and creditors
The market for U.S. Treasuries is the biggest bond market in the world, and it appears that potentially big trouble may be afoot.
Earlier this month, none other than the U.S. Treasury Secretary herself (Janet Yellen) acknowledged ...
... "a loss of adequate liquidity in the [U.S. government debt] market."
Then, in a statement last week, Bank of America strategists expressed concerns about ...
... "large scale forced selling [of U.S. Treasuries]."
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Thursday, November 03, 2022
Fed Hawkish Interest Rate Pivot / Interest-Rates / US Interest Rates
By: Michael_Pento
This latest bear-market bounce was predicated on good seasonality, the hopes for a typical mid-term election boost, and the rumors of a Fed pivot. Wall Street always finds a narrative for rallies in a bear market. But the negative economic and liquidity cycles remain unchanged: The Fed is hiking rates into a recession. Powell may have done his last 75bp rate hike on November 2nd. But another 50bp hike is likely coming in December, and then the regular 25bp variety is coming in February. Meanwhile, $95 billion per month of Quantitative Tightening is rapidly destroying the money supply.
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Wednesday, November 02, 2022
SMASHED Bond Markets Brewing Opportunity / Interest-Rates / International Bond Market
By: Nadeem_Walayat
The consensus script is that when stocks fall bonds go up, instead 2022 saw that consensus view blown apart as the below chart illustrates. In fact bonds have NEVER under performed stocks during a downturn, not even during the raging inflation of the 1970's!
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Friday, October 28, 2022
FED Balance Sheet QE4Ever / Interest-Rates / Quantitative Easing
By: Nadeem_Walayat
Not to forget the inflation mega-trend courtesy of rampant central bank money printing to monetize government debt coupled with the fake inflation indices where up until recently the Fed had succeeded in hoodwinking the masses that US inflation was just 1%. Instead at that time I warned it was more like 6%! Now it's more like 14%. Anyway the money printing binge now totals $8.8 trillion, up from $4 trillion at the start of 2020 and down from a a peak of $9.62 trillion in the so called Taper. We saw how the taper of 2019 went which at the time I warned would eventually resolve in the Fed Balance sheet DOUBLING. of course I was not expecting it to happen the very NEXT YEAR in 2020!
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Wednesday, October 26, 2022
TIPS BONDS FAKE INFLATION PROTECTION! / Interest-Rates / Inflation
By: Nadeem_Walayat
How to protect one self form INFLATION! Well what the investment industry sold to their clients were Inflation Protected Bond funds! The sales pitch went that when Inflation soars and regular bonds fall don't worry you are protected so given that inflation has taken off like a rocket have these bond funds delivered on their sales pitch?
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Wednesday, October 26, 2022
When Will the Fed Throw in the Towel on Rate Hikes? / Interest-Rates / US Interest Rates
By: MoneyMetals
The Federal Reserve finally stopped referring to inflation as “transitory” earlier this year and got serious about trying to control the painful rise in prices it has caused. Officials have jacked the Fed funds rate up by 3% since March.
Thus far they have been willing to inflict pain upon financial markets. The S&P 500 lost roughly 20% of its value since the end of March.
The aggressive tightening has also pushed the Federal Reserve note “dollar” higher relative to other major currencies.
Sunday, October 23, 2022
US interest Rates and Inflation / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
US market interest rates LEAD the inflation rate. even more so than that which the below graph implies as there is a couple of weeks delay in release of inflation data. And then there is the smoke and mirrors inflation game that the Fed plays i.e. core inflation vs CPI, core is CPI less food and energy because obviously people can survive without food and energy so are excluded so that the Fed gets a more manageable inflation number so as to make their job easier than if they had to cope with a truer inflation rate.
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Monday, September 26, 2022
Is Powell Bent on Wrecking the US Economy? / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Federal Reserve chairman Jerome Powell has taken a turn to the dark side.
After years of pleasing everyone on Wall Street and in Washington, D.C. with ultra-loose monetary policy, Powell has, for now, decided to recast himself as the villain. He now seems intent on crashing markets, killing jobs, and driving the economy into a deep recession in the name of fighting the inflation he helped unleash.
Saturday, August 20, 2022
Mixed Messaging from the Fed Causing Confusion in Markets / Interest-Rates / US Interest Rates
By: MoneyMetals
Precious metals markets are giving up ground this week as investors react to the latest musings from the Federal Reserve.
On Wednesday, the Fed released the minutes from its latest policy meeting. Officials acknowledged some of the warning signs of a weakening economy. That suggests they are likely to scale back future rate increases rather than implement additional 75 basis-point hikes.
But policymakers also admitted that inflation is still running uncomfortably high and seem poised to continue tightening to some extent.
Mixed messaging from the Fed caused confusion among investors. Some interpreted the Fed's comments as hawkish while others saw them as more dovish than expected. Perhaps central bankers themselves are confused and don't really know what they should be doing next.
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Thursday, August 04, 2022
Should We Be Prepared For An Aggressive U.S. Fed In The Future? / Interest-Rates / US Interest Rates
By: Chris_Vermeulen
Traders expect the U.S. Fed to soften as Chairman Powell suggested they have reached a neutral rate with the last rate increase. The US stock markets started an upward trend after the last 75bp rate increase – expecting the U.S. Fed to move toward a more data-driven rate adjustment.
My research suggests the U.S. Federal Reserve has a much more difficult battle ahead related to inflation, global market concerns, and underlying global monetary function. Simply put, global central banks have printed too much money over the past 7+ years, and the eventual unwinding of this excess capital may take aggressive controls to tame.
Wednesday, August 03, 2022
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ / Interest-Rates / US Interest Rates
By: MoneyMetals
With last week’s second 75 basis-point rate hike, the Federal Reserve now claims it has achieved a “neutral” monetary policy stance. That would mean, in theory, that interest rates are neither stimulating nor restraining the economy.
"Now that we're at neutral, as the process goes on, at some point, it will be appropriate to slow down,” Fed Chairman Jerome Powell said.
Powell was effectively telling markets he intends to pivot away from inflation fighting.
Yet inflation, even when measured by the Fed's own preferred gauge, continues to run hot.
Saturday, July 09, 2022
Central Banks QT SCAM - Bank of England Set to DELETE UK Treasury Bonds off it's Balance Sheet / Interest-Rates / Quantitative Easing
By: Nadeem_Walayat
Just as the Bank of England handed most of the interest that the UK treasury pays on the Gilts it holds back to the TREASURY
So what do you think the Bank of England is going to do as maturing bonds are removed from it's balance sheet, I will tell you whats going to happnen, they are going to subvert QT so that most of the money the treasury pays the Bank of England on mautirng bonds is going to find it's way back to Treasury in a technical excercise of deleting maturing bonds off central banks balance sheet.
The only question market is will the clueless mainstream financial press be able to cotton on to the inflationary Weimer Republic money printing scam that the Bank of England and Treasury will be perpertruating or not?
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Friday, July 08, 2022
The Fed Is Afraid of Inflation and Tightens Its Hawkish Stance / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
The Fed gives no illusions: it will maintain its hawkish stance. Meanwhile, gold plunged decisively below $1,800, which has bearish implications.Yesterday (July 6, 2022), the FOMC published the minutes from its last meeting, held in mid-June. Although the publication reveals no major surprises about US monetary policy, it shows rising worries within the Fed and also strengthens its hawkish rhetoric.
Why? First, the Committee’s members acknowledged that “the near-term inflation outlook had deteriorated since the time of the May meeting.” They also agreed that risks to inflation were skewed to the upside and that persistently high inflation could de-anchor inflation expectations:
Many participants judged that a significant risk now facing the Committee was that elevated inflation could become entrenched if the public began to question the resolve of the Committee to adjust the stance of policy as warranted. On this matter, participants stressed that appropriate firming of monetary policy, together with clear and effective communication, would be essential in restoring price stability.
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Sunday, July 03, 2022
Is the US Yield Curve Inversion Broken? / Interest-Rates / US Bonds
By: Nadeem_Walayat
The US has experienced 6 recessions over the past 40 years each of which were accompanied by an inversion of the 2 year and 10 year treasury bond yields an average of 18 months BEFORE the recession so whilst US yield curve inversions have proven to be a useful indicator in the past, though this time around inflation has been warning of a recession for a good 6 months before the US yield curve recently tentatively inverted sending MSM into a spin. Still the below chart does demonstrate that a yield curve inversion was imminent given that the interest rates have hit the down sloping trendline at which point yield curves tend to invert usually in advance of a recession which tends to typically follow 12 to 18 months after inversion, in terms of stocks and housing this implies downwards price pressure AHEAD of the recession rather than WITH the recession. But again all of the inversions of the past 20 years were during periods of LOW inflation.
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Monday, June 27, 2022
Have US Bonds Bottomed? / Interest-Rates / US Bonds
By: Nadeem_Walayat
A patron asked if US bonds have bottomed / are cheap to buy now that inflation is 'peaking'.
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Sunday, April 24, 2022
Will the Fed Raising interest Rates Cause a Recession? / Interest-Rates / US Interest Rates
By: Richard_Mills
A recession is what results when an economy stops growing. The National Bureau of Economic Research, the group entrusted to call the beginning and end dates of a recession, defines it as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
Economists define a recession as two consecutive quarters of decline in GDP, which is the total value of all goods and services a country produces.
We aren’t there yet, but the war between Russia and Ukraine has prompted a re-evaluation of the growth prospects for the world economy and some of the major players in it. According to CBC News, the International Monetary Fund is blaming the war for disrupting global commerce, pushing up oil prices, threatening food supplies and increasing uncertainty already heightened by the coronavirus.
The 190-country lender therefore slashed its global growth forecast to 3.6% this year and next.
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Monday, April 18, 2022
The myth of PH’s bankruptcy and “Chinese debt slavery” / Interest-Rates / Asian Economies
By: Dan_Steinbock
In 2017, Forbes reported that President Duterte will force Philippines into China’s debt slavery and bankrupt the economy by 2022. The fake story was promoted heavily by international and Philippine media. The question is, why?In May 2017, Forbes released a column that claimed that “New Philippine Debt of $167 Billion Could Balloon To $452 Billion: China Will Benefit.” It was written by Anders Corr, who was portrayed as an “independent” geopolitical risk analyst.
“Over 10 years,” Corr boldly predicted, “that could balloon Philippines’ debt-to-GDP ratio as high as 296%, the highest in the world.” Fueled by expensive loans from China," he said, "Dutertenomics will put the Philippines into virtual debt bondage.”
At the time, I argued that Corr’s prediction was idiotic and up to 240-250 percentage points off. Yet, it was quoted widely both internationally and in the Philippines.
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Saturday, April 16, 2022
Inflation pushes the 30-year Treasury bond yield through long-term moving average trends! / Interest-Rates / US Bonds
By: Gary_Tanashian
Okay, let’s take a breath. I don’t like to use ‘!’ in titles or even in articles. In fact, when I see too many of them I immediately think that someone really REALLY wants me to see their point. That said, the signal shown below is pretty important.
It’s in-month with a monstrously over-bearish bond sentiment backdrop similar to when we installed a red arrow on the chart below at the height of the Q1 2011 frenzy (cue the Bond King: “short the long bond!”). Chart jockeys are probably delivering the bad news of the chart’s inverted H&S, a potential for which NFTRH began managing a year ago when the 30yr yield hit our initial target of 2.5% and then recoiled as expected after the public became very concerned about inflation.
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Friday, April 01, 2022
US Interest Rate Yield Curve 101 – Steep, Flat, Inverted – What’s The Difference? / Interest-Rates / Inverted Yield Curve
By: Chris_Vermeulen
The yield curve plots the current yield of a range of government notes and bonds in the “primary market.” The worldwide bond market – including private and government debt — currently represents about $120 trillion in outstanding obligations. The United States accounts for roughly $46 trillion (39%).
The U.S. government finances its spending by collecting taxes and issuing debt. More specifically, the U.S. Treasury funds deficit spending by issuing debt instruments with a range of maturities.
- Treasury Bills have maturities from one month to one year.
- Treasury Notes have maturities from two to ten years.
- Very long-term debt is issued as Treasury Bonds with 20- and 30-year maturities.
Friday, March 25, 2022
The Yield Curve flattener and a Coming Transition / Interest-Rates / Inverted Yield Curve
By: Gary_Tanashian
As the Yield Curve flattens, this inflation is different from the 2020 inflation
In 2020 an inflationary yield curve steepener was in the bag as the Fed dropped and pinned the Funds Rate and sucked up every bond it could get its hands on (in order to monetize/print). The bond market made the logical signals about the resulting inflation as the short end was pinned by a combination of Fed policy and the frightened, risk ‘off’ herds clustered in T-Bills and short-term Treasuries, relative to the long end.
Gold and then stocks picked up on it first, followed by commodities, which were tardy but are now the star performer late in the inflation cycle. Hmm…
Side Note: The most buyable looking chart in the lower panels? On this big picture, that would be gold.
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Tuesday, February 15, 2022
US Treasury Bonds Not Reflecting Risks Like They Usually Do – Where’s The Beef? / Interest-Rates / US Bonds
By: Chris_Vermeulen
I’ve been paying close attention to Bonds as the global markets react to rising inflation and global central bank moves recently. The US Federal Reserve has yet to take any actions to raise rates, but we all know it will come at some point. Longer-term bonds are acting as if these risks are much more subdued than many traders/investors believe – which has me questioning if global central banks have overplayed the stimulus game?
Why would traditional safe-haven assets fail to act in a manner that reflects current market risks like they would typically do? Why have precious metals failed to reflect these risks also properly? Is there something brewing in traders’ minds that are muting or mitigating these traditional safe-haven assets?
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Monday, February 14, 2022
What Fed Jawbones Mean for Business / Interest-Rates / US Interest Rates
By: Gary_Tanashian
And the Fed is listening.
[edit] After this post was published another Hawkish jawbone came in the form of James Bullard and a call for a larger rate hike in March. CME Group Fed Futures traders quickly adjusted their expectations to a .5% March hike at the behest of the Bullard jawbone. The point of my post is intact, and this heavy dose of expectations management may indeed result in .5% in March or it could be a shock absorber for the post’s original thesis, which is that a .25% hike could come sooner. The point I made at the end of the post still holds: “If the Fed is caught this far off guard, anything is possible”.
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Monday, February 07, 2022
Powell the Pivoter Cannot Now Pivot Back to a Dove / Interest-Rates / US Interest Rates
By: Michael_Pento
The current Fed Chair is perhaps best known for his quick pivots from hawkish back to dovish and vice versa. Maybe he is just too dependent on the prevailing winds of the current economic data. Or, perhaps more accurately, he is most swayed by the performance of the stock market. In either case, Jerome Powell received more reasons to become hawkish just one day following his already hawkish FOMC press conference.
The Bureau of Economic Analysis reported Q4 2021 GDP growth at a 6.9% SAAR. This is a big problem for the Fed, since it falsely believes inflation comes from an economy that is growing too fast. Add in the 7% CPI print for December, and you have a Fed that now understands it is far behind the inflation curve and it's time to pivot towards an even tighter monetary policy stance. Nevertheless, the FOMC fails to grasp the rapid growth and inflation was engendered by unprecedented fiscal and monetary stimulus, which has now gone in reverse.
Sunday, February 06, 2022
New US National Debt Milestone Signals Currency Crisis Ahead / Interest-Rates / US Debt
By: MoneyMetals
The U.S. reached a $30 trillion milestone this week. Instead of signifying a great achievement, though, it serves as a dire warning for American workers, investors, and retirees.
On Tuesday, the Treasury Department reported that total public debt outstanding surpassed $30,000,000,000,000.
That’s a lot of zeroes. It amounts to $231,000 per household.
Interest on the debt currently costs taxpayers $900 million per day, or $330 billion per year. Enormous as that sum may seem, it is artificially low at present due to depressed interest rates.
Monday, December 27, 2021
Will Santa Give Us Interest Rate Hikes for 2022? / Interest-Rates / US Interest Rates
By: P_Radomski_CFA
If the Fed normalizes its balance sheet and markets freak-out, it will be a bridge too far. But interest rate hikes won’t crash a strong US economy.
With Fed officials increasingly hawked up, the narrative shifted from a tapering of asset purchases to potential interest rate hikes. And now, with whispers of the Fed plotting to normalize its balance sheet, questions have arisen over the potential impact on the PMs.
To explain, I wrote on Dec. 20:
After admitting that inflation “is alarmingly high, persistent, and has broadened to affect more categories of goods and services,” Waller implored the Fed to sell some of its bond holdings.
For context, tapering means that bonds are purchased at a slower pace or not at all. However, even zero purchases result in the Fed’s nearly $8.76 trillion in bond holdings remaining constant. Conversely, if the Fed reduces its balance sheet by selling bonds to private investors, it’s akin to a taper on steroids. Waller said:
“If we start doing some balance sheet runoff by summer, that’ll take some pressure off, you don’t have to raise rates quite as much. My view is we should start doing that by summer.”
Monday, December 20, 2021
Fed WAY behind Curve, Real Rates to Remain Deeply Negative / Interest-Rates / US Interest Rates
By: MoneyMetals
As the Federal Reserve prepares to taper its asset purchases, investors are preparing to adjust their portfolios.
Some are dumping gold. They could be making a big mistake.
Sentiment toward precious metals turned negative as prices fell over the past few weeks. Gold and silver markets continued to slide ahead of the Federal Reserve’s policy meeting on Wednesday.
However, they got a bounce following the Fed’s announcement that it would double the pace of tapering in 2022 and raise interest rates up to three times.
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Saturday, December 18, 2021
Fed Interest Rate Actions 1999 to Present – Stock Market What’s Next? / Interest-Rates / Financial Markets 2021
By: Chris_Vermeulen
Let’s continue to explore the past 20 years of US Fed actions. I believe the US Fed has created a global expansion of both economies and debts/liabilities that may become somewhat painful for foreign nations – and possibly the US.
Reading The Data & What To Expect in 2022 And Beyond
In the first part of this research article, I highlighted the past 25 years of US Fed actions related to the DOT COM bubble, the 9/11 terrorist attack, the 2008-09 US Housing/Credit crisis, and the recent COVID-19 virus event. Each time, the US Federal reserve had attempted to raise interest rates before these crisis events – only to be forced to lower interest rates as the US economy contracted with each unique disruption. The US Fed was taking what it believed were necessary steps to protect the US economy and support the global economy into a recovery period.
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Wednesday, December 15, 2021
US Fed Interest Rate Actions 1999 to Present – What’s Next? / Interest-Rates / US Interest Rates
By: Chris_Vermeulen
I find it interesting that so much speculation related to the US Federal Reserve drives investor concern and trends. In my opinion, the US Federal Reserve has been much more accommodating for the global economy after the 2008-09 US Housing Market crash. The new US Bank Stress Tests and Capital Requirements have allowed the US to move away from risk factors that may currently plague the global markets. What do I mean by this statement?
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Tuesday, December 07, 2021
US Bonds Yield Curve is not currently an inflationist’s friend / Interest-Rates / US Bonds
By: Gary_Tanashian
The yield curve is flattening
I don’t cheer-lead a given view, but if I were to do that I’d be cheering for a yield curve flattener to put a correction to inflationist dogmatists quoting von Mises to the herds and otherwise sloganeering about inflation and a “commodity super cycle” (that term is pure promo).
Well, the curve is flattening.
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Thursday, November 11, 2021
Interest Rate Normalization is Impossible / Interest-Rates / US Interest Rates
By: Michael_Pento
Stagflation is undermining the U.S. economy, and that poses a huge problem for Mr. Powell and his merry band of money printers.Inflation is running at a pace that is just about 3x faster than real GDP growth--a figure the Fed can no longer ignore. This is why Mr. Powell had no choice but to announce at November's FOMC press conference that the Fed would reduce its purchases of MBS and Treasuries by $15 billion each month starting this month. Therefore, officially pushing the economy further towards the edge of the monetary cliff. Meaning, the amount of new monetary creation will go from a record $120 billion per month to zero by the middle of 2022.
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Saturday, October 09, 2021
When Will the Fed Taper? / Interest-Rates / US Interest Rates
By: The_Gold_Report
In this review of the quarter, Adrian Day, founder of Adrian Day Asset Management, discusses the Federal Reserve's asset purchases, its talk of tapering them, and what that could mean for the broader markets.
To taper or not to taper, that is the question. So far, the Federal Reserve’s constant talk and threats of an impending taper have performed the job better than actually doing anything. Stocks are flat, gold is down, as are bonds. But markets are beginning to grow weary of the constant threats with no action. When the Fed actually starts to taper, we may see markets turn. It was a poor quarter in most major markets and assets.
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Thursday, October 07, 2021
Here's What Really Sets Interest Rates (Not Central Banks) / Interest-Rates / US Interest Rates
By: EWI
See "powerful evidence that the Fed is not in control of interest rates"
Most everyone is familiar with the phrase: "Keep your eye on the ball," which of course means -- focus on what really matters.
Those who seek clues about the direction of interest rates believe the "ball" is their nation's central bank.
For example, in the U.S., Federal Reserve announcements are the subject of countless financial headlines, like this one from Sept. 22 (Reuters):
Fed signals bond-buying taper coming 'soon,' rate hike next year
The assumption in most of these headlines is that the central bank determines the direction of rates.
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Monday, September 27, 2021
The U.S. Government Plans to Default on Debt the Dishonest Way / Interest-Rates / US Debt
By: MoneyMetals
Debt troubles in China and Washington, D.C. helped boost safe-haven demand for precious metals early this week. By Thursday, however, investors piled back into stocks and sold safe havens like gold and silver again.
Platinum is making news for an unusual reason that has nothing to do with its primary demand sources in the automotive and jewelry industries. Instead, it has to do with the political fight over raising the debt ceiling.
Some Democrats are proposing that the Treasury Department issue a $1 trillion platinum coin as a way around the need to increase borrowing capacity.
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Monday, August 30, 2021
Fed Chairman Doubles Down on Loose Money as Inflation Rages / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Precious metals markets are rallying on some early Friday remarks from Jerome Powell. The Federal Reserve chairman is speaking at the Jackson Hole virtual gathering of central bankers Friday and Saturday, and he started off by emphasizing the view that high inflation readings will come down soon.
There is still a question of whether anything has changed since the last Fed policy meeting. There, Fed officials had suggested they may soon begin tapering their asset purchases.
Something that could give the Fed’s money masters an excuse to back down on tapering is the recent global surge in COVID cases linked to the Delta variant.
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Sunday, August 29, 2021
Jackson Hole Ahead! What Should We Expect? / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
Gold prices fluctuate around $1,800, waiting for signals from the Fed at Jackson Hole. Which way will we go after the conference?Finally! The price of gold returned above $1,800 this week, as the chart below shows. It’s a nice change after the slide in early August. Although gold has rebounded somewhat, bulls shouldn’t open the champagne yet. A small beer would be enough for now, as the yellow metal already retreated from $1,800 on Wednesday (the fact that gold was unable to stay above this level is rather disappointing).
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Wednesday, August 25, 2021
Why Expectations for Fed Tightening Are Misplaced / Interest-Rates / US Interest Rates
By: MoneyMetals
Stimulus addicted markets ran into headwinds last week. Fed watchers found some hints about interest-rate tightening in the just-released FOMC’s July meeting minutes. That was all it took to rattle Wall Street.
Stocks have since recovered some of the initial losses, but it looks like history is about to repeat.
The U.S. economy is largely a mirage based on stimulus. Without artificially low interest rates, bond purchases (aka debt monetization), repo market support, and other extraordinary measures the central planners put in place, stock prices would fall.
There was a stock market correction in the fall of 2018 after which the Fed reversed course on tightening. And when COVID struck in March of 2020, the Fed quickly surrendered – cutting the funds rate all the way back to zero.
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Sunday, August 22, 2021
Top Three Biggest Mistakes Made By Options Traders / Interest-Rates / Options & Warrants
By: Chris_Vermeulen
I have been trading options and coaching / mentoring new options traders for years. I have seen new traders who were blindly successful and others who were so frustrated on the verge of giving up, I have seen it all. Over the years, I have seen some very common themes among all traders, especially with options. Options trading can be very rewarding but it is not as easy as buying and selling stocks. There are many more factors and variables you must take into consideration when trading options especially if you are swing trading them or holding them for an extended period of time.
There is a certain skill it requires that is a mix of technical, statistical, and fundamental analysis. These are not skills everyone has and you have to master all three if you want to be a really successful trader. I have noticed stock traders tend to have a good amount of fundamental and technical skills but usually lack in the statistical area. This can cause a problem when it comes to their success. While trading stocks, this might be a great formula that works but when switching to options it could be a losing formula. Many traders don’t know where they went wrong.
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Monday, August 16, 2021
US Bond Market Long-term Trend / Interest-Rates / US Bonds
By: Nadeem_Walayat
The screeching that one hears from the likes of Michael "Big Short" Burry is that the US Bond market is about to collapse. We'll all I can see when looking at the long-term chart is that since the pandemic panic bond market spike of March 2020, bonds have been in a correction against it's primary bull trend, and that correction appears to have ENDED.
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Friday, July 30, 2021
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory / Interest-Rates / US Bonds
By: Arkadiusz_Sieron
The bond yields dropped despite surging inflation. It’s not a usual thing on the market, so we have to ask: what does it mean for gold?The markets hide many mysteries. One of them is the recent slide in the long-term bond yields. As the chart below shows, both the nominal interest rates and the real interest rates have been in a downside trend since March (with a short-lived rebound in June). Indeed, the 10-year Treasury yield reached almost 1.75% at the end of March, and by July it decreased to about 1.25%, while the inflation-adjusted yield dropped from -0.63% to about -1%.
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Thursday, July 08, 2021
US Interest Rates: Making the Improbable Today’s Reality / Interest-Rates / US Bonds
By: Paul_Rejczak
The US Federal Reserve has raised its interest rate guidance for 2023; and potentially late 2022. Oddly enough, interest rates have moved lower since the last Fed meeting.
I see an opportunity today.
You would think that the higher interest rate guidance would have created a bump higher in the $TNX (Ten-Year Note Yield). However, wouldn’t that make too much sense? The more trading experience I have gotten over the last two decades, the clearer it is, that logic doesn’t always work - unless you are early enough.
If you have been following along, you know that yesterday, I discussed the S&P Banking sector, namely KBE, as we wait for a pullback to some key technical levels.
It got me thinking: the Ten-Year Note yield should be very similar to that trade.
Friday, June 18, 2021
FOMC Surprise Takeaways / Interest-Rates / US Federal Reserve Bank
By: Monica_Kingsley
The Fed didn‘t play ostrich on inflation, but didn‘t take action either. While acknowledging that 2021 inflation would come at 3.4%, it hinted at 2 rate hikes before 2023 is over – and didn‘t mention taper at all.
It‘s though by no means guaranteed that 2021 inflation would come in at this or lower level. Far from it, but Fed‘s yesterday posturing might be a self fulfilling prophecy in one aspect, and that is commodity prices fanning the inflation flames – thus far though, $CRB doesn‘t confirm that, which has bullish implications for oil and beyond. Stock bulls too can look forward for extending gains without a meaningful correction. As for the labor market pressures, I look for these not to be going away soon.
Wednesday, June 09, 2021
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
‘Taper’ talk from the Federal Reserve is back in focus. But for now, it’s all talk and no action.
Last week, former New York Fed President William Dudley said the central bank will begin the process of tapering – winding down its monthly asset purchases – by year end.
While echoing current Fed policymakers’ position that the recent spike in prices is “transitory,” Dudley acknowledged the likelihood of inflation persisting above 2% longer term.
Tuesday, June 08, 2021
Fed’s Tools are Broken / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
The U.S. central bank has metastasized from an institution that was originally designed to assist distressed banks, to one that believes its purview now includes perpetuating asset bubbles, fighting global warming and reconciling racial inequities. Another distortion of the original purpose of the Fed is that its mandate has changed from providing stable prices and full employment, to creating an inflation rate above 2% for a period of time equivalent to the duration it was below that level.But the members of the FOMC claim there is nothing to fear if inflation were to ever grow too hot because it has the tools to bring it under control. In other words, when necessary, the FOMC can not only stop QE but it can raise rates aggressively enough to vanquish inflation without destroying the markets and economy along the way. Let’s see just how true this contention really is.
But before we get to how “successful” the fed will be to tame inflation, a funny thing happened on the way to achieve its 2% goal. Our central bank focuses on the incredibly distorted core rate of inflation found in the Personal Consumption Expenditures Price Index. But meanwhile, prices are surging in the real world. For instance, headline PCE inflation increased by 3.65% year over year in April. And even in the fed's preferred metric, prices jumped by 3.1% y/y. Not only this, but a slightly less massaged reading of inflation, which can be found in the headline CPI metric, had prices rising by 4.2% y/y.
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Sunday, May 23, 2021
US 10-Year Note Yields: Opportunity to Benefit? / Interest-Rates / US Bonds
By: Submissions
Given yesterday’s headlines with Bitcoin plunging, did you take a peek at interest rates? Could a stronger dollar lie ahead with higher rates?
While everybody’s eyes are peeled on cryptocurrencies and a crowded short DXY trade, let’s revisit the potentially polar opposite of a crypto instrument: 10-year notes. Yields rose on Wednesday, settling at 1.683%, just off the intraday high of 1.692%. I like to take a look when few others are looking. As yields closed near the highs of the day, with other risk assets seeming out of favor, at least temporarily, let’s revisit the 10-year notes.
Thursday, April 29, 2021
Get Ready for the Fourth U.S. Central Bank / Interest-Rates / Central Banks
By: Michael_Pento
We all should be aware that the current Federal Reserve of the Unites States is not America’s first central bank. In fact, we’ve had a few others before this current disastrous iteration came into existence in 1913. We hope and believe it won’t be long before this latest version goes away for good.
Our first central bank was founded in 1782 and was called The Bank of North America. Soon after, in 1791, The Bank of North America became The First Bank of the United States chartered by Congress. However, in 1811 its twenty-year charter expired and was not renewed.
Five years later Congress chartered its successor called the Second Bank of the United States that lasted from 1816-1836. This Central Bank collapsed for the same reason the others did before it: they were, for the most part, filled with corruption and became progenitors of speculation and economic instability.
Wednesday, April 14, 2021
U.S. Dollar Junk Bond Market The Easiest Money in History / Interest-Rates / US Bonds
By: EWI
The latest data from Refinitiv shows that companies have raised a record $140 billion in the U.S. dollar junk bond market during the first quarter of this year. That beats the previous record set during the second quarter last year when companies scrambled to issue debt in a bid to raise cash during the pandemic. The three biggest issuance quarters in history have been set in the past year. With investors falling over themselves to lend money to any venture offering a U.S. dollar yield above 4%, companies are now not only finding that they can raise money easily in order to roll over existing debt, but some are using the proceeds to pay dividends to owners. It's beyond absurd.
When a mania is in full force, though, the vast majority of participants are blind to the absurdity. Investors, for instance, think that they must lend because 4% or higher is such a juicy yield when compared with anything else. And the central banks will not let companies fail, so it's a free lunch.
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Wednesday, April 07, 2021
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit / Interest-Rates / Quantitative Easing
By: MoneyMetals
Central bankers and their comrades in Washington DC changed course in 2020. The policy shifted from “print money and hand it to Wall Street” to “helicopter money” in the form of direct payments and loans to citizens.
The fiscal stimulus, like the Fed’s monetary stimulus before it, provided a fix that addicted markets needed to stay high.
The helicopter money represents another “temporary” measure that will almost certainly become permanent. Much like Quantitative Easing and Zero Interest Rate Policy, bureaucrats will have a very hard time stopping what they have started.
Friday, March 26, 2021
Freedom Fatality of the Fed / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
In a recent interview, I referred to the Fed as a disgusting institution. I want to explain why I believe that to be the case, as I do not like to disparage anyone or any entity indiscriminately or capriciously—only when absolutely necessary. To be clear, central bankers may not be nefarious in nature, but their product is iniquitous.
Any entity whose very purpose for existence is to destroy markets is inherently disgusting and, in the end, one that ends up being evil. At its core, the Fed is Robin-Hood in reverse; stealing from the poor by destroying their purchasing power to give to the rich by inflating their asset prices. The Fed, along with all central banks, are inherently freedom killers, middle-class eviscerators and economic destabilizers; regardless of stated intentions. If that wasn’t bad enough, the problem now is that the Fed has usurped markets to the point of no return.
Thursday, March 25, 2021
It’s the Bond Market, Stupid / Interest-Rates / US Bonds
By: Gary_Tanashian
As our Continuum chart predicted over a year ago, Jerome Powell was called to his higher inflationary powers when the macro markets liquidated with great violence and terror. This link shows the Continuum (30yr yield and its monthly EMA 100 limiter) as it was then, begging for inflationary action…
Oh Jerome? Bond market calling…
Below is the Continuum today. Since the linked post from February, 2020, a lot has happened and it has been according to the plans we laid out last spring. The plan was inflationary because the Fed was going into steroidal inflation mode. The ‘Fed comfort box’ on the chart has thinned out from the original post because the red dotted limiter (monthly EMA 100) has declined appreciably since then.
These many months the NFTRH target has been 2.5% to 2.7% on the 30yr Treasury yield. This week that zone’s lower bound got dinged. It is coming time for a cool down at least, if the macro reflation is going to get a second wind. What could provide that second wind?
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Tuesday, March 09, 2021
US Bond Market Rocks the Richter Scale / Interest-Rates / US Bonds
By: Michael_Pento
The global sovereign bond market is fracturing, and its ramifications for asset prices cannot be overstated. Borrowing costs around this debt-disabled world are now surging. The long-awaited reality check for those that believed they could borrow and print with impunity has arrived. From the U.S., to Europe and across Asia, February witnessed the biggest surge in borrowing costs in years.Thursday, February 25, 2021, was the worst 7-year Note Treasury auction in history. According to Reuters, the auction for $62 billion of 7-year notes by the U.S. Treasury witnessed demand that was the weakest ever, with a bid-to-cover ratio of 2.04, the lowest on record. Yields on the Benchmark Treasury yield surged by 26 bps at the high—to reach a year high of 1.61% intra-day--before settling at 1.53% at the close of trading.
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Wednesday, February 24, 2021
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) / Interest-Rates / US Debt
By: Nadeem_Walayat
One of the reasons why my analysis of April 2019 was more subdued in terms of the prospects for US house prices than it would otherwise have been is because the yield curve was flirting with inversion, that I concluded that the Fed would not allow to take place and thus adopt whatever measures were necessary to PREVENT inversion that tends to foreshadow lower inflation and recessions.
The Fed succeeded in preventing a sustained inversion during 2019, with the yield curve massaged to hover around 0.2% that is until the pandemic broke and the Fed panicked and opened the monetary flood gates sending the yield curve soaring to currently stand at 1% as the bond market is discounting higher future inflation as the consequence of rampant money printing.
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Sunday, February 07, 2021
TREASURY YIELDS SUGGEST A TOP WITHIN THE NEXT 6 MONTHS / Interest-Rates / US Bonds
By: Chris_Vermeulen
Historically, whenever the Treasury Yields fall below zero, then recover back above zero, the US/Global markets reach some peak in price levels within 3 to 8+ months. My research team and I believe the actions of the global markets may be setting up for a future peak in price levels sometime in next 6 months. We believe this will start when the Treasury Yields cross above the “Breakdown Threshold”.
expect A Continued Rally As Long As Yields Stay Below Certain Levels
In 1998, a very brief drop below zero in yields prompted a minor pullback in the markets before the bigger top setup in 2000. This pullback in price aligned with what we are calling the “Breakdown Threshold” level on Yields near 1.20. After the Yields crossed this Threshold, briefly, in 1999, they fell back below this level and the US stock market continued to rally toward an ultimate peak in 2000.
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Thursday, January 28, 2021
US Interest Rate Threshold Keeps Dropping / Interest-Rates / US Interest Rates
By: Michael_Pento
Initial Jobless claims totaled 900,000 for the week ending January 16th, after shedding 965,000 in the week prior. These numbers are over four times greater than they were a year ago. I find this to be not only sad but also remarkable in that we are still losing close to one million jobs per week a year after the Wuhan virus first broke out. More signs of economic stress were found in the December Retail Sales report. Sales dropped 0.7% last month, and the data for November was revised down to show a decline of 1.4%, instead of the 1.1% previously reported. Figures such as these illustrate just how fragile the economy still is, which will automatically put upward pressure on the level of outstanding debt. And, gives the new Administration impetus to pass more and bigger fiscal stimulus packages. That's really bad news for any of us left that still care about debt and deficits.Read full article... Read full article...
Wednesday, January 06, 2021
Fed Taper Nervous Breakdown / Interest-Rates / Quantitative Easing
By: Michael_Pento
The next time the Fed reduces its bond purchase program the market reaction should be more like a nervous breakdown rather than just a tantrum.
First let’s review a bit of the historical histrionics surrounding the initial Taper Tantrum. Back in September 2012, the Fed’s Quantitative Easing program was running at the level of $85 billion per month. The asset purchase program consisted of both Mortgage-Backed Securities and Treasuries. Then, in December 2012, Fed Chair Ben Bernanke expanded his massive QE 3 scheme by making its duration unlimited. But by May 2013, the time had finally arrived to start discussing the tapering of its asset purchases. And in December of that year Tapering officially began; with QE ending by October 2014. Of course, the Fed would be back in the QE game six years later. But at the time, the overwhelming consensus thinking was that the 100-year economic storm had passed and we would never witness such extraordinary actions by our central bank ever again.
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Saturday, December 26, 2020
Global Tipping Point: "Good" Debt Vs. "Bad" Debt (Which is Winning?) / Interest-Rates / Global Debt Crisis 2020
By: EWI
All major U.S. economic depressions were "set off" by this single factor
Isn't all debt "bad"?
Well, in a word, no.
Broadly speaking, there are two types of debt. One of them actually adds value to the economy if handled in the right way, so you might call this a "good" form of debt. However, there's another type of debt (or credit) which hurts the economy.
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Monday, December 21, 2020
Overstretch: The Long Shadow of Soaring US Debt / Interest-Rates / US Debt
By: Dan_Steinbock
If the past year was dominated by the huge human costs of COVID-19, the next few years will be about its economic aftermath, including the alarming rise of US debt. What’s needed is multilateral cooperation - a new 'Grand Alliance.'
On Friday, Congressional leaders failed to secure a bipartisan deal on a $900 billion pandemic relief package. A government shutdown was avoided only with a 2-day extension.
A protracted shutdown would amplify the risks for pandemic escalation and economic crisis, amid the long-awaited vaccine rollout. Bipartisan tensions are compounded by the impending Georgia Senate runoff races in January that will determine control of the chamber in the Congress.
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Monday, December 07, 2020
What Do We Do with All This Debt? / Interest-Rates / US Debt
By: John_Mauldin
Before the coronavirus pandemic I expected the US would hit the debt wall in the late 2020s. Now, the debt is growing even faster and we will hit that wall a lot sooner.
What happens when we come to the place where we have to deal with all that debt?
Fortunately, my favorite central banker, Bill White -- who was the Bank for International Settlements' chief economist -- did a brilliant interview with my friend Mark Dittli in Switzerland in November that gives us some answers.
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Monday, November 23, 2020
Evolution of the Fed / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
The evolution of humankind supposedly goes something like this: From a void and through a series of serendipitous happenstances arose; galaxies, the Earthly Primordial ooze, Bacteria, Monkeys, and eventually homo sapiens (wise man). The evolution of the Fed is deserving of equal derision, but with a much worse outcome.Back in 1913, the Federal Reserve Act gave birth to the Federal Reserve System. The law gave power to the central bank to become a lender of last resort to financial institutions. If a bank found itself in trouble, it could approach the discount window and exchange 100% guaranteed government debt for Fed credit at a deep discount. This process defined the majority of the Fed's role for decades to follow.
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Wednesday, November 18, 2020
US Bond Market: "When Investors Should Worry" / Interest-Rates / US Bonds
By: EWI
The cost of insuring against default has been declining – what this may suggest
You may recall hearing a lot about “credit default swaps” during the 2007-2009 financial crisis.
As a reminder, a CDS is similar to an insurance contract, providing a bond investor with protection against a default.
In the past several months, the cost of that protection has fallen dramatically.
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Friday, November 13, 2020
Eyeing Upside in US Bonds TLT / Interest-Rates / US Bonds
By: Mike_Paulenoff
Is it a coincidence that 10-Year YIELD climbed to 1.00% from 0.75% in the days following Pfizer's vaccine announcement (and perhaps in reaction to the apparent result of the Presidential Senate elections), and then hit a wall?
Not if we consider the big bad Fed lurking out there, scarfing up all Treasury supply even if the economic data appear to be stronger than expected.
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Friday, November 13, 2020
Global "Debt Mountain": Beware of This "New Peak" / Interest-Rates / Global Debt Crisis 2020
By: EWI
Prepare now for a situation that is "building to an epic finale"
Most people going about their daily business probably never give a moment's thought to global debt.
But, in EWI's view, the topic deserves serious attention.
You only have to think back to the 2007-2009 subprime mortgage meltdown to know why. Of course, subprime mortgages are a form of debt, and when many of these loans turned sour, the entire global financial system teetered on the brink of collapse.
But, why were so many of these bad loans made in the first place? It boils down to one word: confidence ... confidence that the loans would be repaid, confidence that the stock market would continue to rally, confidence in the economy and confidence in the future, in general.
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Monday, November 09, 2020
Is Fed Chairman Powell the Real Election Winner? / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
As President Donald Trump continues to insist that he will be the winner of the election after all the legitimate votes are counted and the illegitimate ones thrown out, at least one publication has declared a different winner. Not Joe Biden, but Federal Reserve chairman Jerome Powell.
The Wall Street periodical Barron’s argued Powell has become a more important figure for markets than whoever occupies the White House.
Even as the presidential election outcome has been beset by uncertainty all week, Wall Street didn’t panic. Quite the opposite. Stocks surged on expectations for divided government and gridlock – and four more years of Fed stimulus.
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Wednesday, November 04, 2020
How to Stay Ahead of Price Turns in the U.S. Long Bond Market / Interest-Rates / US Bonds
By: EWI
This method of analysis applies to any widely traded financial market
Back in August, the volatility index for Treasury debt was at an all-time low, indicating record commitment to the idea the markets would continue to calmly rise.
Indeed, here's a July 27 Bloomberg headline:
Bond Investors Are Getting Fresh Reasons to Stay Record Bullish
Bloomberg mentioned U.S.-China tensions as a reason that investors would seek a safe haven in bonds, hence, pushing prices higher.
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Wednesday, October 14, 2020
US Debt Is Going Up but Leaving GDP Behind / Interest-Rates / US Debt
By: John_Mauldin
We have plenty of evidence that US debt will balloon to $50 trillion by 2030, maybe more. Many smart people conclude that, in the meantime, the federal debt isn’t a problem.
Looking at the numbers as a percent of GDP—and considering the CBO long-term forecasts out to 2050—Sam Rines, whom I greatly respect, writes this:
"In its latest round of projections, by far the most intriguing portion of the analysis related to the dynamics around the US federal debt load. The US debt load has increased dramatically due to the response to COVID, but the ability to service the US debt load is actually improving.
Thursday, October 08, 2020
5 Consequences of US Debt at $50 Trillion / Interest-Rates / US Debt
By: John_Mauldin
With the US set to breach the $50 trillion mark in debt by 2030, here are five things we should start thinking about sooner rather than later.
1. Raising taxes will not solve the problem. Of course, it could help reduce the deficit some, but it would be more of a token. That is just the reality. From the Tax Foundation, here are the real numbers as of 2017.
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Monday, October 05, 2020
To US $50 Trillion Debt (and Beyond) / Interest-Rates / US Debt
By: John_Mauldin
In my 2020 forecast letters, published in January as the pandemic was just gaining attention, I noted this:
"When we do have a recession, which again I point out is likely to be after the election (the only meaningful data point between now and the end of next year), the deficit will explode to over $2 trillion per year and, without meaningful reform, never look back. That puts US debt at $35 trillion+ by the end of 2029."
According to CBO, this deficit -- which I said optimistically, in hindsight, would be over $2 trillion in a recession year -- will be more like $3.3 trillion.
What does this do to the national debt? First, we have to define some terms.
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Tuesday, September 29, 2020
Fractional-Reserve Banking Is The Elephant In The Room / Interest-Rates / Global Financial System
By: Kelsey_Williams
The expression “elephant in the room“…
“…an important or enormous topic, question, or controversial issue that is obvious or that everyone knows about but no one mentions or wants to discuss because it makes at least some of them uncomfortable or is personally, socially, or politically embarrassing, controversial, inflammatory, or dangerous. (source)
A wordy definition, yes; but it is applicable to our topic of Fractional-Reserve Banking. After reading the rest of this article, you should be able to see just how important and enormous Fractional-Reserve Banking is; as well as how dangerous.
Lets’s start with some history.
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Tuesday, September 22, 2020
Central Banking Cartel Promises ZIRP Until at Least 2023 / Interest-Rates / Negative Interest Rates
By: MoneyMetals
Gold and silver investors who were hoping Wednesday’s FOMC meeting would be a catalyst for a major breakout move were largely disappointed.
The metals complex didn’t see an immediate boost from the Federal Reserve’s dovish policy meeting. Still, the central bank’s commitment to an accommodative monetary policy is set to play out not just over the course of a week, but of years to come.
On Wednesday, the Federal Reserve announced it would continue to hold its benchmark interest rate near zero. That came as no surprise.
However, the extent of the Fed’s commitment to avoid any rate hikes in the future raised the eyebrows of many veteran observers of monetary policy. Not only did members of the central banking cartel vow to keep rates down for the remainder of the year. They also signaled there would be no rate hikes in 2021.
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Wednesday, September 09, 2020
QE4EVER! / Interest-Rates / Quantitative Easing
By: Nadeem_Walayat
Virtually everything that cannot be easily printed is rocketing higher which includes GOLD! It's not hard to see why as a consequence of rampant money printing by governments across the world in the wake of the Coronavirus Pandemic economic depression. For instance the UK alone looks set to print about £550 billion this year most of which will be monetized by the Bank of England so that the government can pay the wages of about 1/3rd of Britains workforce for a good 6 months with likely many more economic stimulus measures to follow over the next 6 months towards fighting the Pandemics dire economic consequences.
Whilst the United States has printed $2.2 trillion of stimulus dollars to date with at least another $1.3 trillion to come, that's $3.5 trillion which dwarfs the 2008 financial crisis bailout of $720 billion. Funneling stimulus checks on an epic scale into the back pockets of every working age citizen. Printing money has REAL consequences which is REAL inflation hence what we have been witnessing in markets across the spectrum, and whist I have yet to take a peak at the housing markets, I would not be surprised if the UK housing market at least will start to experience a money printing inflationary boom over the coming year, this despite the fact that people have less disposable income to buy housing, but more on that in a future article.
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Thursday, September 03, 2020
Understanding the Fed's True Mandate / Interest-Rates / US Federal Reserve Bank
By: The_Gold_Report
Michael Ballanger interprets the motives of the Federal Reserve and their impacts on the "haves" and "have nots" in America and beyond.
This week, the financial community around the globe was handed a "new approach" by the Federal Reserve Board of the United States that essentially flipped the middle finger at savers, senior citizens on limited pensions and proponents of sound money principles. Before I expand upon this outrage, let me expound upon the background of the current Fed Chairman, Jerome Powell.
Judging from the accolades and fawning praise showered upon this man (as the S&P and NASDAQ hit record levels fueled exclusively by Fed stimuli), one might think that he hails from the academic world, a scholar with vast experience in macroeconomic theory, or at least extensive dealings in the retail banking sector. His grandfatherly deportment portrays great studiousness and wise counsel as he does his very damnedest to convey that image with perennial gray suits and trademark purple ties. If one could take this carefully crafted persona and make a snap favorable assessment of the man who controls the retirement lifestyles of millions of global citizens, one would be making a fatal error.
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Wednesday, August 26, 2020
Fed Rules Out Yield Curve Control (for now) / Interest-Rates / Inverted Yield Curve
By: Gary_Tanashian
That we are even having this conversation is proof that we are and have been in…Wonderland for years now.
Since at least 2001, actually. Back then Alan the Wizard Greenspan (mixing classic fairy stories, I know) began pulling levers that could never be un-pulled. There were no breadcrumbs with which to find our way back. Off the charts is off the charts. Exponential is exponential. And that’s when funny munny out of thin air entered the realm of normalcy; new normalcy where the financial system is concerned.
I assume that the ‘tool’ known as yield curve control (per this article) is part of MMT (Modern Monetary Theory) TMM (Total Market Manipulation) that the eggheads promote with not an ounce of historical monetary grounding, caution or even human-like soul. They are monetary Humanoids, AKA bureaucrats, AKA economic Ph.Ds with more statistical and theoretical knowledge than common sense. They released the FOMC minutes and policy micro-managers offer their interpretations.
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Tuesday, August 04, 2020
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs / Interest-Rates / Corporate Bonds
By: EWI
Default rates of low-grade corporate debt are risingThe demand for junk bonds is running high among global investors -- again.
As the Wall Street Journal noted on June 9:
Europe's riskiest corporate debt has rallied to pre-crisis levels.
Elliott Wave International's July Global Market Perspective, a monthly publication which covers 40-plus market worldwide, showed this chart and said:
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Thursday, July 16, 2020
Fiscal Cliffs and the Self-destructing Treasury / Interest-Rates / US Bonds
By: Michael_Pento
We can all be very confident that there will be no change to monetary policy for a very, very long time. But there is a fiscal cliff coming—and indeed has already begun.
It is clear that Mr. Powell is all-in on his unlimited QE and ZIRP. And, that he is "not even thinking about thinking about raising interest rates." Therefore, the stock market does not have to worry about a contraction in the rate of money printing any time soon. However, equities could soon plunge due to the crash in the amount of fiscal support offered to the economy.
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Tuesday, June 30, 2020
Fed Trampoline Cliff Diving / Interest-Rates / US Interest Rates
By: Michael_Pento
We start this week's commentary with some rather depressing news from Reuters:
The ratio of downgrades to upgrades in the credit ratings of leveraged loans has spiked to a record level, five times above that hit during the last global financial crisis, reflecting the unprecedented stress in risky assets due to the coronavirus pandemic. Leveraged loans, which are loans taken out by companies that have very high levels of debt, usually with non-investment grade credit ratings--tend to be used by private equity firms as a way to fund acquisitions of such companies. The U.S. leveraged lending market has grown to more than $2 trillion, up 80% since the early 2010s, according to credit rating agency Moody's Investors Service.
Saturday, June 27, 2020
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" / Interest-Rates / US Bonds
By: EWI
Here's an update on the trend of 30-year U.S. Treasuries since the historic early March price moves
Back in early March, the behavior of the bond market was reminiscent of what unfolded during the depths of the 2007-2009 financial crisis.
Prices and yields were making major moves in a short period of time.
On March 5, the U.S. Treasury long bond closed at 173^30.0. The very next day, on March 6, the long bond rallied to 180^19.0, a whopping 6+point move, reaching a new all-time high.
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Monday, June 01, 2020
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? / Interest-Rates / Money Supply
By: Chris_Vermeulen
M2 Velocity is the measurement of capital circulating within the economy. The faster capital circulates within the economy, the more that capital is being deployed within the economy to create output and opportunities for economic growth. When M2 Velocity contracts, capital is being deployed in investments or assets that prevent that capital from further circulation within the economy – thus preventing further output and opportunity growth features.
The decline in M2 Velocity over the past 10+ years has been dramatic and consistent with the dramatic new zero US Federal Reserve interest rates initiated since just after the 2008 credit crisis market collapse. It appears to our researchers that these extended periods of zero interest rates deflate the capability of money circulating throughout the economy and engaging in real growth opportunities for investment and capital inflation.
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Thursday, May 21, 2020
Another Bank Bailout Under Cover of a Virus / Interest-Rates / Banksters
By: Ellen_Brown
Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.
When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, “No more bailouts!” But what the Act actually said was that the next time the banks failed, they would be subject to “bail ins”—the funds of their creditors, including their large depositors, would be tapped to cover their bad loans.
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Monday, April 20, 2020
Federal Reserve Funds 165% Of Record Pandemic Deficit Spending Through Monetary Creation / Interest-Rates / Quantitative Easing
By: Dan_Amerman
Two extraordinary and unprecedented actions are being taken in the attempt to contain the economic damage from the national shutdown, and thereby attempt to prevent a depression. Each are on a scale we have never seen before, and each are almost certain to be very long lasting.
Even if the actions are "successful" - a depression is prevented and a severe recession is shortened - these radical actions occurring over a matter of months and years are not only likely to dominate our investments, savings and retirements throughout the rest of the 2020s, but they are likely to still be changing our lives decades from now, long after the COVID-19 pandemic has been forgotten by most.
Between the economic damage to the nation, the lost earnings and careers for individuals, and the costs of the containment of that damage, the shutdowns being used to "flatten the curve" are likely to be the single most expensive event in U.S. history. How the expenses of attempted containment are funded - will change everything, and the effects will stay with us for the rest of our lives.
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Saturday, April 11, 2020
Federal Reserve Notes Are Now “Backed” by Junk Bonds / Interest-Rates / US Bonds
By: MoneyMetals
Wild price action and unprecedented interventions once again characterized this holiday-shortened trading week.
Oil prices whipsawed lower Thursday on concerns about expected oil production cuts from Russia and Saudi Arabia. But the general trend for most other assets, including metals and equities, was up – way up.
Stocks finished out the week with the major averages posting their biggest weekly gains in decades in the space of just four trading days. Investors went on a buying spree based on hopes that we will soon see a definitive peak in coronavirus cases and begin the process of restarting the economy.
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Sunday, April 05, 2020
US Federal Budget Deficits: To $30 Trillion and Beyond / Interest-Rates / US Debt
By: John_Mauldin
In my decade forecast, I projected that in the next recession that the deficit would climb to over $2 trillion. Clearly, that demonstrates I am an optimist. Here’s a chart I shared back in January.
Between reduced tax revenues and increased spending, I now expect this year’s deficit will be at least $4 trillion.
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Sunday, April 05, 2020
The Lucrative Profitability Of A Move To Negative Interest Rates - Pandemic Edition / Interest-Rates / Negative Interest Rates
By: Dan_Amerman
When it comes to the recession that is being created by the pandemic lockdowns - then the U.S. government and Federal Reserve have no intention of just letting the market forces play out. Instead, the intention is to contain a potential deeper round of crisis with the most extreme interventions yet. One very real possibility is for the Fed to follow the European Central Bank and the Bank of Japan, and to spend trillions of dollars to buy government (and corporate) debt while creating negative interest rates.
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Saturday, March 07, 2020
Think the Fed's Emergency Interest Rate Cut is Proactive? Think Again / Interest-Rates / US Interest Rates
By: EWI
You might think that the Fed's recent, unscheduled 50 basis-point cut in the federal funds rate is a proactive move that places the central bank at the vanguard of revolutionary uses of monetary policy. But that could hardly be further from the truth.
For decades at Elliott Wave International, we've observed that the Fed simply follows the yield on short-term government debt. We say that "the Fed follows the market" because the freely traded bond market determines the yield on government debt. The yield on short-term U.S. Treasuries started falling in earnest in February, and in March the Fed aligned its target rate with the trend of the market. There's nothing radical or revolutionary about it. The Fed merely followed the market yet again. This chart shows the recent history.
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Thursday, February 27, 2020
US Economy Permanently Addicted to Zero Interest Rates / Interest-Rates / NIRP
By: Michael_Pento
In Fed Chair Jerome Powell's appearance before Congress on February 11th, formerly known as The Humphrey-Hawkins testimony, he asserted that the U.S. economy was, "In a very good place" and "There's nothing about this expansion that is unstable or unsustainable." But compare Powell's sophomoric declaration to what Charlie Munger, Vice-Chairman of Berkshire Hathaway and Warren Buffett's longtime right-hand-man, had to say about the market and the economy, "I think there are lots of troubles coming…there's too much-wretched excess."Read full article... Read full article...
Tuesday, February 25, 2020
US Bond Market Yield Curve Patterns – What To Expect In 2020 / Interest-Rates / Inverted Yield Curve
By: Chris_Vermeulen
Quite a bit of information can be gleaned from the US Treasury Yield Curve charts. There are two very interesting components that we identified from the Yield Curve charts below. First, the bottom in late 2018 was a very important price bottom in the US markets. That low presented a very deep bottom in the Yield Curve 30Y-10Y chart. We believe this bottom set up a very dynamic shift in the capital markets that present the current risk factor throughout must of the rest of the world. Second, this same December 2018 price bottom set up a very unique consolidation pattern on the 10Y-3Y Yield Curve chart. This pattern has been seen before, in late 1997-1998 and late 2005-2008.
The reality of these two patterns setting up in the Yield Curve charts suggests that the US and global markets are going to experience a surge in volatility and a very real potential that the US and global markets will contract over the next 6 to 24 months. Within about 3 to 6+ months of these patterns setting up, one of two separate outcomes typically takes place.
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Thursday, January 30, 2020
Fed Keeps Federal Funds Rate Unchanged Again / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
The FOMC held its first meeting in both the new year and the decade, keeping interest rates unchanged. But why did the yellow metal move up regardless? Let’s examine the implications for the king of metals.
Yesterday, the FOMC published the monetary policy statement from its latest meeting that took place on January 28-29th. In line with expectations, the US central bank kept the federal funds rate unchanged at 1.50 to 1.75 percent:
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1 1/2 to 1-3/4 percent. The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee's symmetric 2 percent objective.
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Tuesday, January 21, 2020
Former Fed Official Says Government Can Borrow a LOT More / Interest-Rates / US Debt
By: MoneyMetals
Narayana Kocherlakota, the former President of the Federal Reserve bank of Minneapolis wants you to know the Federal Government can never borrow too much money.
Our government already borrowed $23 trillion and deficits are expected to exceed $1 trillion per year. He knows many Americans feel anxious about the federal government going bankrupt, and he has a simple solution.
Tuesday, January 14, 2020
Central Banklers Playing Taps For The Middle Class / Interest-Rates / Quantitative Easing
By: Michael_Pento
It is not at all a mystery as to the cause of the wealth gap that exists between the very rich and the poor. Central bankers are the primary cause of this chasm that is eroding the foundation of the global middle class. The world’s poor are falling deeper into penury and at a faster pace, while the world's richest are accelerating further ahead. To this point, the 500 wealthiest billionaires on Earth added $1.2 trillion to their fortunes in 2019, boosting their collective net worth by 25%, to $5.9 trillion.
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Wednesday, January 08, 2020
The Fed Has Quietly Started QE4 / Interest-Rates / Quantitative Easing
By: John_Mauldin
In September of last year, something still unexplained happened in the “repo” short-term financing market. Liquidity dried up, interest rates spiked, and the Fed stepped in to save the day.
Story over? No. The Fed has had to keep saving the day, every day, since then.
Friday, December 27, 2019
Will Negative Interest Rates Be the Last Straw? / Interest-Rates / Negative Interest Rates
By: MoneyMetals
Zero Interest Rate Policy (ZIRP) was considered “extraordinary” when central bankers rolled that out roughly ten years ago. At that time, people would still have laughed at the idea of negative interest rates. Lenders didn’t pay borrowers and nobody paid their bank to hold their deposits.
So much has changed in the past 10 years. Now negative interest rate policies (NIRP) look set to go viral.
Saturday, December 21, 2019
Farewell Paul Volcker Hello Monetary Madness / Interest-Rates / Quantitative Easing
By: Michael_Pento
God bless Paul Volcker. He was truly a one of a kind central banker and we probably won't see another one like him ever again. It took his extreme bravery to crush the inflation caused by the monetary recklessness of Arthur Burns and the fiscal profligacy of Presidents Johnson & Nixon. Raising interest rates to 20% by March 1980 was wildly unpopular at the time. But in the end, it was what the nation needed and paved the way for a long period of economic stability and prosperity.Back in 1971 the world fully had developed a new monetary "technology". Governments learned that money need no longer be representative of prior efforts, or energy expended, or previous production, or have any real value whatsoever. It can be just created by a monetary magic wand; and done so without any baneful economic consequences.
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Tuesday, December 10, 2019
Central Planners: Out of Room and Running Out of Time / Interest-Rates / Quantitative Easing
By: Michael_Pento
One would have to place their trust in unicorns, sasquatch, leprechauns, and the tooth fairy to believe the current economic construct is sustainable. You also need to be woefully ignorant of history. In fact, there has never been a nation that engaged in massive debt monetization and did not eventually face hyperinflation, depression, and mass chaos. There is simply no such thing as magic, and you can’t build an economy on the foundation of debt, asset bubbles, and unlimited fiat money printing.
Perhaps the reason why the market hasn’t imploded yet is that the developed world has coordinated this so-called “strategy” of unbridled central bank lunacy to engage in permanent ZIRP and QE. Therefore, a currency crisis has been averted so far. However, now that these money printers have gone all-in, the next recession or freeze-up in credit markets cannot be averted by a dovish turnaround in monetary policies, as governments already have the gas pedal to the monetary and fiscal floor. The globe now has $255 trillion in debt, and the U.S alone is adding one trillion to that pile each year. The Fed is back in QE, along with the ECB and BOJ. And, no central bank in the developed world has room any longer to cut rates enough to boost consumption.
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Wednesday, December 04, 2019
Elephant in the Room: Why Nobody Talks About Ballooning Federal Deficits / Interest-Rates / US Debt
By: MoneyMetals
The presidential race will mesmerize Americans over the next 11 months. The country hasn’t been this polarized since the Civil War.
Voters on the left desperately want a story which undermines support for President Trump. They are also searching for a candidate who can actually win.
Many Republicans are outraged about the Deep State and corporate media campaign obsession with unseating a duly elected president – and they worry an avowed socialist could win the Democratic primary and, just possibly, the general election.
Friday, November 29, 2019
Hidden Failure of SIFI Banks / Interest-Rates / Financial Crisis 2019
By: Jim_Willie_CB
Big systemically important banks could be in failure mode. A small group of big Western banks are in deep trouble. The officials might keep it all secret, working feverishly behind the curtains to patch their myriad holes with paper. These SIFI banks are likely major recipients of USFed overnight aid in the form of Repurchase (REPO) and Permanent Open Market Operations (POMO) activity, plus gigantic hidden funny money infusions. Beware the advent of chaos, with lost control. Possibly the main markets will remain tame under tight controls, while the precious metals prices zoom to multiples higher. Always keep in mind then when the POMO volume rises significantly, it means that QE has returned. When the volume is tremendous, it means that Infinite QE is here. Since Chairman Powell admitted in May that QE was a permanent feature with monetary policy, we must conclude that we are at the doorstep of Infinite QE Forever. Thus the Gold price will be required to double and the Silver price triple. All in time. It is written; it will be done.
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Friday, November 22, 2019
FOMC Minutes Reveal an Important Shift That’s Key for Gold, Too / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
Yesterday, the Fed released minutes from its last meeting. They show an important shift among the meeting participants. In September, the FOMC turned more worried about the state of the U.S. economy, while just six weeks later in October, the Committee felt more optimistic again. Indeed, the central bankers noted that certain downside risks had softened:
Uncertainties associated with trade tensions as well as geopolitical risks had eased somewhat, though they remained elevated (…) Some risks were seen to have eased a bit, although they remained elevated. There were some tentative signs that trade tensions were easing, the probability of a no-deal Brexit was judged to have lessened, and some other geopolitical tensions had diminished.
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Tuesday, November 19, 2019
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble / Interest-Rates / Negative Interest Rates
By: MoneyMetals
Mike Gleason: It is my privilege now to welcome back the one and the only Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is a frequent guest on the Money Metals Podcast and is perhaps the most well-known trends forecaster in the world. And it's always great to have him on with us.
Gerald, thanks for the time again today, and welcome back.
Gerald Celente: Oh, my pleasure. Thanks for having me on.
Mike Gleason: Well, Gerald, since we spoke last in August, the Federal Reserve has begun propping up the repo markets, and they resumed buying government debt. They tell us the program on bond purchases should in no way be confused with prior bond purchasing programs, also known as Quantitative Easing. They don't want us to worry about it. Just a little extra boost for an economy struggling with some fears over trade and a minor temporary problem in the repo markets is what they're saying. The only trouble is that hundreds of billions of dollars are involved so far, and it could wind up being trillions. So once again, the Fed is shoveling freshly-printed cash at banks and the Treasury Department. What is your guess as to why the Fed has engaged in this stealth bailout, and why aren't more people talking about it?
Thursday, November 14, 2019
Is Yield Emerging Out Of A 38-Year Bear Market? / Interest-Rates / US Bonds
By: Mike_Paulenoff
Yield has been in a bear market for 38 years. Is that about to end?
The 10-Year Treasury Yield has backed up from the Sep-Oct lows at 1.43% and 1.51% to a high at 1.97% last week. Is this a mere recovery "rally" in a still dominant 38-year bear market? Or is it a secondary low -- i.e., double-bottom -- 3+ years after the July 2016 historic low at 1.32%?
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Wednesday, November 13, 2019
What to Do NOW in Case of a Future Banking System Breakdown / Interest-Rates / Global Financial System
By: MoneyMetals
The banking system may not be as sound we’ve been led to believe. It continues to get propped up through central bank interventions, which strongly suggests it wouldn’t be able to stand on its own.
Last Thursday, the Federal Reserve injected another $115 billion into financial markets via “temporary operations.” The Fed is targeting the repo market in particular, through which banks lend to each other on an overnight basis.
For some reason, banks have grown weary of committing liquidity to each other in what should be one of the safest lending markets on the planet.
Tuesday, November 12, 2019
Fed Can't See the Bubbles Through the Lather / Interest-Rates / Liquidity Bubble
By: Michael_Pento
Recently, there has been a parade of central bankers along with their lackeys on Wall Street coming on the financial news networks and desperately trying to convince investors that there are no bubbles extant in the world today. Indeed, the Fed sees no economic or market imbalances anywhere that should give perma-bulls cause for concern. You can listen to Jerome Powell’s upbeat assessment of the situation in his own words during the latest FOMC press conference here. The Fed Chair did, however, manage to acknowledge that corporate debt levels are in fact a bit on the high side. But he added that “we have been monitoring it carefully and taken appropriate steps.” By taking appropriate steps to reduce debt levels Powell must mean slashing interest rates and going back into QE. The problem with that strategy being that is exactly what caused the debt binge and overleveraged condition of corporations in the first place.Read full article... Read full article...
Thursday, November 07, 2019
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
Did you ever watch a dog get caught up in the act of chasing its own tail? It continues to run in a circle as the object of its fascination and intention continues to elude it. The action is quite comical, almost hilarious.
The expectations of the animal are both foolish and amusing. You might feel inclined to want to communicate the unrealistic expectations to the engaged participant, but you know your efforts would be in vain.
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Thursday, November 07, 2019
Shades of 2007–2008 - Modern Central Banking Is More Vulnerable than We Think / Interest-Rates / Central Banks
By: John_Mauldin
Banks are a place where you store your cash, right? Not exactly.When you deposit money in a checking or savings account, you aren’t just letting the bank hold it on your behalf. You are lending the bank that money and the bank is borrowing it.
That’s why deposits show as a liability on the bank’s balance sheet.
We think of banks as lenders, and they are, but they’re also borrowers. They make money by lending at higher rates than they pay as borrowers, and by leveraging their deposits via fractional reserves.
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Monday, November 04, 2019
The Fed’s Policy Is Like Swatting Flies with Nuclear Weapons / Interest-Rates / US Interest Rates
By: John_Mauldin
The Federal Open Market Committee had an unscheduled meeting on October 4. That happens occasionally and they often don’t reveal it occurred until the next regular meeting. That would mean Oct. 30, in this case.
But for some reason (and you can bet they had a reason) they decided to announce this one on Oct. 11.
In between, Fed Chair Jerome Powell said in an Oct. 8 speech that the Fed would soon start growing its balance sheet again.
Saturday, November 02, 2019
Fed’s Own Forecasts Again Dead Wrong as QE4 Accelerates / Interest-Rates / Quantitative Easing
By: MoneyMetals
Precious metals markets enter November’s trading with bulls eying a potential year-end rally.
Gold and silver prices did manage to post gains on Wednesday and Thursday after the Federal Reserve announced a quarter point rate cut. But the Fed followed up its move with language suggesting interest rate policy is now on pause.
News Anchor #1: The Federal Reserve cut the benchmark rate by a quarter of a percentage point. It's now at 1.5% to 1.75%. The rate cuts come on a global slowdown; they say. Also muted inflation. Now the Fed does signal in this statement a pause for future rate cuts. The Federal Reserve statement changes the words from “act as appropriate” to “assess.”
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Thursday, October 31, 2019
What Has Freaked Out The US Fed? / Interest-Rates / US Interest Rates
By: Chris_Vermeulen
The US Fed cut rates again by 25 basis points, the third time this year. Prior to the start of 2019, the US Fed gave guidance that 3 to 4 more rate increases were planned for 2019. What the heck happened to the US Fed and what has them so freaked out that they completely changed direction on their expectations for the US and Global economy so quickly? Source: Yahoo Finance
It is painfully obvious to anyone paying attention that the US Fed expected the many years of near-zero interest rates between 2009 and 2015 to act as a fuel for future growth. The problem was that no real growth materialized until just before the 2016 US Presidential elections – and even that was relatively muted. The US Dollar had continued to rally from July 2011 lows well into the 2016 election date. The expectations for the US economy hinged on who won the election. After President Trump won, the markets started an immediate rally expecting business-friendly policies and government.
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Wednesday, October 30, 2019
Why Nobody Chants “End the Fed” Anymore / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Americans hated it when the Federal Reserve handed trillions of dollars to crooked Wall Street banks following the 2008 Financial Crisis. Politicians were confronted about the merits of central banking and bailouts.
For the first time in history, college students were chanting “End the Fed” at campaign rallies as Ron Paul took the central bank to task during his presidential campaigns.
Virtually everyone in America vehemently opposed the central bank handing piles of cash to the same bankers whose greed and fraud had caused the Financial Crisis.
Monday, October 28, 2019
What if the Fed Stops Cutting Interest Rates? / Interest-Rates / US Interest Rates
By: Jordan_Roy_Byrne
Fed rate cuts have been the driving force of the recent gains in precious metals.
This is not a surprise to our readers as since 2018 we argued that a shift in Fed policy from rate hikes to rate cuts would springboard the next big move. History argued the same.
The market is showing a roughly 90% chance the Fed will cut rates this week which indicates the market has essentially already priced in the rate cut.
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Saturday, October 26, 2019
The Fed’s “Not QE” Is Morphing into “QE4ever” / Interest-Rates / Quantitative Easing
By: MoneyMetals
Another week, another new and expanded repo market intervention by the Federal Reserve. On Thursday, the Federal Reserve Bank of New York intervened twice with fresh liquidity injections. Fed officials raised their offerings for overnight repos up from $75 billion to a staggering $120 billion.
This comes on top of the $60 billion per month in Treasury bill purchases that will extend well into next year and possibly beyond. Over the past month alone, the Fed's balance sheet has soared by $200 billion.
You might think numbers like these should be quite alarming to investors and to anyone who holds U.S. dollars. But the strange thing about these Fed interventions is that hardly anyone seems alarmed. There’s no sense of rising risk being priced into the stock market. And the mainstream media is barely even mentioning these massive transfers of paper wealth.
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Tuesday, October 22, 2019
A Look at Peak Debt / Interest-Rates / Global Debt Crisis 2019
By: Harry_Dent
David Stockman, Dr. Lacy Hunt and I agreed on a lot of things last week at the seventh annual Irrational Economic Summit in D.C. In the September issue of Boom & Bust, I talked about corporate debt being the greatest threat globally this time around. The worst is in the emerging world that used cheap printed dollars from the developed countries, primarily the U.S., to fund a debt binge concentrated in the corporate sectors. But our corporate sector also added a lot to their debt and only 39% of their bonds are investment grade, with 39% BBB and 22% junk.
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Tuesday, October 22, 2019
How High Debt Affects Bond Interest Rates / Interest-Rates / International Bond Market
By: Harry_Dent
The only Phd economist I allow to speak each year at the Irrational Economic Summit is Dr. Lacy Hunt. (You can watch his presentation from this year’s conference here.) Lacy can take that complex science and still see the forest for the trees. He can still find reality from all of that great theory to real-life outcomes.It also helps that he advises a $4 billion bond fund at Housington Management and has to get the reality of bond interest rates right or face the consequences – which he has for this entire boom!
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Tuesday, October 22, 2019
The Coming Great Global Debt Reset / Interest-Rates / Global Debt Crisis 2019
By: Richard_Mills
In the first quarter of 2019, global debt hit $246.5 trillion.
Encouraged by lower interest rates, governments went on a borrowing binge as they ramped up spending, adding $3 trillion to world debt in Q1 alone. It reverses a trend that started in the beginning of 2018, of reducing debt burdens, when global debt reached its highest on record, $248 trillion.
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Monday, October 21, 2019
Learn to Spot Reliable Trading Setups: ANY Market, Any Market Time Frame / Interest-Rates / Learn to Trade
By: EWI
Hi Reader,
On October 23, you are invited for a rare, free opportunity to see for yourself how to use simple, everyday price charts to find reliable trade setups -- in any market and any time frame.
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Friday, October 18, 2019
US Treasury Bonds Pause Near Resistance Before The Next Rally / Interest-Rates / US Bonds
By: Chris_Vermeulen
Our research team believes the US Treasuries and the US Dollar will continue to strengthen over the next 2 to 6+ weeks as foreign market and emerging market credit and debt concerns outweigh any concerns originating from the US economy or political theater. Overall, the major global economies will likely continue to see strength related to their currencies and debt instruments simply because the foreign market and emerging markets are dramatically more fragile than the more mature major global economies.
We believe the US Treasuries may surprise investors by rallying from current levels, near price resistance, to levels above $151 on the TLT chart.
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Friday, October 18, 2019
Federal Reserve’s New QE Transfers Wealth to Its Owner Banks / Interest-Rates / Quantitative Easing
By: MoneyMetals
Metals investors are positioning themselves for rapidly developing political and geopolitical events, as well as a rapidly expanding Federal Reserve balance sheet.
What started out as a limited intervention to provide temporary liquidity to overnight lending markets has morphed into a massive $60-billion-per-month Treasury-buying campaign. By some measures, it’s even bigger than the last Quantitative Easing program.
The Fed has yet to fully explain why this is all necessary given the lack of an immediate crisis in the real economy. Last week, Fed chair Jerome Powell took great pains to insist that their expanded repo market operations are “not QE” – only to announce a massive new Treasury bill buying program on Friday.
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Wednesday, October 16, 2019
This Is Not a Money Printing Press / Interest-Rates / Quantitative Easing
By: Peter_Schiff
Rene Magritte's 1929 painting "The Treachery of Images," depicts a tobacco pipe with a caption that reads "Ceci n'est pas une pipe," (French for "This is not a pipe"). Everyone who has taken a course in modern art knows that Magritte's exercise in contradiction was meant to draw a distinction between a real thing and a representation of that thing. Perhaps we should send Federal Reserve Chairman Jerome Powell a beret and an easel as he is attempting a similarly surrealistic take on monetary policy.
Early last week, the Chairman announced a new, as yet unnamed, Fed program through which the bank will now buy regular amounts of short-term U.S. government debt. Seeking to counter the rumblings that a new form of quantitative easing would be seen as an admission that the economy may be in trouble, Chairman Powell asserted during the annual meeting of NABE on October 8, "This is not QE. In no sense is this QE". In other words, "Ceci n'est pas QE."
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Tuesday, October 15, 2019
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Jerome Powell has something in common with Bagdad Bob, Saddam Hussein’s infamous press secretary. They’re both liars, suggests Money Metals podcast guest Craig Hemke of the TF Metals Report.
Telling obvious lies with a straight face is part of Powell’s job description. He hopes to maintain order even though anyone who is paying attention knows something extraordinary is going on.
Tuesday, October 15, 2019
Will Interest Rate Cuts Be Enough? / Interest-Rates / US Interest Rates
By: Michael_Pento
The main stream financial media is absolutely ebullient about global central banks’ renewed enthusiasm to cut interest rates to a level that is even lower than they already are. And, most importantly, Wall Street is completely confident that theses marginally-lower borrowing costs will not only be enough to pull the global economy out of its malaise; but will also be sufficient to provide enough monetary thrust to blow asset bubbles into the thermosphere.
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Wednesday, October 09, 2019
Whatever Happened to Philippines Debt Slavery? / Interest-Rates / Phillippines
By: Dan_Steinbock
In early 2017, a Forbes contributor claimed President Duterte will bankrupt the Philippines economy in five years. Half of the period is gone. Will the country default in 2022?In May 2017, Forbes released a column, which claimed that “New Philippine Debt of $167 Billion Could Balloon To $452 Billion: China Will Benefit.” It was written by Anders Corr, who was portrayed as an independent geopolitical risk analyst. He predicted that the Philippines would be in debt slavery at the end of the Duterte era.
Now that half of that prediction period has passed, let’s see whether Corr was right.
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Wednesday, October 09, 2019
The Later United States Empire / Interest-Rates / US Debt
By: Richard_Mills
In 1917, the United States created the federal debt limit (or ceiling) to make it easier to finance World War One, essentially allowing Congress to borrow money to pay for the war effort by issuing bonds.
By 1939 with World War Two looming, Congress passed the first aggregate debt limit, but it meant little. For nearly 60 more years the debt ceiling caused nary a ripple, until 2011 when Congress delayed approval of the annual budget, nearly causing a government shutdown. Then a minority in the House of Representatives, Republicans balked at the $1.3 trillion deficit, the third largest in history, so Democrats suggested a $1.7 billion cut in defense spending, since the war in Iraq was winding down. The GOP wouldn’t agree to that, instead offering $61 billion in non-defense cuts including Obamacare. Finally the two sides agreed on $81 billion worth of cuts.
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Monday, October 07, 2019
Yield Curve Inversion Current State / Interest-Rates / Inverted Yield Curve
By: Nadeem_Walayat
An inverted yield curve is basically when the yield on 2 year US government bond exceeds the 10 year US bond yield as worried investors opt to disinvest from risky assets in favour of safer longer term government bonds thus driving down long bond yields below that of nearer term bonds. And the closer the yield curve gets towards towards an inversion the greater the likelihood for a future recession. So far the yield curve inversion has successfully forecast the last 3 economic downturns in the United States. Though the YCI has proved less reliable elsewhere, especially for Australia.
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Monday, September 30, 2019
Watching Paint Dry in the Repo Market Part 2 / Interest-Rates / US Interest Rates
By: Michael_Pento
The Fed has now begun to pave the way for a return to Quantitative Easing. The reason for this was the recent spike in borrowing rates in the Repo market. At his latest press, Chair Powell said this about the spike in the Effective Fed Funds and Repo rates:“Going forward, we’re going to be very closely monitoring market developments and assessing their implications for the appropriate level of reserves. And we’re going to be assessing the question of when it will be appropriate to resume the organic growth of our balance sheet… It is certainly possible that we’ll need to resume the organic growth of the balance sheet sooner than we thought.”
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Thursday, September 26, 2019
The Disaster of Negative Interest Rates / Interest-Rates / Negative Interest Rates
By: Ellen_Brown
The dollar strengthened against the euro in August, merely in anticipation of the European Central Bank slashing its key interest rate further into negative territory. Investors were fleeing into the dollar, prompting President Trump to tweet on Aug. 30:
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Tuesday, September 24, 2019
Watching Paint Dry in the Repo Market / Interest-Rates / US Interest Rates
By: Michael_Pento
The world of fixed income trading has been extremely volatile lately. Rates have not only spiked in the Treasury market but borrowing costs in money markets have also become extremely disconcerting. The residual effects from Quantitative Tightening, which ended just this past July, are wreaking havoc on the liquidity in bond markets. Ironically, the Fed’s erstwhile rate hikes and its QT program--what Fed Chairs described as running in the background and like watching paint dry—turned out to be the catalyst for a freeze in the junk-bond market in December of 2018 and is now causing major disruption in the Repo market.
This illustrates clearly the tenuous nature of the bond bubble and that it will someday implode like a supernova---sending yields skyrocketing on a long-term basis. However, it most likely does not yet mark the start of the epoch debt bubble debacle that is in store. We will need a surge of inflation expectations, or the credit markets to shut down on a protracted basis for that to occur. We are moving closer to that eventuality every day.
Wednesday, September 11, 2019
Now That Bonds Have Pulled Back As Expected, Maybe We Can Set Up Another Rally / Interest-Rates / US Bonds
By: Avi_Gilburt
I think this market has been providing many investors with whipsaw and head aches, which has also caused much head scratching. (And, yes, that little itch may be telling you something.)
Back in November of 2018, no one even considered the possibility of a bond rally because the Fed was raising rates. And, recently, no one even considered the possibility of any type of top in bonds because the Fed is now lowering rates. Has anyone considered that maybe the Fed does not control the bond market? (See my prior articles for thoughts on this).
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Thursday, September 05, 2019
Here’s How You Build a Bond Portfolio That Works / Interest-Rates / US Bonds
By: Jared_Dillian
When you invest in bonds, do you buy individual bonds or bond funds?
- Unless you have a lot of money, you should probably buy bond funds.
- And even if you do have a lot of money, you should probably buy bond funds.
Let me explain.
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Tuesday, September 03, 2019
The Central Banks’ Time Machine is Broken / Interest-Rates / Central Banks
By: Michael_Pento
Last week we wrote about how global central banks have created an economic time machine by forcing $17 trillion worth of bond yields below zero percent, which is now 30% of the entire developed world’s supply. Now it’s time to explain how the time machine they have built has broken down. In parts of the developed world, individuals are now being incentivized to consume their savings today rather than being rewarded for deferring consumption tomorrow. In effect, time has been flipped upside down. These same central bankers then broke that time machine by guaranteeing investors they will never cease printing money until inflation has been firmly and permanently inculcated into the economy.
They have printed $22 trillion worth of new credit in search of this goal since 2008. This figure is still growing by the day. But by doing so, they have destroyed Capitalism. Freedom is dying; not by some Red Army but by central banks.
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Tuesday, September 03, 2019
Looking For A US Bond Market Top / Interest-Rates / US Bonds
By: Avi_Gilburt
Those that have followed my bond analysis since November have made quite a bit of money. While the stock market is basically in the same place it was back in the early fall of 2018 when we went long bonds, TLT has rallied from our entry in the 112/113 region in TLT to a high of almost 149.
Let me take a moment to recap my recent history and perspective on bonds. For those that followed our work over the years, you would know that we called for a top to the bond market on June 27, 2016, with the market striking its highs within a week of our call. Right after that top call, TLT dropped 22%, until we saw the bottoming structure develop in late 2018.
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Sunday, August 25, 2019
If You Don’t Understand Bonds, You Don’t Understand Investing / Interest-Rates / US Bonds
By: Jared_Dillian
The first thing I read about investing wasn’t actually a book. It was a pamphlet that I got somewhere, 23 years ago.
The pamphlet said you should invest in bonds as well as stocks. It said bonds went up when interest rates went down, and vice versa. It didn’t go into any more detail.
Well, I did what the pamphlet said, even though I had no idea what the hell I was doing, and I wouldn’t figure out for a few more years why it was a good idea.
I suspect a lot of people don’t take that advice on diversification simply because they don’t know what the hell they are doing.
Friday, August 23, 2019
The Central Bank Time Machine / Interest-Rates / Central Banks
By: Michael_Pento
We are now witnessing the death throes of the free market. The massive and record-breaking global debt overhang, which is now $250 trillion (330% of GDP), demands a deflationary deleveraging depression to occur; as a wave of defaults eliminates much of that untenable debt overhang. The vestiges of the free market are trying to accomplish this task, which is both healthy and necessary in the long term—no matter how destructive it may seem during the process. Just like a forest fire is sometimes necessary to clear away the dead brush in order to promote viable new growth. However, the “firemen” of today (central banks) are no longer in the business of containing wildfires, but instead proactively flooding the forest with a deluge of water to the point of destroying all life.
In point of fact, the free market is no longer being allowed to function. Communism has destroyed capitalism, as the vital savings and investment dynamic has been obliterated. Central banks have decided that savers deserve no return on their so-called risk-free investments and have hence forced into existence humongous bubbles in junk bonds and equity markets worldwide. They have destroyed the savings and investment dynamic and turned time backward.
Friday, August 23, 2019
Seven Key Words That Explain "Stupidly High" Bond Market Prices / Interest-Rates / International Bond Market
By: Dan_Amerman
The front page of the August 16th Wall Street Journal contains the information found in the remarkable graph below.
As can be clearly seen, year to date around the world - including in Austria, Japan, Germany, and the U.S. and the U.K. - we are in practice seeing some of the most astonishing short-term returns ever seen when it comes to long and ultralong bonds.
The title of the WSJ article is "Forget Stocks. Ultralong Bonds Are The Real Gamble", and the author refers to the current bond price levels around the world as being "stupidly high". If we look at the dominant investment theories from prior decades, which the great majority of financial planners, financial journalists and retirement investors still treat as being the gospel wisdom for today - then he makes some very strong points about just how ridiculous those prices are, and why they shouldn't exist.
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Thursday, August 22, 2019
Economist Lays Out the Next Step to Wonderland for the Fed / Interest-Rates / US Interest Rates
By: Gary_Tanashian
Mr. Steven Ricchiuto, he of a Masters in Economics from Columbia, has laid out the proper plan for the Federal Reserve in this oh so noisy environment in which an unassuming and fairly quiet man is trying to tune out a personal bully on Twitter, tune out the stock market’s daily whipsaw and do what he perceives to be the right thing.
Today, the academic named above throws in with Trump and politely harangues Chairman Powell thusly in an open letter. You can read it by hitting the graphic…
https://www.marketwatch.com/story/the....
Stagflation this, Volcker that, deflation the other thing… blah blah blah. But then he gets to the interesting parts, the money parts. Of the post-Volcker era he states…
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Tuesday, August 20, 2019
The Tip of the Debt-Bomb Iceberg / Interest-Rates / US Debt
By: Harry_Dent
This week I wanted to bring your attention to a key development. And while overlooked by many, is part of the trigger that will set off the next financial crisis.All eyes were focused intently this week on US Treasury yields. And a lot of people might have missed what I believe will prove to be a very big event – after the dust from the next big implosion finally settles.
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Friday, August 16, 2019
When the US Bond Market Bubble Blows Up! / Interest-Rates / US Bonds
By: Gary_Tanashian
Amazing isn’t it? It was only back in H2 2018 when everybody but you (because you are as smart as I think you are or because you read NFTRH or nftrh.com) and me was unbelievably bearish about the TREASURY BOND BEAR MARKET!!!
Today… not so much. The herd is absolutely pile driving bonds right now.
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Thursday, August 15, 2019
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions / Interest-Rates / Negative Interest Rates
By: Dan_Amerman
The discussion of negative interest rates in the United States has now officially gone mainstream, with the front page of the August 12, 2019 print edition of the Wall Street Journal carrying a prominent discussion of the possibility.
Most of the article consists of various institutional investors talking about why this could be a real possibility. However, as will be explored herein, there were three glaring omissions in the article.
1) What the real source of the negative interest rates would be.
2) The historically unprecedented profits that would be created by such a move.
3) Who those unprecedented profits would mostly go to (and it isn't to the average investor).
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Wednesday, August 14, 2019
You Have to Buy Bonds Even When Interest Rates Are Low / Interest-Rates / US Bonds
By: Jared_Dillian
Interest rates are currently low.That is by far the biggest concern among bond investors. They are drowning in worry about low interest rates and their effect on bonds. So let’s address that.
Saying interest rates are currently low is another way of saying that bonds are expensive—which makes people not want to invest in bonds. Fair enough.
Stocks are also expensive—but you invest in those!
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Sunday, August 11, 2019
Gold and the Bond Yield Continuum / Interest-Rates / US Bonds
By: Gary_Tanashian
Have you heard the news? US Treasury bonds are sky rocketing as it turns out there is no inflation amid a global central bank NIRP-a-thon and race to the currency bottom. Going the other way, our 30yr Treasury yield Continuum is burrowing southward.
If you check out yesterday’s post you’ll see proof that the 2018 NFTRH view that people should tune out the bond experts instructing BOND BEAR MARKET!! was 100% on target.
But today the din is coming from the opposite pole. Everywhere you look on the financial websites it’s now about tanking yields, decelerating growth, trade war damage and deflation. Here is the 30 year bond yield (TYX), which is front and center in this hysteria (click the charts below for the clearest view). That is one impulsive looking drop.
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Saturday, August 10, 2019
US Corporate Debt Is at Risk of a Flash Crash / Interest-Rates / Corporate Bonds
By: John_Mauldin
The world is awash in debt.
While some countries are more indebted than others, very few are in good shape.
The entire world is roughly 225% leveraged to its economic output. Emerging markets are a bit less and advanced economies a little more.
But regardless, everyone’s “real” debt is likely much bigger, since the official totals miss a lot of unfunded liabilities and other obligations.
Debt is an asset owned by the lender. It has a price, which—like anything else—can go up or down. The main variable is the lender’s confidence in repayment, which is always uncertain.
Saturday, August 10, 2019
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly / Interest-Rates / US Bonds
By: QUANTO
The sceptre of recesion is growing worldwide. German industrial production registered its biggest annual decline in almost a decade when it reported numbers in June. We covered it here The result was country’s flattest yield curve since the financial crisis.
Wednesday, August 07, 2019
Are You Still Trying To “Fade” The Bond Market Rally? / Interest-Rates / US Bonds
By: Avi_Gilburt
For weeks, if not months, I have been reading one bearish bond article after another. In fact, many of these same writers have been arguing with me for months about the bond rally I expected back in November of 2018. One suggests that this rally is really a “fake,” whereas another has been strongly suggesting that investors fade this rally, with many more supporting their opinions. The problem is that these analysts have been trying to “fade” this rally for the last 10-15% up. Yet, I will gladly bank my “fake” 20% profits on this trade.
As each week goes by, I continue to chuckle about how many people do not understand the context of the markets upon which they opine. Remember how certain analysts and investors were that rates were only headed higher back in November of 2018?
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Friday, August 02, 2019
Post FED US Bond Market Yield Spread Falls Further: Risk Aversion is at the Door / Interest-Rates / US Bonds
By: QUANTO
All Powell needed to do was cut rates and to soften the blow on the short end of the curve, he needed to speak of the strong economy and that would have controlled the 1 month and 3 month and 2 year yields. Instead he ended up confusing about recovery and talking of nonsensicall comical terms like insurance cut etc. These are jargons that one should never use.
The reaction from the bond market was immediate as the 1 month and 3 month yield jumped sharply. Money was flowing out to the long end which is exactly what Powell didnt want to happen when he said "inflation gets baked in to bond yields". Even as he was saying, that is what was happening. We take a look at some of the charts which define and go beyond normal technical and trend lines for forex. We have always suggested: NEVER TRADE FOREX ON TECHNICAL INDICATORS. THEY ARE LAGGING. TO LOOK BACK AND TRADE FORWARD IS FOOLISHNESS.
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Thursday, August 01, 2019
US Yield Curve Inverted Months Earlier than Most Think / Interest-Rates / Inverted Yield Curve
By: John_Mauldin
The inverted yield curve is one of the more reliable recession indicators.
I discussed it at length last December. At that point, we had not yet seen a full inversion. Now we have, and it appears the curve was “inverted” back then, and we just didn’t know it.
The Powell Fed spent 2018 gradually raising rates and reducing the balance sheet assets it had accumulated in the QE years.
This amounted to an additional tightening. In fact, the balance sheet reduction may have had more impactthan lower rates.
Now if you assume, as Morgan Stanley does, every $200B balance sheet reduction is equivalent to another 0.25% rate increase, which I think is reasonable, then the curve effectively inverted months earlier than most now think.
Tuesday, July 30, 2019
US Fed Infinite QE Forever at Zero Bound / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
The widespread profound and recognized global recession, complete with numerous icon corporate failures, will lead the US Federal Reserve to return to unlimited Quantitative Easing with a Zero Percent chaser. The Jackass calls it a return to Infinite QE Forever at the Zero Bound. Not only is the double step of return to QE with a sequence of interest rate cuts urgently necessary, but the financial markets are demanding it. In fact, they are holding the USFed hostage, as the venerable august body is backed into a policy corner. This time seems different. For ten years, the USFed has relied upon coordinated policy with the Euro Central Bank, having used all the most extreme measures, yet has a systemic failure on its hands. Witness extreme monetary policy failure. The systemic failure is both financial and economic. The bond purchase program wrecked the bond market by driving away legitimate investors, while the ultra-low interest rates wrecked the economy by distorting asset allocation.
Tuesday, July 23, 2019
We Are in for Decades of Ultra-Loose Monetary Policy / Interest-Rates / Quantitative Easing
By: Jared_Dillian
President Trump recently nominated Judy Shelton to the Federal Reserve Board of Governors. She is the United States director for the European Bank for Reconstruction and Development, which I had never heard of until her nomination.
Shelton is a Republican and believes in the adoption of a gold standard. She currently believes in lowering interest rates, after spending the Obama years criticizing the Fed for lowering interest rates.
You may wonder how a person can be in favor of a gold standard and also for lowering interest rates at the same time.
I am wondering that, too.
Monday, July 22, 2019
What the World Doesn’t Need Now is Lower Interest Rates / Interest-Rates / Global Financial System
By: Michael_Pento
The Q2 earnings season is upon us and the risks to the rally that started after the worst December on record at the close of last year is in serious jeopardy. We received a glimpse of this with some of the current companies that have reported. For example, to understand how dangerous this earnings reporting season can be, take a look at what one of the largest US multinational firms had to say recently after it reported earnings. The Minnesota-based Fastenal, which is the largest fastener distributor in North America, reported worse-than-expected second-quarter earnings and revenue. Shares of Fastenal promptly tanked more than 4%. But what the management said about the quarter was very interesting. The company said in its press release that its strategy to raise prices to offset tariffs placed to date on products sourced from China were not sufficient to also counter general inflation in the marketplace. Read full article... Read full article...
Wednesday, July 17, 2019
Federal Debt Ceiling Reached as Federal Spending Rages / Interest-Rates / US Debt
By: MoneyMetals
The federal government will soon run up against its self-imposed borrowing cap once again.
Current estimates are for the government to max out its credit limit at a little over $22 trillion in early September. Congress goes on recess in August, so there is some pressure to address the cap right now.
Treasury Secretary Steve Mnuchin has been fulfilling what seems to be the most sacred responsibility of his position: borrowing money. It’s one that each of his predecessors has also undertaken, without fail and without regard to party affiliation, in recent decades.
Wednesday, July 17, 2019
Boost your Trading Results - FREE eBook / Interest-Rates / Learn to Trade
By: Submissions
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Friday, July 12, 2019
The Hidden Reason Why Fed and "Systemically Important" Banks Oppose a Gold Standard / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Chairman Powell’s testimony this week was closely scrutinized not just for its economic implications but also for its political overtones. Powell cited “trade tensions” as cause for concern about the strength of the global economy. He clearly seemed to be blaming President Trump’s tariffs.
But if the tariffs are what ultimately move the Fed to cut rates, Trump will have finally gotten what he wants out of Powell. In recent weeks, Trump has stepped up his attacks on the central bank, calling it the biggest problem facing the economy, floating the idea of firing Powell, and suggesting his administration would match China’s and Europe’s "currency manipulation game."
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Wednesday, July 10, 2019
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis / Interest-Rates / Student Finances
By: MoneyMetals
Presidential candidates Bernie Sanders and Elizabeth Warren are promising as much as $1.6 trillion in student debt forgiveness for millions of borrowers. Critics smell a cynical campaign ploy to try to buy the youth vote.
How is it either realistic or fair to declare an entire category of debt to be assumed by taxpayers?
Regardless, pie-in-the-sky proposals to cancel student debt shed light on a very down-to-earth problem for not only college students and recent graduates – but also for the economy and financial markets.
Student loans now rank as the second largest category of American consumer debt – bigger than credit cards, bigger than auto loans, and behind only mortgages.
Friday, July 05, 2019
The Fed May Give Trump His Interest Rate Cut, but It Won’t Help / Interest-Rates / US Interest Rates
By: Patrick_Watson
Investors are in a buying mood despite many economic warning signs. Why?For some, it’s because they expect the Federal Reserve to cut interest rates and otherwise “stimulate” the economy. They believe (correctly) it would drive stock and real estate prices higher.
At the risk of stating the obvious… higher asset prices mainly benefit those who own the assets. Which, in the stock market’s case, is not most Americans.
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Wednesday, June 26, 2019
Elliott Wave: Market Signaling Fed to Cut Interest Rates Soon / Interest-Rates / US Interest Rates
By: EWI
We have tracked the U.S. Federal Reserve's interest rates decisions for years. This week, the Fed once again decided to keep the funds rate unchanged. We expect the Fed to change course soon.
We have tracked the U.S. Federal Reserve's interest rates decisions for years.
In December, we wrote an article titled "Interest Rates Win Again as Fed Follows the Market," where we observed that although most pundits believe that central banks set interest rates, central banks actually follow the freely traded bond market in their rates decisions.
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Tuesday, June 25, 2019
Testing the Fed’s Narrative with the Fed’s Data: QT Edition / Interest-Rates / US Federal Reserve Bank
By: F_F_Wiley
“The fact that financial markets responded in very similar ways … lends credence to the view that these actions had the expected effects on markets and are thereby providing significant support to job creation and the economy.” —Ben Bernanke defends the idea that markets and the economy respond significantly to quantitative easing
“… it will be like watching paint dry, that this will just be something that runs quietly in the background.” —Janet Yellen refutes the idea that markets and the economy respond significantly to quantitative tightening
It doesn’t take much calculation to see that the Fed’s position on quantitative tightening (QT) is blatantly inconsistent with its position on quantitative easing (QE). You only need to notice that the excerpts above, taken together, violate the following pair of postulates:
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Tuesday, June 25, 2019
Why Bond Investors MUST Be Paying Attention to Puerto Rico / Interest-Rates / International Bond Market
By: Rodney_Johnson
They lie, cheat, and steal? No way!In 2014, Puerto Rico issued $3.5 billion in bonds backed by the full faith and credit of the Commonwealth. Now the island’s fiscal managers, a group known as the PROMESA board, an entity that Congress created, claims those bonds are worthless.
While investors put down their hard-earned cash to buy the bonds, the board members have claimed in court that, because the debt issuance put the island over its legal debt limit, the debt should be canceled.
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Thursday, June 20, 2019
Interest Rates Square Minus Zero / Interest-Rates / Central Banks
By: Raul_I_Meijer
I intentionally start writing this mere minutes away from Fed chair Jay Powell’s latest comments. Intentionally, because the importance ascribed to those comments only means we have gotten so far removed from what capitalism and free markets are supposed to be about, that it’s pathetic. The comments mean something for rich socialists, but nothing for the man in the street. Or, rather, they mean that the man in the street will get screwed worse for longer.
And it’s not just the Fed, all central banks have it and do it. They play around with rates and definitions and semantics until the cows can never come home again. And they have such levels of control over their respective societies and economies that the mere use of the word “markets” should result in loud and unending ridicule. There are no markets, because there is no price discovery, the Fed and ECB and BOJ got it all covered. Any downside risks, that is.
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Wednesday, June 19, 2019
Most Income Investors Are Picking Up Nickels in Front of a Steamroller / Interest-Rates / Corporate Bonds
By: Jared_Dillian
Income investing is hard.
Let’s say you buy 20 bonds. Each of them yields 5%. Nineteen out of 20 mature at par and you get your money back, with interest.
One of them defaults. You are back where you started!
It is said that income investing is a negative art. Your goal isn’t to pick the winners—it’s to avoid the losers. You want to pick winners, invest in stocks. Have you seen a chart of Beyond Meat? Bonds generally don’t do that.
It is also said that income investing is like picking up nickels in front of a steamroller. You’re earning a 4–5% coupon, and you could get whacked pretty much any day, just like what happened at Toys “R” Us. It is a bit like selling puts.
Monday, June 17, 2019
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion / Interest-Rates / Inverted Yield Curve
By: Robert_Ross
The markets are in the middle of a once-in-a-decade event.
And it says a lot about what you should do with your money right now.
I’m talking about a critical recession indicator called the yield curve inversion—or the Diamond Cross.
As you may recall, a Diamond Cross happens when the difference between the yield on the 10-year Treasury note and the 3-month Treasury bill is negative. This is a telltale sign that the economy is slowing.
The Diamond Cross popped up briefly in March, only to return on May 15. Last week, it was the steepest, or most severe it’s been since April 2007.
Tuesday, June 11, 2019
Fed Running Out of Time and Conventional Weapons / Interest-Rates / US Interest Rates
By: Michael_Pento
The buy and hold mantra from Wall Street Carnival Barkers should have died decades ago. After all, just buying stocks has gotten you absolutely crushed in China for more than a decade. And in Japan, you have been buried under an avalanche of losses for the last three decades. And even in the good old USA, you wouldn’t want to just own stocks if the economy was about to enter another deflationary recession/depression like 2008. Likewise, you wouldn’t want to own any bonds at all in a high-inflation environment as we had during the ’70s.
The truth is that the mainstream financial media is, for the most part, clueless and our Fed is blatantly feckless.
The Fed has gone from claiming in late 2018 that it would hike rates another four times, to now saying that it is open to actually start cutting rates very soon.
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Sunday, June 09, 2019
The Fed Stops Pretending / Interest-Rates / US Interest Rates
By: Peter_Schiff
Well, it didn't take much and it didn't take long. After years of delays, a tentative start, many cautious pauses along the way, and a top speed that never really hit cruising velocity, the Fed has taken the first available off-ramp on the road towards policy "normalization." In a speech on Tuesday this week in Chicago, Fed Chairman Jerome Powell delighted Wall Street by signaling that the Fed may soon deliver the gift that investors had been hoping for...the first interest rate cut in almost a decade.
While many savvy economists should have seen this coming, as late as October of last year, almost no one in the financial world thought that the Fed would so easily abandon its long-held bias without a gale force recession blowing them off course. But, in reality, all it took was a light breeze to force a 180-degree turnaround.
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Wednesday, June 05, 2019
Bond Market Shows Us The Power Of The Dark Side / Interest-Rates / US Bonds
By: Avi_Gilburt
First, I want to begin this article by thanking all those who read my articles for the amazing outpouring of support and prayers for my wife who is recovering from a freak accident. So, with her sleeping right now, I thought I would pen another article to at least keep myself somewhat busy.
Over the years, I have published many price trend change expectations which have hit quite well. Some examples include the top to gold in 2011 at 1915 (with gold topping at 1921), the bottom in the dollar in 2011 (with an expectation of a multi-year rally to within pennies of our target struck six years later), many major turning points in the S&P500, and many other calls throughout the last 8 years I have been publishing my market calls.
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Wednesday, June 05, 2019
Warning… Sub-Prime 2.0 Is About to Blow Up / Interest-Rates / Financial Crisis 2019
By: Graham_Summers
For those how pay attention, the Fed has already broadcast what the next crisis will be…
Corporate bonds…
When the Fed cut interest rates to zero in 2008… and held them there for even years straight… it gave the “green light” to corporations to go on massive borrowing spree.
After all… if you’re the CEO of a company… and taking on debt suddenly costs NOTHING… why wouldn’t you start borrowing?
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Tuesday, June 04, 2019
US Yield Curve Inverted Again. Will Gold Shine Now? / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
The U.S. yield curve has inverted again, and it has done so to the widest level since 2007. How much of a reason to worry is that actually? A sky-is-falling moment lurking ahead? If so, what chance of saving us does gold have?
Another Yield Curve Inversion Occurs
It’s really getting more serious. Another yield curve inversion… And a much deeper one – that’s frightening!
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Sunday, June 02, 2019
Gold Standard, Federal Reserve, Economic Law / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
In a recent opinion by Sebastian Mallaby, published in the Washington Post, the author and columnist says the following:
“Money is an abstraction, a political confection, a set of castles built on air. No wonder it makes people feel queasy. Gold is tangible, immutable, somehow reliable and real; there will always be people who believe in it. But the truth is that modern central banking is one of those elite inventions that generally works. The gold standard has given way to the PhD standard, and we are all the better for it.”
In his article, Mr Mallaby presents his arguments as to the reason and logic that a gold standard will not work and that it is an idea which is out of date and inferior to the current system, i.e., “modern central banking”.
The opinions are a response to statements made by Judy Shelton, currently under consideration for appointment as one of the seven governors on the Federal Reserve Board.
Mr. Mallaby refers to former President Reagan’s “nostalgia” abut the gold standard as being “curious” and says that “survival of this sentiment in 2019 is even more baffling”.
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Saturday, June 01, 2019
Finding Record Investor Profits Hidden In The Fed Minutes / Interest-Rates / US Federal Reserve Bank
By: Dan_Amerman
Sifting through the minutes of the Federal Open Market Committee (FOMC) to look for signals of changes in policy is a fixation for the financial media and the investment industry. Because both the stock and bond markets can reverse directions based upon the Fed's intentions for the direction of Fed Funds rates, there is an intense focus on finding signals for those intentions and whether the signals are changing.
However, like generals preparing for the last war - there is a strong case to be made that most analysis of the FOMC minutes is focusing on the details, while missing the big picture for the next recession (which could be growing more imminent).
As explored herein, the Fed itself is as much focused on how to change the "SOMA" to enable the strongest form of "MEP" in the event of another recession, as it is on Fed Funds rates.
When we get past the jargon, what the Fed is debating in plain sight are the specifics for how to give as much money as possible to some investors in the event of another recession, in the shortest time possible.
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Saturday, June 01, 2019
US Bond Market You Have to Invite the Vampire Into Your House / Interest-Rates / US Bonds
By: Gary_Tanashian
A vampire needs to be invited in order to enter your house. So the story goes. But in this case, we are talking about the Macro house, with its nexus in the USA and its Central Bank.
You see, the Federal Reserve inflates money supplies as a matter of doing business, which is why I noted so strenuously in Q4 2018 that Jerome Powell’s then-hawkish stance in the face of a declining stock market made perfect sense… because the 30 year Treasury bond was not bullish; it was bearish and getting more so under the pressure of rising inflation expectations.
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Thursday, May 30, 2019
This Is Why US Monetary Policy Is So Ineffective / Interest-Rates / Economic Theory
By: John_Mauldin
Back in the 1980s and 1990s, many people thought excessive government spending and the resulting debt would bring inflation or even hyperinflation.
We wanted a hawkish Federal Reserve or, better yet, a gold standard to prevent it. Reality turned out differently.
Federal debt rose steadily, inflation didn’t. Here’s a chart of the on-budget public debt since 1970:
Friday, May 24, 2019
The Fed Is Caught Behind The Curve / Interest-Rates / US Interest Rates
By: Avi_Gilburt
I have written many times about how the Fed follows the market and does not lead it. And, we are about to see yet another example of history’s lessons.
For those that followed our work over the years, you would know that we called for a top to the bond market on June 27, 2016, with the market striking its multi-year highs within a week of our call. Since that call, TLT dropped 22%, until we saw the bottoming structure develop in late 2018.
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Wednesday, May 22, 2019
Fed Encourages Runaway US Debt as “Minsky Moment” Approaches / Interest-Rates / US Debt
By: MoneyMetals
Federal Reserve officials like to pretend they can use interest rates like a motorcycle throttle on the U.S. economy. They can either rev things up by dropping interest rates or slow things down by moving rates higher.
The public has been led to believe the central planners can do whatever is needed with rates to keep things purring along.
The truth is the central planners at the Fed are meddling with forces beyond their control. They are encouraging consumers, companies, and government to take on debt. Soon, the nation will choke on it.
Wednesday, May 15, 2019
This Unprecedented Credit Crisis Will Redefine How We Invest / Interest-Rates / Financial Crisis 2019
By: John_Mauldin
In the past few years, I wrote a lot about the unprecedented credit crisis I foresee. I call it “The Great Reset.”
I have to add, it isn’t what I think the future should look like or what I want to see. But almost the entire developed world has painted itself into a corner.
It might not be terrible. I don’t expect another Great Depression or economic upheaval, but the change will be profound.
We will have to adapt our portfolios and lifestyles to this new reality. The good news is big changes happen slowly. We have time to adapt.
I don’t see any plausible path to stopping the world’s debt overload without a serious crisis, much less paying it off. So I foresee a tough decade ahead.
Tuesday, May 14, 2019
How US Debt Will Reach $40 Trillion by 2025 / Interest-Rates / US Debt
By: Harry_Dent
Smart people are worried about out deficit. They should be.Never mind the chaos around the world (like mass shootings, terrorist bombings, Armageddon marches, etc. ad infinitum), it was recently report that Christine Lagarde, the managing director of the IMF, is “doubly concerned” about the level of global debt. She was speaking at the Milken Institute Global Conference last week, where she explained why excessive debt is going to become a serious problem for developed and developing countries alike.
In case you’re wondering – I had to look it up – the Milken Institute is a research driven, non-partisan think tank that develops policy initiatives aimed at increasing economic growth to improve the standard of living for people across the globe.
I assure you. The levels of global and U.S. debt are way beyond concerning. They’re also way beyond being repayable.
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Wednesday, May 08, 2019
How Fed Interest Rate Cycles Exponentially Reduce Long Term Wealth Creation / Interest-Rates / Economic Theory
By: Dan_Amerman
The most historically reliable way to create long term wealth is the reinvestment of cash flows over time, as earnings are earned on earnings, which are earned on earnings.
Compound interest is the best known example, but the same principle of compounding cash flows is also the most powerful and stable source of wealth with the stocks and real estate over the long term as well.
Reinvested (and increasing) dividends are a more important and stable source of stock market wealth than price gains. Reinvested (and increasing) net cash flows are the most stable and important source of wealth with real estate and REIT investments as well.
However, what was taken for granted for many decades - is no longer available. As a result of Federal Reserve policies, only a small fraction of the historically average power of this wealth building engine still remains. In this analysis we will examine the mathematical implications of publicly stated Fed intentions if there is another recession, and look at the extraordinary implications for investors.
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Tuesday, May 07, 2019
US Federal Reserve Bank Vetoes Cain and Moore / Interest-Rates / US Federal Reserve Bank
By: BATR
If you ever had doubts just who is squarely in charge of the finances for the debt created U.S. Dollar currency, the nixing of Herman Cain and Stephen Moore for the Federal Reserve Board confirms that the Banksters are the real power. The Shadow Government is truly the elitists behind monetary hegemony that rules over government and economic policies. The institutions that shape and direct the financial dynasty of the reserve currency is outside the realm of Presidential compliance. Donald Trump has just experienced the push back from the Jackals of Jekyll Island.
Clearly the Federal Reserve 100 Years of Failure has been the single most destructive financial factor in history. Over the last century the Merchantry economy has been systematically dismantled in favor of the Corporatocracy. The Wall Street establishment has always opposed entrepreneurs unless they go public with shares that the Masters of the Universe can manipulate. Both Cain and Moore have a long record of media appearances that often vary from the establishment viewpoint.
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Friday, May 03, 2019
The May FOMC Meeting Is Over. They Say Every Cloud Has a Silver Lining... / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
The May FOMC statement didn’t bring much of a surprise. Fed Chair Powell remained upbeat in his assessment of the U.S. economy while dismissing low inflation as transitory. Gold has initially jumped, only to keep declining later. What has actually happened yesterday, then?
FOMC Statement Acknowledges Lower Inflation
Yesterday, the FOMC published the monetary policy statement from its latest meeting that took place on April 30-May 1. In line with expectations, the US central bank unanimously kept its policy rate unchanged. As previously, the inaction reflected the new patient approach adopted by the Fed in January. So, the federal funds rate remained at the target range of 2.25 to 2.50 percent:
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Thursday, May 02, 2019
The Fed Can’t Ease Interest Rates Until Stocks Collapse… / Interest-Rates / US Interest Rates
By: Graham_Summers
Yesterday’s Fed meeting had one clear message:
The Fed needs a reason to cut rates.
The Fed has obviously laid the ground work for a rate cut by hinting at easing… but with the “official” GDP numbers at 3.2% and inflation under 2%… the Fed doesn’t have a clear reason to ease just yet.
It will soon… and that reason is going to be a stock market collapse.
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Tuesday, April 30, 2019
A Look Inside the Scheme to Eliminate Cash and Impose Negative Interest / Interest-Rates / War on Cash
By: MoneyMetals
Central bankers and politicians love inflation, but they need “bag holders” to have faith in the value of the fiat currency IOUs they hold. The trick is to avoid suddenly destroying the ephemeral confidence in currencies by printing too much too fast.
Central bankers may also need to limit the options inflation wary citizens have for escaping.
They are both shifty and innovative when it comes to making sure the ill effects of perpetually devaluing currency are primarily borne by the citizenry.
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Monday, April 22, 2019
Global Bond Market Bubble’s Ultimate Culmination / Interest-Rates / International Bond Market
By: Michael_Pento
Historically speaking, a normal Fed tightening cycles consist of raising the Fed Funds Rate (FFR) by 350-425bps. It is at that point that the yield curve usually inverts--thus, disincentivizing future lending and closing down the credit conduit. At that point the Fed backs off from future rate hikes. Then, about a year later, a stock market meltdown begins; and six months after that a recession ensues. During this current cycle, the Fed Open Market Committee (FOMC) has raised rates by just 250bps before turning dovish. Therefore, Wall Street takes solace in the view that this time around the Fed stopped in time before it killed the business cycle.
However, that 250bps of hiking is before you factor in the end of Quantitative Easing (QE) and the current Quantitative Tightening Program (QT), which is still an ongoing process and won't end until September. When you factor in the tightening that occurred when the Fed ended QE in October of 2014, which amounted to $85b per month of newly printed money at its peak and added a total of $3.7 trillion to the Fed’s balance sheet, the actual amount of tightening from ending QE is probably close to 300bps. And, the QT from the Fed will end up draining nearly $1 trillion from its balance sheet and reached $40-$50 billion per month at its peak. A reduction in the Fed’s balance sheet of anything close to $1 trillion is completely unprecedented and amounted to a tremendous drain on liquidity. Nobody knows exactly the amount of rate hikes this equates to, but it most likely added another 75bps of monetary tightening.
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Thursday, April 18, 2019
Low New Zealand Inflation Rate Increases Chance of a Rate Cut / Interest-Rates / Global Financial System
By: ElliottWaveForecast
New Zealand CPI (Consumer Price Index) only grew by 0.1% in the three months to March with annual increase of 1.5%. This is well below the 0.3% rate expected by the market. The RBNZ (Reserve Bank of New Zealand) annual inflation target is between 1%-3%. The latest result falls at the lower end of the range. This has raised speculation that the RBNZ may cut official interest rate as early as next month.
Friday, April 12, 2019
Trump Calls for New Quantitative Easing to Prop Up U.S. Economy / Interest-Rates / Quantitative Easing
By: MoneyMetals
As gold and silver markets continue in choppy trading this spring, bulls are hoping a dovish Fed will sink the dollar and lift the metals.
Now that the Federal Reserve is on “pause” – presumably for the rest of 2019 – perhaps investors can stop obsessing over interest rate decisions by central planners. Perhaps markets can finally trade based on actual market signals and underlying fundamentals.
Perhaps ... not.
With 2020 election campaigns already underway, interest rate policy will be a political football in the months ahead. Incumbent administrations almost always favor lower interest rates heading into their re-election bids, and this one is no exception.
Wednesday, April 10, 2019
Is The Federal Reserve ‘Too Big To Fail’? / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
The term “too big to fail” refers to certain businesses whose viability is considered critical to the survival and effective operation of our economic system. These very large businesses are designated as too big to fail because their failure or bankruptcy would have disastrous consequences on the overall economy.
The potential effects are considered to be severe enough, and the costs so unbelievably large, that these businesses are afforded special attention and consideration in the form of bailouts and protection from creditors.
The expenses necessary in order to save a large institution from bankruptcy are considered less than the costs that would be incurred if the institution were allowed to fail. Active application and implementation of both alternatives were prominently featured in the financial crisis of 2008.
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Wednesday, April 03, 2019
Trump Readies Shake-up of Fed Banking Cartel / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
Establishment journalists, establishment economists, and establishment politicians are freaking out. It seems they can’t cope with the prospect of an outspoken monetary reformer potentially becoming the next member of the Federal Reserve Board of Governors.
President Donald Trump announced recently he would nominate longtime free-market advocate and close political ally Stephen Moore to a currently vacant seat at the Fed.
“Trump’s choice of former campaign adviser Stephen Moore to serve on the Federal Reserve Board is stirring misgivings among some bankers,” reports Politico.
“Economists are furious,” according to QZ. “The news has been met with a heady combination of derision, bafflement, and general hullaballoo, with Moore variously described as ‘a loyalist, not an expert’.”
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Tuesday, April 02, 2019
Why Is the Fed Paying So Much Interest to Banks? / Interest-Rates / US Federal Reserve Bank
By: Ellen_Brown
“If you invest your tuppence wisely in the bank, safe and sound, Soon that tuppence safely invested in the bank will compound, And you’ll achieve that sense of conquest as your affluence expands In the hands of the directors who invest as propriety demands.” — “Mary Poppins,” 1964
When “Mary Poppins” was made into a movie in 1964, Mr. Banks’ advice to his son was sound. The banks were then paying more than 5% interest on deposits, enough to double young Michael’s investment every 14 years.
Now, however, the average savings account pays only 0.10% annually—that’s one-tenth of 1%—and many of the country’s biggest banks pay less than that. If you were to put $5,000 in a regular Bank of America savings account (paying 0.01%) today, in a year you would have collected only 50 cents in interest.
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Tuesday, April 02, 2019
Inverted Yield Curve Fears Are Early / Interest-Rates / Inverted Yield Curve
By: John_Mauldin
Last week, the yield curve inverted for the first time since 2007. The yield for 10-year Treasuries fell below the yield for the 3-month T-Bill.
The inversion set off alarm bells and US stocks fell sharply. While concerns are reasoned, the alarm bells may be premature.
Inversion is an historically reliable but early recession indicator. The yield curve isn’t saying recession is imminent, although it’s likely.
Sunday, March 31, 2019
Warning: Central Banks CANNOT Normalize Policy… Ever / Interest-Rates / Negative Interest Rates
By: Graham_Summers
As I have been warning for years, Central Banks CANNOT normalize the Everything Bubble they created between 2008 and 2016.
Yesterday, yet another major Central Bank confirmed that I was correct. In this particular case, it was the European Central Bank (ECB).
The ECB first cut interest rates to NEGATIVE in 2014. It then lowered them an additional three times to -0.4% in 2016.
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Wednesday, March 27, 2019
Yield Curve Has Inverted. Will Gold Rally Now? / Interest-Rates / Inverted Yield Curve
By: Arkadiusz_Sieron
The yield curve followed suit of the Fed and also inverted. Inverted yield curve is a sign of an incoming recession, they say. However, what is the background of this yield inversion and how will gold react to its emerging story?
Red alert! Or, actually, a yield alert! After months of worries, the yield curve has finally inverted. Well, maybe not the whole yield curve, but one of its segment. As one can see in the chart below, the spread between US 10-year Treasury and 3-Month Treasury dived on Friday to its lowest since 2007.
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Wednesday, March 27, 2019
Has The Fed Finally Lost Control Of US Interest Rates? / Interest-Rates / US Interest Rates
By: Avi_Gilburt
Back in the 1940’s, Ralph Nelson Elliott once noted:
At best, news is the tardy recognition of forces that have already been at work for some time and is startling only to those unaware of the trend.
So, rather than be startled by the news of the past week, I have been trying to warn anyone who was willing to listen that if you want to know what the Fed is going to do, simply read the bond charts. You see, the Fed does not lead the market. Rather, the Fed follows the market. And, the market told me back in late 2018 that the Fed is about to fall behind the market.
Yet, almost every single person who reads this article will think I am crazy for saying something so ridiculous. Right? But, that is why I was prepared for the action seen in the bond market this past week, and not shocked as most participants seemed to be. In fact, one of my subscribers laughingly posted an article in our chatroom entitled "Riding the Bond Rally No One Saw Coming," while noting how our members were certainly quite prepared for this rally in the bond market.
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Tuesday, March 26, 2019
US Treasury Bond Yield Inversion and Political Fed Cycles / Interest-Rates / Inverted Yield Curve
By: Chris_Vermeulen
With so much news hitting the wires regarding the Treasury Inversion level and the “potential pending recession”, we wanted to shed a little insight into this phenomenon and what we believe the most likely outcome to be going forward. Our researchers, at Technical Traders Ltd., believe the Treasure inversion is a reactionary process to overly tight US Fed monetary policies, consumer demand factors and outside cycle forces. There is very little correlation to inverted Treasury levels and causation factors other than the US Fed and global central banks. We believe consumers and consumer sentiment also play a role in setting up the conditions that prompt yield inversion. The one aspect we believe everyone fails to consider is the uncertainty that is associated with major US election cycles.
The US Fed is obviously a driving force with regards to yields and consumer expectations. In the past, the US Fed has rotated FFR levels up and down by enormous amounts (in some cases 200 to 500%+ over very short spans of time. Consumers, you know those people, the ones that are the actual driving force of the local and state level economies, have been the the ones having to deal with wildly rotating FFR levels and the consequences of their debt rotating from 4~7% average interest rates to 8~25%+ average interest rates over the span of just a few years.
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Monday, March 25, 2019
Real US National Debt Might Be $230 Trillion / Interest-Rates / US Debt
By: John_Mauldin
Trump has promised to free the US of debt. He pledged to pay all federal debt off in eight years.
But so far, it’s been just talk. Two years into Trump’s presidency, the US national debt has grown by $2 trillion.
The official, on-the-books federal debt is now at $22.1 trillion. $22.1 trillion is the face amount of all outstanding Treasury paper, including so-called “internal” debt.
It comes to about 105% of GDP, and that’s only the federal government.
Sunday, March 24, 2019
The Fed Follows Trump's Tweets, And Does The Right Thing / Interest-Rates / US Interest Rates
By: Steve_H_Hanke
Earlier this week, the Fed left its target Fed funds rate unchanged at 2.25-2.50%. In addition, the Fed indicated that it had turned dovish. Rather than two Fed funds rate hikes in 2019, the Fed has now signaled that there will be none. And that’s not all. Starting in May, the Fed will reduce its balance sheet unwind of its Treasury holdings to $15 billion per month from $30 billion, and that it will end the unwind in September.
All this dovishness must have warmed the cockles of President Trump’s heart. For some time, Trump has been targeting the Fed with Twitter storms that have complained that the Fed has been too hawkish.
Well, the Fed apparently saw what the President saw. Or, maybe not. After all, one line of argument used to support the Fed’s new dovish stance is that the stance is necessary given the uncertainties that abound—both at home and abroad (read: regime uncertainties being created by President Trump himself).
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Friday, March 22, 2019
Elliott Wave: Fed Follows Market Yet Again / Interest-Rates / US Interest Rates
By: EWI
By Steve Hochberg and Pete Kendall
Back in December, we wrote an article titled "Interest Rates Win Again as Fed Follows Market."
In the piece, we noted that while most experts believe that central banks set interest rates, it's actually the other way around—the market leads, and the Fed follows.
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Friday, March 22, 2019
Next Recession: Finding A 48% Yield Amid The Ruins / Interest-Rates / US Bonds
By: Dan_Amerman
In a previous analysis we examined how to create a 21% yield, as the incidental byproduct of the Fed's plans for the cyclical containment of recession.
In this analysis, we will deepen that examination and visually illustrate the financial mathematics that would create a potential 48% yield from what the Federal Reserve plans to do in the event of another recession.
This analysis is part of a series of related analyses, an overview of the rest of the series is linked here.
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Tuesday, March 19, 2019
US Overdosing on Debt / Interest-Rates / US Debt
By: Harry_Dent
On Friday, I talked about how the last 11 years have been no better than cumulative GDP during the Great Depression (1929-1940). I’ll talk more about that on Thursday. Today I want to point out the biggest difference between this Economic Winter Season and the one 80 years ago…That is: Central banks!
Thanks to their interference, our massive debt bubble didn’t deleverage as it should have!
Total debt peaked at $58.4 trillion, or four times GDP, in the first quarter of 2009 and just barely deleveraged in the financial and consumer sectors during the Great Recession.
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Sunday, March 17, 2019
This Is How You Create the Biggest Credit Bubble in History / Interest-Rates / Global Debt Crisis 2019
By: John_Mauldin
Last week, the ECB announced it would keep record-low interest rates for longer. The news comes shortly after the Fed gave in to the market and held off on further rate hikes.
While investors celebrate the policy reversal, they might soon regret it.
This stimulus may indeed buy the market an additional year or two. But postponing the inevitable downturn with artificially low rates will come at a cost.
The cost is a massive credit bubble that is already of biblical proportions. Its implications chill me to the bone.
Wednesday, March 13, 2019
US Federal Borrowing Crosses the Rubicon / Interest-Rates / US Debt
By: MoneyMetals
A year ago, Republicans in control of Congress suspended the cap on federal borrowing. The limit was automatically re-imposed on March 1st. Politicians now have a few months to hammer out legislation to raise the cap as the Treasury employs “extraordinary measures” to fend off default.
The federal deficit is mushrooming once again. The 2017 tax cuts have taken a bite out of receipts at the IRS and economic growth has not met expectations.
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Monday, March 11, 2019
The Fed Is Playing a Dangerous Game / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
Two months ago, Fed Chair Jerome Powell set off a market panic.
He suggested the FOMC would do what it thinks is right and let asset prices go where they may.
They promised at least two if not three more rate hikes in 2019. The stock market fell out of bed.
Fast forward to now. The Fed has given up its tightening dreams and might even loosen policy. It is even (gasp!) losing its fear of inflation.
The problem is that preventing small “crises” on a regular basis eventually causes a very large crisis.
Saturday, March 09, 2019
Unsecured Debt hits £15,400 per UK Household / Interest-Rates / UK Debt
By: Submissions
It has been revealed in statistics provided by the trade union body, the TUC, that unsecured debt in the UK has now reached a new high of £15,400 per British household. To compile its figures, the TUC compared the total amount of money lent in overdrafts, personal loans, payday loans, store cards, and credit card debts.
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Thursday, March 07, 2019
How Private Sector Debt Bubble Could Trigger the Next Financial Crisis / Interest-Rates / Financial Crisis 2019
By: MoneyMetals
The $22 trillion official national debt is a much discussed problem, even as politicians exhibit zero motivation to do anything about it. But as big an economic overhang as it is, government debt isn’t likely to trigger the next financial crisis.
Yes, servicing the growing federal debt bubble will depress GDP growth, cause the value of the dollar to drop, and raise inflation risks. But the bubble itself won’t necessarily burst – not anytime soon.
As long as politicians face no political consequences for deficit spending, and as long as the Federal Reserve keeps the Treasury bond market propped up… then many more trillions can be added to the national debt.
Thursday, March 07, 2019
What Comes After a Trillion in Student Debt? / Interest-Rates / Student Finances
By: Jared_Dillian
Headline in Bloomberg the other day:“Millennials Are Facing $1 Trillion in Debt.”
A trillion always sounds like a lot. It is a lot. But while the absolute number is large, that is not the issue.
The issue is what makes up this millennial debt. It’s mostly student loans, and a staggeringly high amount of these loans are in delinquency.
And this is at the top of an economic expansion!
On a societal level, imagine what happens if the economy takes a wrong turn and these student loans—which are already 10% delinquent—go to 40% delinquent?
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Saturday, March 02, 2019
Perception of Powell Put in Place – QE4 Looms / Interest-Rates / Quantitative Easing
By: EWI
By Murray Gunn
For better or worse, the markets perceive that Fed chairman Powell has showed his hand.
The recent Federal Open Markets Committee (FOMC) minutes of the January meeting revealed almost unanimous agreement to announce a plan soon for ending the Fed's policy of balance sheet reduction. This is the first step in an inevitable march towards the fourth round of quantitative easing (QE4).
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Friday, March 01, 2019
US Consumer Debt Is Actually in Better Shape Than Ever / Interest-Rates / US Debt
By: Jared_Dillian
I saw a headline last week:
“More Americans Are Behind On Their Car Loans Than Ever Before”
Sounds ominous. It’s even worse when you dig into it.
Seven million car loans were more than 90 days past due in the fourth quarter of last year. That’s more than during the Great Recession, when unemployment was twice as high.
A lot of the perma-bears seized on this, saying how the economy sucks because everyone is defaulting on their car loans.
Thursday, February 28, 2019
Next Recession: Turning Zero Percent Interest Rates Into A 21% Yield / Interest-Rates / US Interest Rates
By: Dan_Amerman
If there is a new recession in the next few years, then it is highly likely that the Federal Reserve will take extreme measures in response, with the primary response being to swiftly knock short term interest rates back down to zero percent.
For many investors - the combination of recession, heavy-handed Fed interventions, and the return of zero percent interest rate policies (ZIRP) is likely to produce devastating results for their portfolios, and possibly their standard of living in retirement.
At the same time - some quite attractive profit opportunities will also exist, once we learn how to see them. This analysis explores one reasonably simple and practical alternative for turning zero percent interest rates into a 21% annual return.
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Monday, February 25, 2019
Fed Repo Man’s Valentine’s Day Present / Interest-Rates / US Interest Rates
By: Michael_Pento
The New York Federal Reserve recently sent out an early Valentine’s Day present to a certain group of individuals. However, this gift wasn’t to overleveraged American consumers; but rather to those who are employed repossessing one of those goodies they can’t afford. On February 12th the NY Fed made the announcement that a record number of consumers are falling behind on their car payments. There are now over 7 million car loans past due by at least 90 days as of Q4 2018, along with a record 89 million loans that are outstanding. For Subprime Auto borrowers with credit scores below 620, the delinquency rate spiked to over 16% and the number of subprime borrowers jumped to 20% of loans outstanding. The amount of overdue loans has spiked by 1.3 million since its previous high set in 2011, when the unemployment rate was at 9%.
Friday, February 22, 2019
US Auto Loans - Americans Missing Car Payments Is a Symptom of a Much Bigger Problem / Interest-Rates / US Debt
By: John_Mauldin
By Robert Ross Transportation is a big issue in most of the US.
It’s so big that for the majority of Americans having a car is a matter of survival. Most people can’t even go to work without a car.
That makes auto payments a high priority. And yet, the number of people who can’t make them is rising fast.
Last week, the Fed warned that auto delinquencies—or missed payments on auto loans—are on a steep rise.
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Friday, February 22, 2019
This Money-Destroying Policy Could Soon Become a Reality / Interest-Rates / Quantitative Easing
By: John_Mauldin
It was my first encounter with what I thought was economic insanity.
More than 10 years ago, I came across the ideas of economist Bill Mitchell of the University of Newcastle in New South Wales.
He was teaching what he called Modern Monetary Theory (MMT). I looked into it and quickly dismissed it as silly.
Actually printing money as an economic policy? Get serious.
Fast forward to today, the idea is adopted by new socialist-like movements in the US and abroad. It’s cited by politicians and mainstream media.
There’s a growing number of rationales for adopting MMT into our philosophical base.
Thursday, February 21, 2019
QE Forever: The Fed's Dramatic About-face / Interest-Rates / Quantitative Easing
By: Ellen_Brown
“Quantitative easing” was supposed to be an emergency measure, but the Federal Reserve is now taking a surprising new approach toward the policy. The Fed “eased” shrinkage in the money supply due to the 2008-09 credit crisis by pumping out trillions of dollars in new bank reserves. After the crisis, the presumption was the Fed would “normalize” conditions by sopping up the excess reserves through “quantitative tightening” (QT)—raising interest rates and selling the securities it had bought with new reserves back into the market.
Monday, February 18, 2019
The Corporate Debt Bubble Is Strikingly Similar to the Subprime Mortgage Bubble / Interest-Rates / Corporate Bonds
By: John_Mauldin
By Robert Ross : “Housing prices in the US never go down.”
Just about everyone in America believed that in the mid-2000s.
A limited amount of buildable land and a growing population would keep housing demand strong.
So, house prices will continue to rise.
That was the thinking, anyway.
Even some of America’s brightest minds—like former Federal Reserve Chairman Alan Greenspan—jumped on the stable housing bandwagon.
Monday, February 18, 2019
Stacking The Next QE On Top Of A $4 Trillion Fed Floor / Interest-Rates / Quantitative Easing
By: Dan_Amerman
The Federal Reserve is currently communicating to the markets that it will likely pivot, and pause two strategies. The first pivot is to stop increasing interest rates. The second pivot is to stop unwinding the Fed balance sheet.
While the interest rate pause is getting the most attention - the balance sheet pause could be the most important one for investors over the coming years.
As explored herein, the impact of pausing the unwinding the balance sheet is to create a new floor at about $4 trillion in Federal Reserve assets. And if the business cycle has not been repealed and there is another recession - the Fed fully intends to go back to quantitative easing, potentially creating more trillions of dollars to be used for market interventions, and to stack another round of balance sheet expansion right on top of the previous round.
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Tuesday, February 12, 2019
The $12 Trillion Federal Debt Bombshell / Interest-Rates / US Debt
By: Michael_J_Kosares
“Who on earth, or in global finance, will buy this looming mountain of Treasuries?”
“Investment in gold now is insurance. It’s not for short-term gain, but for long-term protection. I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counter-party signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counter-party. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.” – Alan Greenspan, former Fed chairman
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Friday, February 01, 2019
Fed Statement Commentary / Interest-Rates / US Interest Rates
By: Peter_Schiff
While some may have been confused by Fed Chairman Powell's circular statements in yesterday's press conference, the takeaway should be abundantly clear: the period of Fed tightening, is over. The Fed will now hold steady on interest rates, and when they move again, they are more likely to lower rates than to raise them. And while the Fed's program of balance sheet reductions is technically still underway, Powell made it clear that the program is no longer on "automatic pilot" and that the $50 billion per month of bond sales will likely diminish, and ultimately, conclude much earlier than anyone had predicted just a few weeks ago.
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Wednesday, January 30, 2019
Fed Fold Under Pressure, Telegraphs Looser Money Ahead / Interest-Rates / US Interest Rates
By: MoneyMetals
Two big questions have been front and center for Fed watchers in recent months...
The first is just how high rates could go before stimulus-addicted markets would falter. The second is whether our central bankers would bow to pressure once markets faltered and politicians began calling for the Fed to resume easy money policies.
Both questions now seem to have an answer.
They began to wonder in earnest if sky-high stock market valuations could be supported in an environment where Fed officials promised to keep rates moving even higher for the foreseeable future.
Monday, January 28, 2019
Will 35th Recession Bring A Swift Return To Zero Percent Interest Rates? / Interest-Rates / US Interest Rates
By: Dan_Amerman
Many people view the seven years of zero percent interest rates experienced in the United States between 2008 and 2015 as being safely in the past, with normal times having returned.
As explored in this analysis, so long as the business cycle of expansions and recessions has not been repealed - then we are highly likely to see a swift return to a potentially protracted bout of zero percent interest rates with the next major downturn in the economy.
Indeed, even the staff of the Federal Reserve itself expects more frequent episodes of zero percent interest rates in the future, and for those episodes to be on a more protracted basis.
This just may change everything when it comes to the financial plans of retirement and other long term investors. Zero percent interest rates don't just eviscerate the ability of retirees to earn interest income, but they also fundamentally change stock, bond, housing and precious metals prices, moving them to places that are outside of the historical averages.
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Sunday, January 27, 2019
Fed Doves Take Flight (But We Are Not in Kansas Anymore) / Interest-Rates / US Interest Rates
By: Gary_Tanashian
Wise guys trading Fed Funds futures see no more rate hikes in 2019, and a few even imagine a rate cut before year-end. Here are the projections for the next 3 meetings, showing an overwhelming view that the Fed will hold the current 225-250 target rate. Graphics: CME Group
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Tuesday, January 22, 2019
The US Interest Rate Hawks Surrender / Interest-Rates / US Interest Rates
By: Peter_Schiff
They say that there are no atheists in fox holes. Recently it has also become clear there are no monetary hawks in bear markets.
For much of the last decade many conservative market analysts have decried our reliance on monetary stimulus to prop up the economy and the stock market. But in the final months of 2018, in the face of the worst stock market declines in a decade, many of these supposedly pragmatic figures quickly abandoned their convictions. As the markets briefly crossed into bear territory, monetary hawks joined with the doves and President Trump in issuing a full-throated call for the Fed to cancel their planned rate hikes and balance sheet reductions. It appears as if the Fed got the message. Almost overnight, the tone from the Fed softened considerably, causing Wall Street to sound the "all clear."
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Friday, January 18, 2019
Debt, Division, Dysfunction, and the March to National Bankruptcy / Interest-Rates / US Debt
By: MoneyMetals
Never in our lifetimes has American politics been so marked by division and dysfunction.
The longest partial government shutdown in history occurred after the Democrat-controlled Congress wouldn’t compromise with President Trump on a border wall. The impasse is but one symptom of a deeper malady – one that threatens to wreak wider social and financial instability in the years ahead.
Put plainly, the pillars of the American system as we have known it are eroding.
No longer are we unified in support of the Constitution and a (more or less) free market economy. A growing faction within one party favors socialism and outright rejects foundational American principles such as free speech, gun rights, and limited government.
Wednesday, January 16, 2019
It’s Not Polite, but I’m Pretty Pissed at the Fed / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
This essay is going to insult a bunch of smart, maybe even brilliant, people. It is not polite nor is it politically correct. I will try to be better. But right now, I am pretty pissed.
Here’s the thing.
No serious scientist would run a two-variable experiment. By that I mean, you run an experiment with one variable to see what happens.
If you have two variables and something happens—either good or bad—you don’t know which variable caused it.
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Monday, January 14, 2019
Has the Fed Already Gone Too Far? / Interest-Rates / US Interest Rates
By: Michael_Pento
It is crucial for investors to understand that the Federal Reserve has not yet turned dovish and the Fed “Put” it not yet in place. Wall Street sometimes hears what it desperately needs, but that does not make it fact. While Jerome Powell has moved incrementally towards the dovish side of the ledger in the past few weeks, the Fed is still firmly in hawkish territory. If, however, Mr. Powell was actively reducing the Fed Funds Rate (FFR) and expanding the balance sheet, then we would have a dovish Fed. However, by just indicating that the FOMC might be close to finishing its rate hiking campaign, while still selling nearly $50 billion of bonds every month from its balance sheet, the Fed is still tightening monetary policy--and in a big way.
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Tuesday, January 08, 2019
Kendall and Hochberg: Interest Rates Win Again as Fed Follows Market / Interest-Rates / US Federal Reserve Bank
By: EWI
Most economists and financial analysts believe that central banks set interest rates.
For more than two decades, Elliott Wave International has tracked the relationship between interest rates set by the marketplace and interest rates set by the U.S. Federal Reserve and found that it's actually the other way around--the market leads, and the Fed follows.
The latest Federal Reserve rate decision on December 19 brought the usual breathless anticipation. Confusion reigned as the U.S. president as well as a former Fed board member publicly urged the U.S. central bank not to raise rates and many wondered if the Fed would "rescue" investors with a surprise decision to leave them unchanged. The Fed, however, did what it almost always does: it brought its rate in line with market rates.
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Monday, January 07, 2019
Half of Investment-Grade Bonds Are Just One Step from Junk Status / Interest-Rates / Corporate Bonds
By: Submissions
BY ROBERT ROSS :
The S&P fell 10%. It was its worst December since 1931.When the market drops, conventional investing wisdom says buy bonds. And this is what investors did.
Many have shifted money out of stocks into bonds. Much of that money has flowed into investment-grade corporate bonds.
These bonds are seen as some of the safest bonds investors can buy. The problem is that investment grade doesn’t mean what it used to.
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Wednesday, December 26, 2018
Federal Reserve – Conspiracy Or Not? / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
Conspiracy surrounding the Federal Reserve is a subject of much debate. A controversial topic, yes; one which stirs the imagination of some, fires the suspicion of others, and provokes the declamation of not too few detractors.
From G. Edward Griffin/The Creature From Jekyll Island…
Read full article... Read full article...“Back in 1910, Jekyll Island was completely privately owned by a small group of millionaires from New York. We’re talking about people such as J. P. Morgan, William Rockefeller and their associates. This was a social club and it was called “The Jekyll Island Club.”
Wednesday, December 26, 2018
5 Potential Impacts of The LIBOR Expiration In 2021 / Interest-Rates / Mortgages
By: Submissions
In 2021, one of the most important financial tools will disappear. The London Interbank Offer Rate, or LIBOR, is the average estimated interest rate for loans between major London banks. In the decades since this number was created, it became a major element in determining short-term interest rates internationally. The interest on roughly $350 trillion contracts and loans rely on this number. Yet the UK government has ordered that the LIBOR be phased out by 2021. As a financier making long term plans, this can seem like a crisis waiting to happen. There are many possibilities for a future without the LIBOR, and not all of them are bad. Here are potential impacts of the LIBOR expiration in 2021.
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Sunday, December 23, 2018
The Fed Tightens the Monetary Noose / Interest-Rates / US Interest Rates
By: Steve_H_Hanke
The Fed defied President Trump’s irreverent Tweets. Indeed, the Fed did what it signaled it was going to do long before Trump pushed the “Tweet” button. Yes, the Fed—with all 10 members of the Federal Open Market Committee (FOMC) voting “yes”—increased the federal funds interest rate by 25 basis points to the 2.25-2.50% range. And, as night follows day, the U.S. equity markets, currency markets, and precious metals markets took a hit.
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Friday, December 21, 2018
FOMC Update - Jerome ‘Dead Eye’ Powell / Interest-Rates / US Federal Reserve Bank
By: Gary_Tanashian
One of the most disturbing scenes in the series Breaking Bad was when Todd shoots and kills a boy on a dirt bike after he witnessed Heisenberg, Jesse and Todd heist 900 gallons of methylamine. Jesse: “Todd, that Opie Dead Eyed piece of shit…”
That is similar to the feeling I got after the Fed hiked the funds rate as expected, but then declined to offer the stock market much relief for its ongoing temper tantrum.
What’s this? The Fed is not doing as the vast majority of market participants expect it to do? The Fed is not taking active measures to boost asset prices?
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Sunday, December 16, 2018
Gerald Celente:Central Banks Can’t Stop a 2019 Debt Disaster / Interest-Rates / Global Debt Crisis 2019
By: MoneyMetals
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason. Coming up the one and only Gerald Celente joins me to talk about the upcoming trends for 2019 both geopolitically and economically. Gerald breaks down the chaos in Europe, tells us whether or not major protests are likely to break out here in the states and shares his outlook for the metals. Don’t miss a tremendous interview with Gerald Celente, publisher of the Trends Journal and top trends forecaster in the world, coming up after this week’s market update.
Well, as Democrat leaders face off against President Donald Trump over the federal budget, bulls and bears in the gold and silver markets are facing off at key price levels.
The gold market attempted to rally above the $1,250 level this week but ran into some selling pressure. As of this Friday recording, gold prices come in at $1,236 per ounce, off 1.0% for the week.
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Saturday, December 15, 2018
Market Confusion About the Yield Curve Inversion / Interest-Rates / Inverted Yield Curve
By: Donald_W_Dony
Last week, the 5-year Treasury note fell below the 2-year note causing many market watchers to suggest the US Yield Curve is inverting. And as the Curve is a leading indicator to the stock market, the bears came out in force declaring the party has ended.
Nothing could be further from the truth.
The more important yield comparison to watch is the 2-year Treasury note versus the 10-year note.
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Thursday, December 13, 2018
Trump vs the Fed: Who Wins? / Interest-Rates / US Federal Reserve Bank
By: Richard_Mills
Who controls the US economy? The “power of the purse” resides within the US Congress and the powers to set fiscal and monetary policy are delegated to the US Central Bank, otherwise known as the Federal Reserve.
While the success of US Presidents often depends on how well the economy does during their terms, in fact they have little direct influence on it. The President can guide the economy and put his stamp on unlimited pieces of legislation, but he must work with Congress and the Federal Reserve in order to execute his agenda.
To demonstrate just how powerless the President is over the economy, you need only look at Article II of the US Constitution which outlines the responsibilities of the Executive Branch:
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Tuesday, December 04, 2018
The Debt Great Reset Is Coming / Interest-Rates / US Debt
By: John_Mauldin
The US government on-budget deficit was $100.5 billion in October. It was $63.2 billion in the same month a year earlier. I see little hope it will reverse.There is no appetite in Congress or the public for lower spending. Nor will we see the kind of tax policy changes that would generate more revenue.
Federal debt has grown with little complaint (except from a few of us curmudgeons) because it was mostly painless over the last decade.
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Saturday, December 01, 2018
Ray Dalio: This Debt Cycle Will End Soon / Interest-Rates / US Debt
By: John_Mauldin
Science tells us energy can neither be created nor destroyed within a closed system. The form may change, but the amount will only stay the same. If this only held true for debt.Within the closed system called Earth, we create debt much better than we eliminate it.
Well, when we have too much, we eventually get rid of it. But we do so in painful and unpleasant ways—via some kind of debt crisis.
This has happened over and over again throughout history. And there’s real possibility that we will soon face another major debt crisis...
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Monday, November 19, 2018
Calls Intensify for Halting Interest Rate Hikes / Interest-Rates / US Interest Rates
By: MoneyMetals
President Donald Trump isn’t thrilled about Jerome Powell’s stewardship of the dollar and interest rates. He would like the central bank’s help in keeping the economic party going, but so far the Fed Chair just won’t play ball. Now the Wall Street Journal has joined the President’s call for some renewed stimulus.
If officials at the Fed want to pause or even reverse course on raising interest rates, they have cover to do so. As yet, however, the consensus remains unshaken. The markets are counting on another rate hike following next month’s FOMC meeting.
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Saturday, November 17, 2018
The Fed's Misleading Money Supply Measures / Interest-Rates / Money Supply
By: Steve_H_Hanke
The most robust national income determination model is the monetarist model. The course of the economy when measured in nominal terms is determined by the course taken by the money supply. Indeed, the positive relationship between the growth rate of the money supply and both nominal GDP and nominal aggregate demand growth is unambiguous and overwhelming.
So, just what is the measure of money that is most suited for taking the temperature of the economy and forecasting its course? Is a narrow metric, like the monetary base (M0), the best? Or, should we focus on broad money metrics, like M3 and M4? For national income determination, the more inclusive the metric, the better. Indeed, for the most complete and accurate picture, one should include all the important components of money supply, not just a few.
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Monday, November 12, 2018
Stock Trade-of-the-Week: Equity Commonwealth REIT (EQC) / Interest-Rates / Investing 2018
By: Donald_W_Dony
Company profile: Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. As of June 30, 2018, EQC's portfolio comprised 13 properties and 6.3 million square feet.
Monday, November 12, 2018
A Worldwide Debt Default Is A Real Possibility / Interest-Rates / Global Debt Crisis 2018
By: John_Mauldin
Is debt good or bad? The answer is “Yes.”
Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise don’t have cash yet.
Whether it’s wise or not depends on what you buy. Debt to educate yourself so you can get a better job may be a good idea. Borrowing money to finance your vacation? Probably not.
The problem is that many people, businesses, and governments borrow because they can. It’s been possible in the last decade only because central banks made it so cheap.
Sunday, November 11, 2018
Here’s Why 10%+ US Treasury Bond Yields Are a Real Possibility / Interest-Rates / US Bonds
By: John_Mauldin
The US Treasury has closed the books on Fiscal Year 2018, which was another debt-financed failure.The federal government spent above $4.1 trillion in FY 2018. It had to borrow $779 billion on budget and a few hundred billion more off-budget.
And over 40% of the on-budget deficit went simply to pay $325 billion in interest on previously-issued debt.
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Thursday, November 08, 2018
Future US Interest Rates, Financial Markets, and the FED / Interest-Rates / US Interest Rates
By: Raymond_Matison
Don’t fight the FED, is a long-established, oft-confirmed market proverb. The FED is indeed an incredibly powerful institution; in fact, it is perhaps the most powerful institution on the planet. It is arguably more powerful than our combined air, sea, and land military forces. These forces can reduce individual military targets to dust, they can flatten cities or even small countries killing thousands of people, but still it is no competition to the FED! The FED with its power over interest rates and money creation, its expansion or contraction, its Petrodollar and global trading currency, its open market operations, and its foreign currency exchange markets can destroy the value of foreign currencies, and start revolutions. It can injure or even destroy economies of single countries or even whole regions of the developing world, in turn crippling the lives of tens or even hundreds millions of people. It can finance wars, determining who will be victorious.
Wednesday, November 07, 2018
Arguing About Fed Policy Is A Waste of Time / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
When government (or a President) claims that Federal Reserve policy is hurting the economy, they are either grandstanding, or are ignorant about the function and purpose of the Federal Reserve.
No one wants to see the economy suffer, anymore than they want to see a plague, or infectious disease, affect millions of people. And no President wants to be in office to preside over a recession or depression. But neither can they exercise any power or influence regarding the implementation of Fed policy; particularly when it comes to interest rates.
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Monday, October 29, 2018
The Great Interest Rate Caper / Interest-Rates / US Interest Rates
By: Andy_Sutton
It began as any other bull market. An early burst followed by climbing a wall of worry, then bursting out (or down in this case) beyond the wall of worry, its trajectory headed for the great ethereal unknown. And just like every similar time in history, market analysts, policy makers, and the general public assumed it would go on like this forever. And it did. Until it didn’t. By the title you might have already guessed the topic of this essay but think for a minute about this first paragraph and what we’re discussing in generic terms. Of course! We’re talking about the traits of a financial bubble.
By way of introduction, this essay will not contain any images. We have found that many times graphs and charts confuse the issues rather than helping to elucidate them.
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Monday, October 15, 2018
US Bond market Yields Break 20-year Trends / Interest-Rates / US Bonds
By: Donald_W_Dony
Bond yields have been in decline for a long time. In fact, throughout the last 20 years, the 10 and 20 year US Treasury bonds yields have dropped by almost 80 percent.
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Sunday, October 14, 2018
Here’s Where the Next Financial Crisis Begins / Interest-Rates / Global Debt Crisis 2018
By: Harry_Dent
The 2008 financial crisis was well overdue, what with predictably slowing demographics, especially in the U.S. at first, and an unprecedented debt bubble in the developed countries.The trigger was the subprime crisis – a small, but high-risk sector of really bad loans that started to blow up when everyday households started to default on mortgages they could never afford in the first place. But that was only the trigger.
Since early 2009, we’ve seen unprecedented money printing to save the banking system and economy from a depression, and most of the new debt has accumulated in the third world. A McKinsey study shows that emerging markets have taken on $57 trillion in additional debt through 2014, with more to follow.
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Sunday, October 14, 2018
Fed is Doing More Than Just Raising Rates / Interest-Rates / US Federal Reserve Bank
By: Rodney_Johnson
Over the past month the 10-year Treasury bond yield has jumped from under 3.00% to 3.23%, sending tremors through the equity markets. By now you’ve heard/read/thought about the usual suspects.As interest rates move higher, equity investors searching for income finally (finally!) have a viable alternative to stocks.
As interest rates move higher, consumers using borrowed funds to purchase homes, cars, and stuff on credit cards will have to pay more, which should curb their economic appetite.
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Thursday, October 11, 2018
Loss Of Yield Curve "Shock Absorber" Could Mean A Rough Ride Ahead For Markets & Housing / Interest-Rates / US Interest Rates
By: Dan_Amerman
Two important financial cycles are currently converging for the first time in more than ten years, and how they work in combination can provide key information about the future value of our retirement portfolios, the future prices of our homes, and even when the next recession may hit.
A continuing cycle of interest rate increases by the Federal Reserve has pushed Fed Funds rates up 2% from their floor. This same cycle has contributed to rapidly rising long term interest rates, with 10 year Treasury yields rising to 3.22% by the market close on October 5th, 2018.
This sharp surge in interest rates has led not only to falling bond prices, but to tumbling stock prices as well.
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Sunday, October 07, 2018
The Latest Double Standard from the Fed / Interest-Rates / US Federal Reserve Bank
By: Rodney_Johnson
Collectively, we just got screwed again, and I bet most people didn’t even know it. It happens so many times, particularly at the hands of the Federal Reserve, it’s hard to keep track.A new bank called The Narrow Bank, or TNB, recently applied for an account with the Fed.
This would give the bank recognition by a local reserve bank, in this case New York, and access to its services, like distribution of currency, check processing and other forms of electronic payments.
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Friday, October 05, 2018
Chinese Credit Collapse Is Imminent / Interest-Rates / China Debt Crisis
By: John_Mauldin
Many good things are happening in China.Businesses are prospering. Living standards rise. The country’s interior is still quite poor but life is improving.
This progress is welcome news. The problem is how China is financing it. The answer is, “with a lot of debt.”
You often hear about China’s government and corporate debt, but less about households.
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Thursday, October 04, 2018
Eurozone Debt Crisis - Italy and the Euro Unplugged / Interest-Rates / Italy
By: Axel_Merk
Why is it that Italy causes such a stir in financial markets when proposing a budget? Is it politics or is the stability of the financial system at stake? In our assessment, the best way to avert a crisis is to allow market forces to play out. Let me explain.
We all “know” Italy is in trouble. Well, before we jump to conclusions, let’s look at a few charts. Above is the Italian unemployment rate; it’s come off a high level, but still elevated. When policy makers call for structural reform, it is a codeword for increasing flexibility in the labor market, i.e. making firing easier. If firing workers is difficult, companies won’t hire workers. It’s also in this context that providing a so-called basic income is criticized by some as providing a disincentive to join the labor force (aside from cementing higher deficits for years to come). Basic income means you get paid, whether you work or not. In practice, the devil is in the details, as European workers have long enjoyed unemployment benefits; streamlining such benefits might actually save the government money. That said, Germany’s low unemployment, to a significant extent, may be due to the fact that welfare benefits were curtailed in 2002 (with a social democrat as chancellor), providing an incentive for workers to join the workforce.
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Thursday, October 04, 2018
US Bond Yields Positioned for Upside Acceleration / Interest-Rates / US Bonds
By: Mike_Paulenoff
Ten-year Yield has climbed to a new post-July 2016 (1.32%) high at 3.17%, the highest yield since July 2011, over 7 years ago!
From a technical perspective, today's surge above May-Oct 2018 resistance at 3.11% is a reaction to very strong recent data showing strong ADP Payrolls for September (230,000 vs. 185,000 expected), and impressive ISM Non-manufacturing data across the Headline data (61.6 vs. 58 expected), as well as the sub-surveys in Business Activity, Prices, Orders and Employment for September.
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Tuesday, October 02, 2018
Global Central Banks Enter the Danger Zone / Interest-Rates / Central Banks
By: Michael_Pento
Investors are experiencing huge moves in commodities, currencies, equities and in sovereign debt across the globe. And now the fall has arrived. Expect the volatility currently witnessed in markets to only surge.
This is because global central banks have overwhelmingly turned hawkish in a vain attempt to gradually let the air out of the massive bubbles they have spent the last decade recreating. Unfortunately, that is not the nature of asset bubbles—they don’t end with a whimper--and they are about to burst in violent fashion.
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Tuesday, September 25, 2018
Whose Trillion is it Anyway? US Federal Government Shocker! / Interest-Rates / US Debt
By: Andy_Sutton
The headline reads ‘Trump adds a trillion dollars to the national debt in 14 months’. Before you stop reading, give us a minute; this isn’t an article about Trump or politics for that matter. It’s about a process, a series of policies, and an approach that has been in place for decades now, irrespective of political parties. What we are going to give you are facts, not opinions. Those of you who read regularly should know us well enough to understand that we have no use for the ‘lesser of two evils / left-right paradigm’ approach to our Republic. Or what is left of it to be accurate.
Sunday, September 02, 2018
How Much does the UK Really Owe in Debt? / Interest-Rates / UK Debt
By: Dylan_Moran
...
Saturday, September 01, 2018
US Interest Rates - A Pound of Cure / Interest-Rates / US Interest Rates
By: Peter_Schiff
This week, as investors and economists fixate on record highs set by major stock market indices, they have ignored much more significant developments that emerged from the Federal Reserve's annual meeting in Jackson Hole, Wyoming. Fed Chairman Jerome Powell delivered a speech that somehow was almost universally interpreted as a reiteration of his commitment to continue to raise rates throughout the next few years. "Steady as she goes" was the takeaway from just about any news outlet. But the Chairman's actual message was essentially the opposite of what the media reported. From my perspective, it provided evidence that President Trump has succeeded in getting Powell's mind right on the need for the Fed to continue to stimulate the economy, no matter how much evidence emerges that it is already over-stimulated.
Friday, August 31, 2018
Recommendation for Bond Investors: Don’t Fight Financial Repression / Interest-Rates / US Bonds
By: F_F_Wiley
The Congressional Budget Office (CBO) released two supplemental reports this month—the first reveals budget scenarios it “did not have enough time” to include in June’s 2018 Long-Term Budget Outlook, and the second shows what needs to happen for policy makers to reach certain government debt targets.
I plan to post a few charts summarizing the new reports, but because I’m sounding off on bonds for now (or in a moment) and don’t need all the detail to support my argument, I’ll share only a short summary of the first report.
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Sunday, August 26, 2018
How The Credit Market Is Doing in 2018 / Interest-Rates / Financial Markets 2018
By: Dylan_Moran
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Tuesday, August 21, 2018
US Treasury Bonds $TNX Curveball Update / Interest-Rates / US Bonds
By: Rambus_Chartology
Over the last several months or so I’ve been writing about the bond market throwing us a possible curveball. Instead of continuing rising interest rate we may see falling rates. Today the $TNX, 10 year treasury yield finally broke below the neckline we’ve been following that started to developing back in January of this year. I’ve labeled the H&S top as an unbalanced H&S top as the price action formed a second right shoulder that was a small H&S top. A backtest to the neckline would now come into play around the 28.65 area.
Monday, August 20, 2018
Turkey Debt Crisis is Not Contained / Interest-Rates / Turkey
By: Michael_Pento
During my last appearance on CNBC, before I was banned several years ago, I warned that the removal of massive and unprecedented monetary stimuli from global central banks would have to be done in a coordinated fashion. Otherwise, there would be the very real risk of currency and debt crises around the world. However, coordination among central banks is not what is happening. The Fed is miles ahead in its reversal of monetary stimulus, as it has already raised rates seven times; with two more 25bps rate hikes in the pipeline scheduled for later this year. It has also avowed to sell off two trillion dollars’ worth of debt off its balance sheet--while the rest of the world’s central banks are far behind in this monetary tightening course. This has led to a significant increase in the value of the US dollar.
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Wednesday, August 15, 2018
A Bullish Bond Argument That Hides in Plain Sight / Interest-Rates / US Bonds
By: F_F_Wiley
It’s been awhile since I advised anyone to load up on long Treasuries. The bearish bond narrative has been too strong for that, thanks largely to fiscal policy but also to near-4% unemployment rates, quantitative tightening and—maybe most threatening of all—tit-for-tat tariffs.
In fact, I challenge anyone to think of a time during the past two decades when bond bears (read: most mainstream commentators) have possessed a more compelling Powerpoint pack.
But maybe the powerful bear story has become overplayed, maybe it was fully or almost fully priced in by mid-May, when the 10-year Treasury yield reached a six-year high of 3.11%. If so, it might be a good time to revisit the argument that the secular bull is still intact, a time for contrarians to speak up.
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Tuesday, August 14, 2018
The Federal Reserve: Secretly Sticking It to Americans for Over 100 Years / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
In the aftermath of the 2008 Financial Crisis, the private Federal Reserve bank cartel was front and center as a target for public outrage.
Former U.S. Congressman Ron Paul’s "End the Fed" message suddenly resonated. Americans hated Fed officials bailing out the banksters – richly rewarding them for crooked and irresponsible behavior which helped create the crisis.
But years have passed. Americans have been enjoying the expansion stage of the next great bubble. The central planners at the Fed and their colleagues at the nation’s largest banks have been busy stimulating the real estate, equity, and bond markets.
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Monday, August 13, 2018
72% of the Base Interest Rate Rise Already Factored into Mortgage Fixed Rates / Interest-Rates / Mortgages
By: MoneyFacts
Moneyfacts UK Mortgage Trends Treasury Report data, not yet published, highlights that two-year fixed rates were already on the rise before the Bank of England’s announcement earlier this month, with the average two-year fixed rate having risen by 0.18% since January 2018.
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Saturday, August 11, 2018
Greek Debt Tragedy is Far From Over / Interest-Rates / Eurozone Debt Crisis
By: Rodney_Johnson
Last week, Greece received $17 billion from its creditors, representing the final installment of the country’s third bailout since 2010.This is the last one.
Really. Stop laughing.
There’s no doubt the Southern Mediterranean country has endured a lot of pain over the last eight years.
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Monday, August 06, 2018
Technical Analysis and Interest Rates Unchanged – Here We Go / Interest-Rates / US Interest Rates
By: Chris_Vermeulen
The US Federal Reserve is one of the only central banks to attempt to raise rates consistently over the past few years, has possibly learned a very valuable lesson – no good comes from raising rates to the point of causing another market collapse. The news that the US Fed will leave interest rates where they are, temporarily, is good news for a number of reasons.
First, this allows the markets to shake out weaker players and weaker components of the corporate world. Where corporate debt levels are concerned, interest rates are tied to debt repayment liabilities and refinancing costs. Firms that are unable to manage at current interest rates certainly would not be happy about rising rates. This allows these corporations to either struggle to resolve their debt issues or collapse under the weight of their own debt. This will also play out in the foreign markets as well.
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Saturday, August 04, 2018
Breaking Down the US Budget Deficit / Interest-Rates / Government Spending
By: Rodney_Johnson
Second-quarter U.S. GDP jumped by an annualized 4.1%, putting a spring in the step of the Trump administration and the congressional leadership.And why not?
Those two groups are responsible for turbo-charging the U.S. economy through tax reform, which cut taxes by more than $1 trillion, putting a ton of cash in the hands of corporations and consumers.
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Thursday, August 02, 2018
Bank of England Base Rate Increases to 0.75% / Interest-Rates / UK Interest Rates
By: MoneyFacts
The Bank of England’s decision to increase interest rates from 0.50% to 0.75% marks the first time the base rate has risen above 0.50% in almost 10 years. But what does this latest increase mean to the average person on the street?
Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:
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Wednesday, August 01, 2018
Trump Declares War on the Fed / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
It appears when it comes to fighting the old Washington establishment---comprised of the deep state and the Federal Reserve--Mr. Trump is getting sucked into the vortex of the D.C. swamp rather than draining it. The hope was for our “Disrupter in Chief” to be more concerned about our children’s future than his own; and for his focus to span beyond the next election cycle. Instead of allowing consumers to finally receive a real return on their savings; and to let asset bubbles seek a level that can be supported by the free market, Trump has chosen to breach a boundary that has been essential to providing hope for the future solvency of our nation.
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Thursday, July 19, 2018
The Fonzie–Ponzi Theory of Government Debt: An Update / Interest-Rates / Global Debt Crisis 2018
By: F_F_Wiley
This post is excerpted from my book Economics for Independent Thinkers, although with some updating. It seems relevant after the CBO’s latest long-term budget outlook, which in its optimistic “baseline scenario” called for America’s net federal debt to double over the next 30 years, rising from 76% of GDP in 2017 to 152% in 2048.
Before reaching this chapter or even picking up this book, I imagine many of you were already loosely divided into the two major camps of the public debt debate. The first camp is already concerned and doesn’t need my research to form an opinion. These people stress the math involved in borrowing—the idea that you get do extra stuff today, but you have to somehow pay for it in the future. Meanwhile, those in the other camp ask, “So what?” They might argue that America will make good on its debt because “it always does.” Or they’ll point confidently to America’s unique advantages as a military superpower, paragon of political stability, and steward of the world’s predominant reserve currency. Confronted with the lessons of history, they’ll say, “This time is different.”
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Saturday, July 14, 2018
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft / Interest-Rates / US Debt
By: MoneyMetals
Mike Gleason: It is my privilege now to welcome in Keith Weiner, CEO and Founder of Monetary Metals, and President of the Gold Standard Institute USA. Keith is a hard money advocate who has been an outspoken proponent for the gold standard and restoring sound money to our nation's monetary system. Keith has a PhD from the New Austrian School of Economics, and his articles have appeared in numerous publications on Internet sites throughout the globe, and it's a real pleasure to have him on with us today.
Keith, thanks so much for taking the time, and welcome.
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Friday, July 13, 2018
How International Observers Undervalue the Chinese Bond Market / Interest-Rates / China
By: Dan_Steinbock
Criticism is typical of vibrant international media. Yet, prejudiced biases in financial matters have the potential to harm investors worldwide. The Chinese bond market is a case in point. Not only is China’s bond market growing explosively, but it has become diversified and provides broad investment options to both Chinese and foreign investors.
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Tuesday, July 03, 2018
Is this the Most Hawkish Fed Ever? / Interest-Rates / US Interest Rates
By: Michael_Pento
My research shows that this is one of the most hawkish Fed rate-hiking regimes ever. It has raised rates seven times during this current cycle and is on pace to raise the Fed Funds Rate(FFR) four times this year and three times in 2019.But what makes its monetary policy extraordinarily restrictive is that for the first time in history the Fed is also selling $40 billion per month of Mortgage Backed Securities (MBS) and Treasuries starting in Q3 and $600 billion per year come October. Because the Fed is destroying money at a record pace while the rest of the world’s major central banks are still engaged in money printing (QE) and zero interest rate policies (ZIRP), Jerome Powell’s trenchant and unilateral tightening policy is now causing chaos in emerging markets.
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Saturday, June 30, 2018
Things To Know About This Week’s CBO US Debt Report / Interest-Rates / US Debt
By: F_F_Wiley
Here are six things you might like to know about the Congressional Budget Office’s 2018 Long-Term Budget Outlook, which was released on Tuesday.
- The CBO’s baseline scenario shows federal debt held by the public rocketing upward at a trajectory not seen since 2009, but this time on a sustained basis and breaching 150% of GDP by 2048. Here’s the chart:
Tuesday, June 26, 2018
The Federal Reserve And Long-Term Debt – Warning! / Interest-Rates / US Debt
By: Kelsey_Williams
Won’t somebody please say something different about the Federal Reserve? Or nothing at all?
It seems amazing to me that we are so studiously focused on comments, statements, or actions emanating from the Fed. It is as if we expect to find a morsel of truth that will give us special insight or a clue as to their next move.
I suppose that is reasonable to a certain extent – especially today. We are social-app (il)literate and very impatient. Seems to be a sort of day-trader mentality. Problem is that every morning we see the same headlines. All week long we hear about the most recent Fed meeting, or the release of minutes from the last meeting, or what to expect at the next meeting, etc., etc. And the cycle repeats itself every month. (I’m not Bill Murray and this is not Ground Hog Day.)
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Tuesday, June 26, 2018
The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?) / Interest-Rates / US Interest Rates
By: F_F_Wiley
I realize it’s getting late to discuss the June 12–13 FOMC meeting, but I think the Fed’s biggest news from that meeting may have slipped under the radar. To confirm the relevance of what I thought I heard during the post-meeting press conference, I spent some time last week reviewing old speeches, transcripts and other materials produced by Fed officials. I’m now convinced that Chairman Jerome Powell delivered an important message that went largely unreported, and I expect him to keep at it until people take notice.
Powell’s message is that he intends to pop bubbles—both asset-price and credit bubbles. He didn’t communicate a precise threshold for bubble popping, but I believe he meant not just big bubbles but potentially little bubbles and possibly even pre-bubbles if that becomes necessary to contain the risks of financial instability. If we take him at his word, we should expect him to respond much more aggressively than his predecessors did to financial excesses, and those aggressive responses will occur even without an inflation threat. In other words, policy adjustments designed to maintain financial stability could disconnect from the FOMC’s inflation target.
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Monday, June 25, 2018
Powell is Playing “Chicken” With $10 Trillion in $USD Shorts / Interest-Rates / US Federal Reserve Bank
By: Graham_Summers
Thus far in his tenure as Fed Chair, Jerome Powell has emphasized that he is more concerned with the real economy than the financial markets.
Put another way, the Powell Fed, unlike the Bernanke or Yellen Feds before it, is willing to sacrifice stocks in the name of normalizing monetary policy provided the economy can withstand it.
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Thursday, June 07, 2018
Judgment Day for the ECB / Interest-Rates / ECB Interest Rates
By: Arkadiusz_Sieron
Will the ECB Withstand Pressure?
Next week, the ECB will hold its monetary policy meeting. The bank was expected to start winding down its stimulus program at the end of 2018. However, Italian turmoil led some analysts to think that the ECB will remain cautious. Will the ECB withstand the pressure or funk? And what does it all mean for the gold market?
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Tuesday, June 05, 2018
What the Bond Markets Are Finally Saying About Italy / Interest-Rates / Italy
By: Harry_Dent
Over the years I’ve spent much time talking about Italy as the next ticking time bomb for Europe and the global banking system.It’s government debt is the third highest in the world at 132% of GDP, coming only after Japan and Greece.
Its private debt is 23% of the Eurozone versus Greece’s 3%.
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Friday, May 25, 2018
The Bond Market Just Figured Out That Central Banks CANNOT Exit / Interest-Rates / US Bonds
By: Graham_Summers
To recap yesterday’s piece concerning the recent shift in Central Bank policy, from mid-2016 onward:
1) Central Banks engaging in emergency levels of QE at a time in which their respective economies were growing.
2) Inflation bottoming then beginning to rise.
3) Bond markets starting to revolt.
4) Central Banks opting to walk back their QE programs.
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Monday, May 21, 2018
Inverted Yield Curve: It’s Definitely Not Different This Time / Interest-Rates / US Interest Rates
By: Michael_Pento
An inverted yield curve occurs when the yield on shorter-dated securities is above that on longer-term bonds; and it has predicted all nine U.S. recessions since 1955, according to Bloomberg. Of course, now that the yield curve is the flattest since 2007—with the 2-10 spread falling to just 45 basis points, from 260bps in 2014--right on cue the carnival barkers on Wall Street have been deployed in full force claiming this key financial barometer is now broken.
Friday, May 18, 2018
Flattening Yield Curve is Good / Interest-Rates / US Interest Rates
By: Axel_Merk
In recent months, pundits have cautioned about a flattening yield curve, suggesting it may signal the end of the economic expansion, the end of the bull market, possibly even the end of the world as we know it. There's plenty to worry about in the markets, but in the spirit that knowledge is the enemy of ignorance, let's clear up some myths.
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Monday, April 30, 2018
US Bond Market 10-Year Yield: From A 35-Year Bear To A Generational Bull Market / Interest-Rates / US Bonds
By: Mike_Paulenoff
In early March, 10-year yield was circling 2.87%. Now it is circling 3.00% for the first time in 4 years. The increase is probably shocking to many analysts and investors. Neither economic nor inflation data provide adequate justification for yield to be higher than it was two months ago. But there are times when the contradicting longer-term technical set-up should be heeded, even when the trend lacks strong support from lagging tabular data.
Monday, April 30, 2018
A Contrarian Take on the Great Yield Curve Scare / Interest-Rates / US Interest Rates
By: F_F_Wiley
Media coverage of most business-cycle indicators waxes and wanes with changes in the economy, but so far in 2018, the yield curve indicator is all wax. It seems like everyone has something to say about the yield curve slope, and many commentators are jumping from a flatter curve to a growing risk of recession.
Even central bankers have joined in, with a recent article from the San Francisco Fed declaring that “the term spread is by far the most reliable predictor of recessions.”
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Monday, April 23, 2018
Fox in the Henhouse: Why Interest Rates Are Rising / Interest-Rates / US Interest Rates
By: Ellen_Brown
The Federal Reserve calls itself independent, but it is independent only of government. It marches to the drums of the banks that are its private owners. To prevent another Great Recession or Great Depression, Congress needs to amend the Federal Reserve Act, nationalize the Fed and turn it into a public utility, one that is responsive to the needs of the public and the economy.
On March 31 the Federal Reserve raised its benchmark interest rate for the sixth time in three years and signaled its intention to raise rates twice more in 2018, aiming for a Fed funds target of 3.5 percent by 2020. LIBOR (the London Interbank Offered Rate) has risen even faster than the Fed funds rate, up to 2.3 percent from just 0.3 percent 2 1/2 years ago. LIBOR is set in London by private agreement of the biggest banks, and the interest on $3.5 trillion globally is linked to it, including $1.2 trillion in consumer mortgages.
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Tuesday, April 17, 2018
Why the Fed is Worse for the Market than Trade Tariffs / Interest-Rates / US Federal Reserve Bank
By: Rodney_Johnson
“Always tell the truth.”In addition to being number eight on the Top 10 list of things we should always do, being truthful is just a great way to avoid trouble in life.
You never have to remember what lie you told to whom, and you never have to make up more lies to cover those you’ve already put out into the universe.
But we don’t.
I don’t know a single person who is completely honest. And this goes way beyond, “Do these clothes make me look fat?”
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Monday, April 16, 2018
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm / Interest-Rates / Financial Crisis 2018
By: Michael_Pento
LIBOR, or the London Interbank Offered Rate, was the most important acronym most investors never heard of before 2008. However, it quickly became the most critical variable in markets leading up to the Great Recession.
What has now become clear is that we haven’t learned any lessons from the financial crisis except how to accumulate more debt and to artificially control markets more extensively. And, to conveniently try to sweep under the rug the very same warning signs that forebode the day of reckoning just over a decade ago.
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Monday, April 09, 2018
Average Two-year Fixed Mortgage Interest Rate at 19 Month High / Interest-Rates / Mortgages
By: MoneyFacts
Moneyfacts UK Mortgage Trends Treasury Report data (not yet published) reveals that the average two-year fixed rate mortgage has increased for the second month in a row, to reach the highest point seen since September 2016.
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Monday, April 09, 2018
A Handy Guide to Congressional Budget Office CBO Report / Interest-Rates / US Debt
By: F_F_Wiley
Tomorrow we’ll get the Congressional Budget Office’s first look at the budgetary consequences of Donald Trump.
That is, the CBO will release its 10-year budget outlook, which was delayed by a few months to allow enough time to assess recent legislation.
Expect the media to respond in a variety of ways, including matter-of-fact reporting and editorials slamming Trump and the GOP for fiscal profligacy. But whatever the perspective, most responses will have one thing in common—they’ll accept the CBO’s figures as being accurate and authoritative.
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Friday, April 06, 2018
Why Are Markets Going Bonkers? Central Bankers Tried to Corner the Bond Market / Interest-Rates / US Bonds
By: Graham_Summers
The big questions being tossed around Wall Street today are: why are markets such a mess? Why are we getting these wild swings?
The reality is that the markets are NOT a mess. These are actually normal healthy markets. Healthy markets move, sometimes a lot in a small span of time.
The real issue is that from ’09 until recently, the market was completely artificial because Central Banks cornered ALL risk by cornering the sovereign bond market.
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Thursday, March 29, 2018
Uncle Sam Issuing $300 Billion In New Debt This Week Alone / Interest-Rates / US Debt
By: GoldCore
– US needs to borrow almost $300 billion this week alone
– This is the largest debt issuance since 2008 financial crisis
– Trump threatens trade war with its biggest creditor – China
– Bond auctions have seen weak demand due to large supply and trade war concerns
– $20 trillion mark reached in early September 2017; $1 trillion added in just 6 months
– US total national debt level now exceeds $21.05 trillion and is accelerating higher
– U.S. debt and dollar crisis coming which will propel gold higher (see chart)
Wednesday, March 28, 2018
Eurozone Faces Many Threats Including Trade Wars and “Eurozone Time-Bomb” In Italy / Interest-Rates / Eurozone Debt Crisis
By: GoldCore
– Eurozone threatened by trade wars, Italy and major political and economic instability
– Trade war holds a clear and present danger to stability and economic prospects
– Italy represents major source of potential disruption for the currency union
– Financial markets fail to reflect the “eurozone time-bomb” in Italy
– Financial volatility concerns in Brussels & warning of ‘sharp correction’ on horizon
– Euro and global currency debasement and bank bail-in risks
Wednesday, March 28, 2018
New Research Foretells QE Domination / Interest-Rates / Quantitative Easing
By: F_F_Wiley
The title refers to a consensus-shattering paper that was unveiled at the University of Chicago last month before a Who’s Who of economists and central bankers.
Paul Krugman gave the keynote, but the meeting’s focus was on the paper’s authors—two Wall Street big shots, Morgan Stanley’s David Greenlaw and Bank of America Merrill Lynch’s Ethan Harris, and two academics, James Hamilton and Kenneth West. To keep it simple, I’ll call them GHHW.
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Tuesday, March 27, 2018
The Federal Reserve – Purpose And Motivation / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
With each succeeding day, obsession with the Federal Reserve continues. And the obsession is a good indicator of just how misinformed most of us are.
This is true with respect to various policies, statements, and actions; and includes comments made by board members, either in speeches or interviews. But it is also true regarding purpose and motivation.
To a large extent, it is a matter of perception. Some, maybe most, people see the Fed as the lead driver. There is an assumed aura of authority and control. On all matters economic, we look to them for direction. But where are they taking us?
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Wednesday, March 21, 2018
Chaos is the Only Way Out of Interest Rates Normalisation / Interest-Rates / US Interest Rates
By: Michael_Pento
The prevailing fiction pervading Wall Street right now is that economic growth is picking up in a sustainable fashion and that interest rates will merely rise slowly. Then, soon level off at historically low levels. In other words, they are selling a fairytale; and a dangerous one at that.
This premise is blatantly false. The Fed’s reverse QE program, Government debt levels and Nominal Gross Domestic Product, all dictate that the 10-year Note Yield should be now swiftly on its way to at least 4.5%, from the artificial level of 1.4% found in July of 2016.
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Wednesday, March 21, 2018
Credit Concerns In U.S. Growing As LIBOR OIS Surges to 2009 High / Interest-Rates / Financial Crisis 2018
By: GoldCore
Key Metric LIBOR OIS Signals Major Credit Concerns
– Widening of the spread between LIBOR OIS (overnight index swap) rate raises concerns
– Spread jumped to 9 year widest spread, rising to 54.6bps, most since May 2009.
– Libor recently moved to over 2% for first time since 2008
– Wider spread usually associated with heightened credit concerns
Monday, March 19, 2018
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt / Interest-Rates / US Debt
By: Dan_Amerman
"Compound interest is the eighth wonder of the world." Albert Einstein
"My wealth has come from a combination of living in America, some lucky genes, and compound interest." Warren Buffett
Compound interest is an extraordinarily powerful financial tool, and reinvesting the cash flows received from investments has historically been the single most reliable way of building wealth over the long term.
For many people, understanding the power of compound interest is the very heart of financial literacy. Compound interest is the reason why people are urged to begin investing for retirement in their 20s and 30s, because having an extra decade or two for interest earnings on interest earnings to work their magic creates a wealth building machine, and far larger savings than would be amassed by someone starting in their 40s or 50s.
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Sunday, March 18, 2018
How to Legally Manipulate Interest Rates / Interest-Rates / Market Manipulation
By: Science_Investing
Rationale Behind Quantitative Easing
The Fed embarked on asset purchases, which they call quantitative easing or QE, during the global financial crisis 2007-2008. The move was motivated by a complete loss of confidence in the financial system. As a result, investors and financial institutions feared losses due to large scale bankruptcies. Liquidity dried up completely and money was hoarded in allegedly safe places. The Fed stepped in with various measures and effectively returned confidence to markets. Quantitative Easing was among these whilst it was applied for the first time in US monetary history.
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Saturday, March 17, 2018
The Bank of Japan bought 75% of JGBs in FY17… and Yields Are Still Up / Interest-Rates / Japanese Interest Rates
By: Graham_Summers
The insanity of Central Bankers knows no bounds.
The latest indication of just how far “down the rabbit hole” the financial world has gone comes from Japan where it was announced that the Bank of Japan bought 75% of Japanese Government Debt issuance in FY17.
That is not a typo. Japan’s Central Bank bought $3 out of every $4 in debt Japan issued in fiscal year 2017. And it now owns 40% of Japan’s total debt outstanding.
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Tuesday, March 13, 2018
The Bond Market is SCREAMING Inflation, But Stock Investors are Clueless / Interest-Rates / US Bonds
By: Graham_Summers
Inflation is now reaching a crescendo.
The fact is that inflation develops in stages in the economy. The first stage concerns the price of items being bought and sold by wholesalers. We saw this begin to surge starting in the middle of last year. And it was a global phenomenon.
Paying more for something is manageable for a while. However, at some point the increase in prices is passed on into the economy in the form of more expensive goods and services. This is when inflation truly begins to become a problem.
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Tuesday, March 13, 2018
Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story" / Interest-Rates / US Interest Rates
By: MoneyMetals
Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world and it's always great to have him on with us.
Mr. Celente, thanks again for the time today and welcome back.
Gerald Celente: Oh, it's always great being on. Thank you.
Mike Gleason: Well, Gerald, it's never a dull moment in Washington, D.C., these days. President Trump always keeps it lively. We have the never-ending Russia controversy, of course, the war of words with North Korea, and the intervention in Syria have both been regulars in the headlines over the past year. Now Trump is talking about tariffs and people are worried about a trade war. Volatility is coming back to the stock markets and some investors are getting nervous about rising interest rates. When it comes to Russia interfering in U.S. elections, it seems more or less like a smoke screen. We have very little doubt there is plenty of collusion and a fair bit of it involved Hillary shepherding the Uranium One deal over the finish line.
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Tuesday, March 13, 2018
US Interest Rate Tsunami Waves Spotted Just Offshore / Interest-Rates / US Interest Rates
By: Michael_Pento
We should all be familiar with the aphorism, “as real estate goes so goes the economy.” Anyone ignoring that economic axiom was completely blindsided by the Great Recession of 2008. Well, the collapse of the Everything Bubble most certainly includes the real estate market…and this time around will definitely not be different.
The plain and simple fact is that home ownership is getting further out of reach for the average consumer as mortgage rates rise. This is especially true for the first-time home buyer. The 30-year fixed rate mortgage is now the highest level since January 2014, 4.64%
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Friday, March 09, 2018
US Bond Market 3 Amigos Bottom Line / Interest-Rates / US Bonds
By: Gary_Tanashian
You thought I was done with the Amigos shtick, did you? Not by a long shot ma’am. They are the happy-go-lucky riders in play as the stock bull market churns on. They are the rising SPX/Gold ratio and stocks in general vs. gold (Amigo #1), rising US 10yr & 30yr yields (Amigo #2) and the flattening 10-2 yield curve (Amigo #3). On their current trends these goofy riders have signaled “a-okay!” to casino patrons playing the stock market and other risk ‘on’ items.
Taking our macro indicators out of order, let’s start with Amigo #2, who we have been noting to be bracing for something…
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Thursday, March 01, 2018
US Interest Rates - Should You "Fret" Over the New Fed Chair's Possible Actions? / Interest-Rates / US Interest Rates
By: EWI
Learn what really governs the trend of interest rates
Is new Fed Chair Jerome Powell a hawk -- meaning, will he aggressively raise rates to curb inflation?
That's what investors are asking as Powell makes his first appearance before Congress in his new role. The belief that Powell will be hawkish has already rattled markets, according to some observers (Reuters, Feb. 23):
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Thursday, March 01, 2018
The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases / Interest-Rates / US Debt
By: Dan_Amerman
The United States national debt is currently about $20 trillion, and the federal government is paying some of the lowest interest rates in history on that debt. The Federal Reserve has raised interest rates five times now, and is publicly considering another seven increases between 2018 and 2020, for a total increase of 3%.
What will be the impact on the national debt and deficits if the interest payments on the debt jump upwards because of the actions of the Fed?
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Tuesday, February 27, 2018
Stocks? Who Cares? You Should Worry about Something Else, Bonds! / Interest-Rates / US Bonds
By: Arkadiusz_Sieron
Investors are still worried about the stock market. It’s quite understandable, given the recent correction, but it draws their attention away from the really important developments. Let’s analyze the hidden threats and consider how they could affect the gold prices.
It’s Bonds, Stupid!
Let’s establish one thing at the beginning. The bond market is more important than the stock market. First, it’s significantly bigger. The global bond market exceeds $100 trillion, while the global stock market is higher than $70 trillion. Point for bonds.
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Monday, February 26, 2018
Bonds and Related Financial Market Indicators / Interest-Rates / International Bond Market
By: Gary_Tanashian
The following is an excerpt from this week’s edition of Notes From the Rabbit Hole, NFTRH 488. For NFTRH bonds are not just an asset class ‘throw-in’ but instead are a key indicator set to the entire modern macro. Insofar as it may be time to use them for portfolio balance (I am currently long SHV, SHY, IEI & IEF), so much the better. Many could not wait to buy bonds during US ZIRP global NIRP operations, but today they pay better interest and have a contrarian edge with the entire herd bracing for a bear market.
We claimed appropriately bearish on bonds on December 4th, so you know this is not perma-book talking when we go the other way as yields hit our targets.
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Thursday, February 22, 2018
The Latest US Debt Blow / Interest-Rates / US Debt
By: Rodney_Johnson
Count me among the worriers that thought our debt was a problem at $10 trillion… and then at $15 trillion.I was wrong.
Or, at least, those levels didn’t seem to phase investors, who kept putting down their cold, hard cash to buy U.S. Treasury bonds.
As I shook my head over the past several years, we continued our profligate ways, and now our national debt stands at a whopping $20.5 trillion, slightly more than our annual GDP.
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Tuesday, February 20, 2018
4% US 10-year Treasury Note Yield Will Be a Floor Not a Ceiling / Interest-Rates / US Bonds
By: Michael_Pento
The two most important factors in determining the level of sovereign bond yields are the credit and inflation risks extant within a nation. When determining a country’s ability to service its debt investors must analyze not only the absolute debt level, but also the ratios of debt and deficits to GDP. In addition, the current rate of inflation must also be viewed within the context of debt in order to make an accurate assumption as to the level of future inflation.
When analyzing historical measures of these criteria, the conclusion reached is that the U.S. 10-year Note yield should rise to at least four percent in the coming quarters.
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Wednesday, February 14, 2018
Global Debt Crisis II Cometh / Interest-Rates / Global Debt Crisis 2018
By: GoldCore
– Global debt ‘area of weakness’ and could ‘induce financial panic’ – King warns
– Global debt to GDP now 40 per cent higher than it was a decade ago – BIS warn
– Global non-financial corporate debt grew by 15% to 96% of GDP in the past six years
– US mortgage rates hit highest level since May 2014
– US student loans near $1.4 trillion, 40% expected to default in next 5 years
– UK consumer debt hit £200b, highest level in 30 years, 25% of households behind on repayments
Monday, February 12, 2018
Reckless Deficit Spending by Congress Set to Wreck the Dollar / Interest-Rates / US Debt
By: MoneyMetals
U.S. equities got a free ride on the Trump train after his election, even as Federal Reserve officials hiked interest rates. That ride may have ended last week.
If commentators are correct and the blame for recent selling in the stock market falls on the burgeoning fear of rising interest rates, it looks like Fed tightening is finally having the effect many predicted when the cycle began.
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Sunday, February 11, 2018
The Fed’s Impossible Choice, In Three Charts / Interest-Rates / US Interest Rates
By: John_Rubino
Critics of “New Age” monetary policy have been predicting that central banks would eventually run out of ways to trick people into borrowing money. There are at least three reasons to wonder if that time has finally come:
Wage inflation is accelerating
Normally, towards the end of a cycle companies have trouble finding enough workers to keep up with their rising sales. So they start paying new hires more generously. This ignites “wage inflation,” which is one of the signals central banks use to decide when to start raising interest rates. The following chart shows a big jump in wages in the second half of 2017. And that’s before all those $1,000 bonuses that companies have lately been handing out in response to lower corporate taxes. So it’s a safe bet that wage inflation will accelerate during the first half of 2018.
Wednesday, February 07, 2018
Is The 37 Year Bullish US Treasury Bond Market Ending? / Interest-Rates / US Bonds
By: ElliottWave-Forecast
The bond market has enjoyed a strong bull market for nearly four decades with yields continuing to go lower. The bull market has been going on for so long that no current active fund manager can imagine what it looks like when interest rates were to be like the 1980s at 20%. If people in the 1980s started trading in their early thirties, they would have been almost 70 years old by now, so chances are they are not active in the market anymore.
Monday, February 05, 2018
Global Synchronized US Bond Collapse / Interest-Rates / US Bonds
By: Michael_Pento
We have all heard, in ad nauseam fashion, Wall Street’s current favorite mantra touting a global synchronized economic recovery. For the record, global GDP growth for 2017 was 3.7%, according to the International Monetary Fund. And, although this is an improvement from recent years, you must take into account that in 2004 it was 4.4%, in 2005 it was 3.8%, in 2006 it was 4.3%, and in 2007 it was 4.2%. The Point being, it’s not as if the current rate of global growth has climbed to a level never before witnessed in history—it’s not even close.
However, the more salient phenomenon now underway—far more important than the rather pedestrian move higher in global GDP--is the globally synchronized bond collapse, which the Main Stream Financial Media is dismissing with alacrity. Yields are on the move higher around the world and the rate of change is now escalating.
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Sunday, February 04, 2018
10yr Yield Nears Target, ‘Inflation Trade’ Failing, Gold Sector Shaking Off Inflation Bugs / Interest-Rates / US Bonds
By: Gary_Tanashian
Over and over again I’ve been making goofy headlines about the Amigos, the 3 macro riders who will reach (or abort) their respective destinations, at which point the macro is subject to change. The latest update was yesterday with a daily chart view.
Just look at them, the SPX vs. Gold Amigo, the 10yr & 30yr Yield Amigo and the Yield Curve Amigo. So happy-go-lucky while they ride. But #2, the one in the middle, looks like he’s bracing for something.
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Thursday, February 01, 2018
Will the Threat of a Bear Market in Bonds Finally Get Stocks Attention? / Interest-Rates / US Bonds
By: Graham_Summers
The single most important bond in the world is the US 10-Year Treasury bond.
According to modern financial theory, this bond, with a duration that is meant to cover a full economic cycle, is generally considered the “risk free” rate of the return for the entire financial system.
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Thursday, February 01, 2018
US Treasury Yields Inflating? / Interest-Rates / US Bonds
By: Submissions
FundamentalsThe Herd is running into one direction. It is from bonds into stocks. The latest BAML Fund Manager report showed an intresting picture. Extreme flows have been recorded over the past couple of months relative to the past 12 years. That came on top of the fact that flows were at elevated levels throughout the past 14 months already.
The investment reasoning behind that gets confirmed by economic fundamentals. The US economy is expanding, retail sales have risen to all-time highs, unemployment is at a multidecade low, and new home sales look as good as they have never looked for the past 10 years.
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Wednesday, January 31, 2018
The Most Important Bond In the World Just Broke a 25 Year Downtrend / Interest-Rates / US Bonds
By: Graham_Summers
The single most important bond in the world is the US 10-Year Treasury bond.
According to modern financial theory, this bond, with a duration that is meant to cover a full economic cycle, is generally considered the “risk free” rate of the return for the entire financial system.
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Tuesday, January 30, 2018
US Treasury Bonds: Fuse to Light the Bonfire / Interest-Rates / US Bonds
By: Jim_Willie_CB
Many are the metaphors used to describe the agent that initiates a major crisis. Light the fuse, or pull the trigger, pull the rug out from under the room, or pull on the string for unraveling the sweater, these are commonly heard. What comes soon is the Bonfire of the Vanities, a term the Jackass prefers since irony is thick. Hardly the burning of objects deemed as tempting toward occasions of sin as in the 15th Century. In the present-day case, the burning would be of the massive piles of paper assets the US Federal Reserve has been illicitly supporting for the past several years. The bonfire would be of falsely valued heaps of paper. If truth be known, the Quantitative Easing was put in place in 2012 when the big US banks were all in danger of failures. They required amplified liquidity infusions in order to prevent these giant silos of insolvency from entering financial failure. Their huge bond holdings were supported. Generally, when insolvency meets illiquidity, big failures occur. The USGovt and USFed colluded to prevent the entire set of Wall Street banks from failing like Lehman Brothers did. They all had the same ugly insolvent traits. Few tell the story correctly, but Goldman Sachs and JPMorgan suffocated Lehman to death. Lehman did not fail without help. Like Chief Justice Scalia, Lehman was suffocated in a bed of unpaid bond sales. What comes next is a nasty corrosive dangerous sequence of financial market crises, where pumped paper assets suffer notable declines. It will include the stock, bond, and currency markets. The last times all three suffered simultaneous declines was 1979 and 1987. Add soon 2018.
Tuesday, January 30, 2018
Illinois’ Debt Crisis Foreshadows America’s Financial Future / Interest-Rates / US Debt
By: MoneyMetals
Those wanting a glimpse into the future of our federal government’s finances should have a gander at Illinois. The state recently “resolved” a high-profile battle over its budget. Taxpayers were clubbed with a 32% hike in income taxes in an effort to shore up massive underfunding in public employee pensions, among other deficiencies.
But, predictably, it isn’t working. People are leaving the state in droves.
In fact, Illinois now leads the nation in population collapse. Statistics show people leaving the state at the rate of 1 every 4.3 minutes and the state dropped from 5th place to 6th in terms of overall population.
Read full article... Read full article...
Tuesday, January 23, 2018
Government Shutdown Ends – Markets Ignore Looming Debt and Bond Market Threat / Interest-Rates / US Debt
By: GoldCore
– U.S. Senate pass a temporary spending plan through Feb. 8 to end shutdown
– Markets shrug off both government shutdown and re-opening
– Markets, government and media ignoring worsening US debt position
– Gold responding positively to U.S. dysfunction, rising US Treasury yields & weaker dollar
– U.S. government national debt is $20.6 trillion and increasing rapidly
– ‘Bonds, like men, are in a bear market’ – Bill Gross
Sunday, January 14, 2018
Did China Just Burst the Everything Bubble? / Interest-Rates / US Bonds
By: Graham_Summers
The biggest news today comes from China, which has announced it will “slow or halt” US Treasury purchases.
This is the so-called NUCLEAR option: the threat by China to stop buying US debt. And it’s an absolute game-changer.
Read full article... Read full article...
Sunday, January 14, 2018
Bubble Watch: Both the Currency Markets and Bonds Markets See Inflation Coming / Interest-Rates / US Bonds
By: Graham_Summers
If you want to make money investing, you first need to understand the structure of the asset classes in our current financial system,
Everyone likes to go bonkers over stocks, but the reality is that the stock market is in fact one of the smallest and least liquid markets on the planet. All told, US stocks are roughly $26 trillion in market cap.
Read full article... Read full article...
Wednesday, January 10, 2018
TMV : 3X Leveraged Short on US Treasury Bonds / Interest-Rates / US Bonds
By: Rambus_Chartology
TMV is a 3 X short the TLT 20 year treasure bond etf. This trade is based on the TLT. For well over three years now the TLT has been building out what looks like a massive H&S top with the top of the right shoulder now in play. I’m going to take an initial position and buy 250 shares of TMV, 3 X short the TLT, and buy 250 shares at the market at 18.83 with the sell/stop on a daily close below the right shoulder low on the daily chart for the TMV at 17.35. I’m anticipating the the right shoulder high on the TLT will be the ultimate high. There will be several more entry points if this trades starts to workout.
Tuesday, January 09, 2018
US Interest Rates Walking on Narrow Ledge / Interest-Rates / US Interest Rates
By: Michael_Pento
There is a huge shock in store for those who have been lulled to sleep by a stock market that has become accustomed to no volatility and only an upward direction. And that alarm bell can be found in the price action of Bitcoin, which recently tumbled over 40% is less than a week. For the implosion within the cryptocurrency world foreshadows what will happen with the major averages as the Federal Reserve futilely attempts to stop monetizing the exploding mountain of U.S. debt.
Monday, January 08, 2018
UK Base Interest Rate Rise Aftermath Sees Mortgage Competition Slow / Interest-Rates / UK Interest Rates
By: MoneyFacts
Moneyfacts UK Mortgage Trends Treasury Report data (not yet published) reveals a sharp slowdown in mortgage competition, just two short months after the Bank of England increased the base rate.
Read full article... Read full article...
Friday, January 05, 2018
European Bonds Are 2018’s Number One Risk / Interest-Rates / International Bond Market
By: John_Mauldin
BY JARED DILLIAN : No shortage of stupid things these days:
- Bitcoin
- Litecoin
- Pizzacoin
- Canadian real estate
- Swedish real estate
- Australian real estate
- FANG
- Venture capital
Thursday, December 21, 2017
If You Want To Get Rich, Invest In T-Bills, Not FANGs Or Bitcoin / Interest-Rates / US Bonds
By: John_Mauldin
BY JARED DILLIAN : Demand curves are usually downward-sloping. That’s because people will buy more of a product when it is cheaper and less of it when it is more expensive.
Some things—like stocks and especially bitcoin—have upward-sloping demand curves, which should be theoretically impossible. But they happen in the real world. People really want bitcoin when it is expensive, but nobody was interested when it was cheap.
Read full article... Read full article...
Friday, December 15, 2017
Trends in the U.S. Unemployment rate and the U.S. Yield curve / Interest-Rates / US Interest Rates
By: Donald_W_Dony
The trends in both the U.S. Unemployment rate and the U.S. Yield curve are linked to similar economic pressures.
The Unemployment rate rises and falls due to a number of key reasons and reflects the changes in the economy.
The U.S. Yield curve acts as a tool for the Fed to conduct its monetary policy in its goal for the long-term health (ie stable prices and sustainable employment) of the economy.
Read full article... Read full article...
Tuesday, December 12, 2017
Which Central Bank Will Go Under First When the Everything Bubble Bursts? / Interest-Rates / Central Banks
By: Graham_Summers
In the aftermath of the Great Financial Crisis, Central Banks began cornering the sovereign bond market via Zero or even Negative interest rates and Quantitative Easing (QE) programs.
The goal here was to reflate the financial system by pushing the “risk free rate” to extraordinary lows. By doing this, Central Bankers were hoping to:
Read full article... Read full article...
Tuesday, December 12, 2017
A Former Wall Street Veteran: Good Traders Are Born, Not Trained / Interest-Rates / Learn to Trade
By: John_Mauldin
BY JARED DILLIAN : Some people are better with money than others. Is it nature or nurture?
What I mean is: Can investing be taught, or does it come naturally?
I’m going to make a very controversial statement. Financial acumen is almost entirely nature. You are born with it.
Read full article... Read full article...
Monday, December 11, 2017
Soaring Deficits Force US Treasury into Foolish Debt Gamble / Interest-Rates / US Debt
By: Michael_Pento
The Treasury opened the fiscal year 2018 with an October budget deficit of $63.2 billion. That is 37.9% larger than the $45.8 billion deficit in October of last year. The primary reason behind this surge in year-over-year deficits was a 21.6% increase in net interest expenses. The annual red-ink problem looks even greater when recognizing that the national debt is already over 105% of Gross Domestic Product (GDP), at nearly $21 trillion, and with an additional $10 trillion projected to be added in the next ten years.
Saturday, December 09, 2017
Jerome Powell vs. Janet Yellen / Interest-Rates / US Federal Reserve Bank
By: Arkadiusz_Sieron
As expected, Donald Trump nominated Jerome Powell as the next Federal Reserve Chair. He is often perceived as a merely Republican version of Yellen. But is that really the case? Let’s analyze in a more detailed way what impact on gold Powell’s term as the head of the U.S. central bank would mean for the gold market.
Tuesday, December 05, 2017
Central Banks Won’t See Our Sympathy / Interest-Rates / Central Banks
By: Rodney_Johnson
It’s official. Lending institutions are having a tough time making loans.Don’t get me wrong, they still make money the old fashioned way: by borrowing from us through deposits on which they pay almost no interest, and then lending it long term to anyone that qualifies. But they’ve had to jack up their other fees because the traditional business plan just isn’t cutting it.
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Tuesday, November 28, 2017
The $76 Trillion Bond Market Is Forecasting Inflation. Are You Ready? / Interest-Rates / Inflation
By: Graham_Summers
This year, (2017) was the year that the financial system moved from fearing deflation to expecting inflation.
You can see this in the breakout in inflation expectations. From 2013 until mid-2016, the financial system’s expectations of future inflation were in a downtrend. Mid-2016 this changed as expectations began to rise, breaking this downtrend in early 2017.
Read full article... Read full article...
Tuesday, November 28, 2017
The Fed Is at the Height of Monetary Policy Lunacy / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
How often do central bankers, regulators, corporate leaders, lawyers, politicians, and ordinary investors make the same mistakes over and over again? All the time.
If we stopped erasing our memories and for once learned from our mistakes, we might make better progress. But no, we must always step on the same rake.
Read full article... Read full article...
Wednesday, November 22, 2017
New Fed Chairman, Same Old Story / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
President Trump nominated Jerome H. Powell as the new Chairman of the Federal Reserve Bank. Don’t look for much to change. And Janet Yellen’s announcement that she will resign from the board upon Mr. Powell’s induction as board chair is pretty much a non-event.
Where we are today is the culmination of decades of irresponsible financial/fiscal policies and a complete abdication of fundamental economics. But that should not be a surprise. The self-proclaimed purpose of the Federal Reserve Bank is to manage the economic cycles. This is an impossibly presumptive task and a violation of fundamental economic theory.
Read full article... Read full article...
Tuesday, November 21, 2017
US Bond Market Operation Twist by Another Name and Method? / Interest-Rates / US Bonds
By: Gary_Tanashian
The TIP/IEF ‘inflation gauge’ is still motoring upward after breaking above the SMA 200. If this turns the 200 up along with the MA 50 it could indicate a mini hysteria about inflation.
Monday, November 20, 2017
Soaring Deficits Force US Treasury into Foolish Debt Gamble / Interest-Rates / US Debt
By: Michael_Pento
The Treasury opened the fiscal year 2018 with an October budget deficit of $63.2 billion. That is 37.9% larger than the $45.8 billion deficit in October of last year. The primary reason behind this surge in year-over-year deficits was a 21.6% increase in net interest expenses. The annual red-ink problem looks even greater when recognizing that the national debt is already over 105% of Gross Domestic Product (GDP), at nearly $21 trillion, and with an additional $10 trillion projected to be added in the next ten years.
Read full article... Read full article...
Sunday, November 19, 2017
Next-Generation Crazy: The Fed Plans For The Coming Recession / Interest-Rates / Recession 2018
By: John_Rubino
Insanity, like criminality, usually starts small and expands with time. In the Fed’s case, the process began in the 1990s with a series of (in retrospect) relatively minor problems running from Mexico’s currency crisis thorough Russia’s bond default, the Asian Contagion financial crisis, the Long Term Capital Management collapse and finally the Y2K computer bug.
Read full article... Read full article...
Friday, November 17, 2017
The Fed Isn’t “Confused” About Inflation… It WANTS You In the Dark! / Interest-Rates / Inflation
By: Graham_Summers
The Fed claims it’s “confused” as to why inflation remains so low.
The Fed isn’t confused at all. It intentionally measures inflation in ridiculous ways to guarantee that the “official number” remains nowhere near reality.
On top of this, we have factual evidence that Fed is in fact well aware that inflation is clocking in well above its 2% “target.”
Read full article... Read full article...
Thursday, November 09, 2017
Prepare For Interest Rate Rises And Global Debt Bubble Collapse / Interest-Rates / Global Debt Crisis 2017
By: GoldCore
– Diversify, rebalance investments and prepare for interest rate rises
– UK launches inquiry into household finances as £200bn debt pile looms
– Centuries of data forewarn of rapid reversal from ultra low interest rates
– 700-year average real interest rate is 4.78% (must see chart)
– Massive global debt bubble – over $217 trillion (see table)
– Global debt levels are building up to a gigantic tidal wave
– Move to safe haven higher ground from coming tidal wave
Wednesday, November 08, 2017
If This Bond Market Line Breaks, We’re in Serious Trouble / Interest-Rates / US Bonds
By: Graham_Summers
Let’s talk about Junk Bonds.
Junk Bonds are corporate debt issued by companies that have a significant chance of defaulting (meaning they don’t pay you back).
Why would anyone want to lend these companies money?
Because these bonds are risky, they typically pay very large yields to compensate for the increased risk. Think yields of 8% or even 10%.
Read full article... Read full article...
Wednesday, November 08, 2017
Here’s Why The Market Mispriced Jay Powell / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY JARED DILLIAN : Jay Powell has been named the next Chairman of the Federal Reserve. Provided he survives the confirmation process, it is a done deal.
This wasn’t the easiest pick for Trump. It’s not easy to find a Republican who is also in favor of low interest rates. Powell isn’t exactly a dove, but he’s significantly more dovish than John Taylor.
Read full article... Read full article...
Thursday, November 02, 2017
Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England with much forewarning hiked UK interest rates by 100% today, raising the base interest rate from 0.25% to 0.5%. However, before everyone starts to panic that this heralds the start towards of rates rising to pre 2008 levels, instead the reality is that all that the Bank of England has done is to reverse the PANIC BREXIT INTEREST RATE CUT of August 2016. Which had seen the Bank of England cut interest rates to there lowest levels in the Bank of England's 320 year history. Which followed over 7 years of rates being held at 0.5% the duration of which had seen virtually ALL economists reveal the true extent of their ineptitude as they had collectively consistently forecast that UK Interest rates were always just about to head higher, that a a series of rate hikes were always just months away, which not only never materialised but culminated in the reality of a RATE CUT last year!
Thursday, November 02, 2017
Who Will Be the Next Fed Chief - And Why It Matters / Interest-Rates / US Federal Reserve Bank
By: Dan_Steinbock
Janet Yellen's term is ending at the Federal Reserve. With new appointments, President Trump can indirectly shape US monetary policy for years to come - for better or worse. Serving as the “epitome of calm,” Fed chief Ben Bernanke responded to the global financial crisis by cutting the federal funds rate to zero and initiating rounds of quantitative easing (QE) soon thereafter.
Read full article... Read full article...
Thursday, November 02, 2017
Government Finances and Gold - Cautionary Tale told in Four Charts / Interest-Rates / US Debt
By: Michael_J_Kosares
“President Trump, in complete contradiction to candidate Trump, has praised Yellen for being a ‘low-interest-rate-person.’ One reason Trump may have changed his position is that, like most first-term presidents, he thinks low interest rates will help him win reelection. Trump may also realize that his welfare and warfare spending plans require an accommodative Fed to monetize the federal debt. The truth is President Trump’s embrace of status quo monetary policy could prove fatal to both his presidency and the American economy.” – Ron Paul, Institute for Peace and Prosperity
Editor’s note: This issue of our newsletter features several interactive, live charts offered in conjunction with the St. Louis Federal Reserve and the ICE Benchmark Administration/LBMA. You can access statistical details by moving your cursor over the charts. If the chart does not automatically update, please move the toggle button on the year bar all the way to the right. We invite you to bookmark this edition for future reference.
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Wednesday, November 01, 2017
QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate / Interest-Rates / Quantitative Easing
By: F_F_Wiley
We’ve produced some research over the years that we’d love to see the powers-that-be react to, but none more so than our look at financial flows during the QE programs.
By netting all lending by banks and broker-dealers and then comparing it to the Fed’s lending, we stumbled upon a chart that seemed to show exactly what QE does or doesn’t do. But “doesn’t,” not “does,” was the story, and it couldn’t have been clearer. Or shown a more stimulating pattern. To geeks like us, our Excel click on “Insert, Line” was like stepping from a shady trail to a sunny vista.
Read full article... Read full article...
Tuesday, October 31, 2017
US Debt Revelation Numbers / Interest-Rates / US Debt
By: Michael_Pento
The federal budget deficit widened in the fiscal year 2017 to the sixth highest on record, creating a budget shortfall of $666 billion. That is up $80 billion, or 14%, from the fiscal year 2016. The overspend resulted primarily from an increase in spending for Social Security, Medicare, and Medicaid, as well as higher interest payments on the debt due to rising rates that drove up outlays to $4 trillion, which was 3% higher than the previous fiscal year.Read full article... Read full article...
Saturday, October 28, 2017
Markets Big Macro Play Ahead / Interest-Rates / US Interest Rates
By: Gary_Tanashian
At NFTRH, we are about major macro turning points above all else. Of course, it is often years between these turning points or points of significant change so we are also about the here and now, and managing the trends, Old Turkey style.*
Since we are all learning all the time, I have no problem admitting to you that while right and bullish on commodities and stocks in 2009, after becoming bullish on the precious metals in Q4 2008, I completely ignored Old Turkey due to my inner biases. The result has been that after taking excellent profits from the precious metals bull, personally, I have greatly under performed the stock market bull despite holding a bullish analytical view for the majority of the post-2012 period.
Read full article... Read full article...
Wednesday, October 25, 2017
Trump May Reappoint Yellen as Fed Chair after All / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
By Clint Siegner: Candidate Donald Trump was none too kind to current Federal Reserve Chair Janet Yellen during his 2016 campaign. However, the President’s tone with regards to Yellen and Fed policy has been softening since his election.Trump met one on one with Yellen and other top contenders last week and now appears quite open to the idea of reappointing her to another four-year term.
Saturday, October 21, 2017
“Great Rotation” Ahead; Will it Be Inflationary or Deflationary? / Interest-Rates / US Bonds
By: Gary_Tanashian
[edit] This article ultimately leans toward the view that the reasons for a rising curve will be inflationary. But I woke up in the middle of the night and my thoughts drifted to the components of the article (yeah, that’s pretty sad, I know), and with further consideration I am leaning toward neutral or even a bit into the deflationary camp. The reasons will be the stuff of another article.
Think back to the blaring headlines about the Great Promotion Rotation in the financial media in 2013. Perhaps the media circus started in January of that year when The Economist asked the question of whether the rise in bond yields signaled a “flight” out bonds and into equities. It was probably an earnest and right minded question asked by The Economist, but you know our friends in the greater financial media; get a good story and flog the hell out of it to harvest eyeballs. Reality be damned, man, it’s the eyeballs that matter!
Wednesday, October 18, 2017
History Says Global Debt Levels Will Lead to Another Crisis / Interest-Rates / Global Debt Crisis 2017
By: GoldSilver
Jeff Clark : It may feel like we’ll escape a debt crisis since, well, the world hasn’t ended in spite of runaway debt levels. Some of us hard money people feel like we’re taking crazy pills; how the heck can debt be so out of control, so completely unpayable, and yet the financial system keeps chugging along as if nothing’s wrong?
Well, history has a message for us: the current calm won’t last forever, because there is a direct link between government debt levels and the number of financial crises that occur. And since global debt levels are high—the second highest level in the past 150 years—it’s not exactly a stretch to conclude that another financial crisis is coming.
Read full article... Read full article...
Tuesday, October 17, 2017
What Happens When the Fed FINALLY Reduces Its $4.5 Trillion Balance Sheet? / Interest-Rates / US Federal Reserve Bank
By: EWI
So, there we have it. Deflation has started.
The Federal Reserve announced last month that they would start to reduce their $4.5 trillion balance sheet in October, thereby starting the process we call Quantitative Tightening (QT). As expected, they are aiming to do it gently and quietly, by not reinvesting bonds as they mature, starting with sums of around $6 billion of Treasuries and $4 billion in Mortgage-Backed Securities (MBS). The scale of non-reinvestment will gradually increase. Once in full swing, the Fed's balance sheet could reduce by up to $150 billion each quarter.
Read full article... Read full article...
Monday, October 16, 2017
Who Will Be the Next Fed Chief - And Why It Matters / Interest-Rates / US Federal Reserve Bank
By: Dan_Steinbock
Janet Yellen's term is ending at the Federal Reserve. With new appointments, President Trump can indirectly shape US monetary policy for years to come - for better or worse. Serving as the “epitome of calm,” Fed chief Ben Bernanke responded to the global financial crisis by cutting the federal funds rate to zero and initiating rounds of quantitative easing (QE) soon thereafter.
Read full article... Read full article...
Sunday, October 15, 2017
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders / Interest-Rates / Global Debt Crisis 2017
By: Ellen_Brown
During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island's bond debt. He said on October 3rd:
Read full article... Read full article...You know they owe a lot of money to your friends on Wall Street. We're gonna have to wipe that out. That's gonna have to be -- you know, you can say goodbye to that. I don't know if it's Goldman Sachs but whoever it is, you can wave good-bye to that.
Friday, October 13, 2017
It Would Take A 50% Hike in Income Tax to Fund Current US Budget Deficit / Interest-Rates / US Debt
By: John_Mauldin
The projected total US debt will be $30 trillion within 10 years, using the CBO’s own numbers. But the CBO also makes the rosy assumptions that there will be no recessions and that GDP will grow at a 4% nominal rate.
Now, that’s possible; I'm inclined to haircut it a bit.
If you asked me to bet the “over/under” on the debt in 2027, I would bet the over at $35 trillion.
Read full article... Read full article...
Wednesday, October 11, 2017
The Profoundly Personal Impact Of The National Debt On Our Retirements / Interest-Rates / US Debt
By: Dan_Amerman
In this analysis we will take a look at something deeply personal – which is how the $20 trillion United States national debt may change the day-to-day quality of life for savers and retirees in the decades ahead. That is likely a somewhat unusual perspective for many savers and investors.
On the one hand, we have what are often thought of as abstract economic concepts - such as how large will the national debt be in 10 or 20 years? How will Federal Reserve actions to increase interest rates change future government deficits and debts?
On the other hand, we have something that is typically presented as being entirely different, which is individual financial planning. What are the savings and investment choices that we need to make today that will help determine what our standard of living may be in retirement 10, 20 or 30 years from now?
Read full article... Read full article...
Tuesday, October 10, 2017
Six-month Surge in One Year Fixed Interest Rates / Interest-Rates / UK Interest Rates
By: MoneyFacts
The recovery in the savings market over the past six months has caused the average one-year fixed bond rate to surpass the average return that was available on a two-year fixed bond back in April 2017, according to the latest research by moneyfacts.co.uk.
Today, the average return on a one-year fixed bond has hit 1.14%, a marked increase from April, when the average one-year bond paid less than 1%. At the same time, the average two-year bond paid 1.13%, below the one-year average of today.
Read full article... Read full article...
Monday, October 09, 2017
UK Base Rate Speculation Causes Fixed Interest Rates to Rise / Interest-Rates / UK Interest Rates
By: MoneyFacts
Moneyfacts UK Mortgage Trends Treasury Report data, not yet published, highlights that as SWAP rates have seen a steep increase due to base rate speculation, the average two-year fixed rate mortgage is also starting to rise.
Read full article... Read full article...
Friday, October 06, 2017
Stunning U.S. Government Debt Increase In Past Few Days…. While No One Noticed / Interest-Rates / US Debt
By: Steve_St_Angelo
As the stock market continues to rise on the back of some of the worst geopolitical, financial, and domestic news, the U.S. Treasury has been quietly increasing the amount of government debt, with virtually no coverage by the Mainstream or Alternative Media. So, how much has the U.S. debt increased in the past few days? A bunch.
The surge in U.S. debt that took place over the past two days all started when the debt ceiling limit was officially allowed to increase on Sept 8th. In just one day, the U.S. Treasury increased the public debt by $318 billion:
Read full article... Read full article...
Monday, October 02, 2017
The Fed Knew QE Wouldn’t Work From The Start / Interest-Rates / Quantitative Easing
By: John_Mauldin
When is a mystery not a mystery? When Janet Yellen is puzzling over a lack of inflation, that’s when. So says Brian Wesbury, chief economist, and Robert Stein, deputy chief economist of First Trust, in the following essay (featured in my Outside the Box).
The bottom line: QE didn’t work—and Janet knew it was unlikely to work—from the start.
So where did all that easy money go? I think I’ll let the authors tell you. I think you’ll enjoy this brief, clear-headed essay.
Read full article... Read full article...
Saturday, September 30, 2017
Kevin Warsh May Be the Next Fed Head—Let’s See What He Really Thinks / Interest-Rates / US Federal Reserve Bank
By: F_F_Wiley
As reported earlier this morning by the Wall Street Journal, President Trump and Treasury Secretary Mnuchin met with Kevin Warsh yesterday to discuss the potential vacancy at the Fed next February.
Warsh already has central banking experience, having sat on the Federal Open Market Committee as a Fed governor from February 2006 until March 2011.
Read full article... Read full article...
Saturday, September 23, 2017
Calling the UltraShort 20+ Year Treasury Bonds Low ... Where Is Yield Heading Next? / Interest-Rates / US Bonds
By: Mike_Paulenoff
Calling the UltraShort 20+ Year Treasury Bonds Low ... Where Is Yield Heading Next?
On September 6, with the ProShares UltraShort 20+ Year Treasury (TBT) reaching a new low (33.32) in its 7-month corrective process, we noted that "Dec-Sep correction could be at or nearing a downside exhaustion."
Read full article... Read full article...
Saturday, September 23, 2017
How Will We Be Affected by a Series of Rate Hikes? / Interest-Rates / US Interest Rates
By: Boris_Dzhingarov
The current federal funds rate is 1.00% – 1.25%. The Fed started raising interest rates in December 2015, when they were at a historic low of 0.25%. Since then, 4 rate hikes have been implemented, each valued at 25-basis points. Today, the federal funds rate (FFR) is inching towards the 1.25% – 1.50% level. The average interest rate in the US between 1971 and 2017 was 5.77%. It peaked at 20% in 1980 and dropped to an all-time low of 0.25% after the global financial crisis of 2008. Interest rates are especially important when it comes to monetary policy.
Friday, September 22, 2017
Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms / Interest-Rates / UK Debt
By: GoldCore
– £1 trillion crisis looms as pensions deficit and consumer loans snowball out of control
– UK pensions deficit soared by £100B to £710B, last month
– £200B unsecured consumer credit “time bomb” warn FCA
– 8.3 million people in UK with debt problems
– 2.2 million people in UK are in financial distress
– ‘President Trump land’ there is a savings gap of $70 trillion
– Global problem as pensions gap of developed countries growing by $28B per dayp>
Friday, September 15, 2017
The US Debt Bubble Will Soon Warrant Serious Measures / Interest-Rates / US Debt
By: John_Mauldin
There is big debate over the exact amount of global debt.
Parts of it get hidden in many out-of-the-way pockets. But broadly speaking, global debt is about 325% of GDP, and likely over $225 trillion as I write.
Read full article... Read full article...
Friday, September 15, 2017
US Budget Deficit Swindling Futurity / Interest-Rates / US Debt
By: James_Quinn
“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” ― Thomas Jefferson
Yesterday the government reported a “modest” August budget deficit of $108 billion. That’s one month folks. This is another example of how the government and their mainstream media mouthpieces portray horrifically bad, extremely abnormal financial data as normal and expected. They pretend everything that has happened since 2008 is just standard operating procedure. They follow the Big Lie theory to the extreme. The masses have been so dumbed down, desensitized, and taught to believe delusions, they can’t distinguish the abnormal from the normal.
Read full article... Read full article...
Thursday, September 14, 2017
US Drowning in Debt, Surpasses $20 Trillion As Bankruptcy and Hyperinflation Loom Closer / Interest-Rates / US Debt
By: Jeff_Berwick
The US government finally surpassed the long anticipated $20 trillion national debt mark on Friday the 8th.
Oh, I don’t say “finally” because they had so restricted their expenditures that it was taking longer than expected. That’s far from the case!
In fact, under globalist, Donald “Big Government” Trump, the federal government had its largest deficit month in history in June topping $400 billion for the first time.
Read full article... Read full article...
Wednesday, September 13, 2017
Trump Suggests Eliminating the Debt Ceiling – Dollar Falls / Interest-Rates / US Debt
By: MoneyMetals
Those who paid any attention to the financial press last week saw the following narrative; President Donald Trump betrayed Republicans by cutting a deal with Democrats Nancy Pelosi and Charles Schumer. They agreed to punt on the borrowing cap until December and spend $15 billion for hurricane relief.
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Sunday, September 10, 2017
Hurricane Trump Blowing the Debt Ceiling Roof Off / Interest-Rates / US Debt
By: Peter_Schiff
Of all the absurd Washington pantomimes none has been as reliably entertaining and maddening as the annual debates to raise the debt ceiling. Although the outcome was always a foregone conclusion (the ceiling would be raised), the excitement came when fiscal conservatives bemoaned the perils of runaway debt and “attempted” to exact spending restrictions through threats “to shut down the government,” (which often led to news coverage of tourists being turned away from national parks.) On the other side of the aisle Democrats would rail that the ceiling must be raised “because America always pays her bills.” Lost was the irony that “paying” bills with borrowed money was fiscally responsible, and that raising the ceiling actually enabled America to continue to avoid paying its bills. After these amateur theatrics, the ceiling would be lifted and Washington would go on as if nothing happened. But at least the performance threw occasional light on the nation’s debt problems.Read full article... Read full article...
Thursday, September 07, 2017
Forecasting US 30-Year Treasury Bond Yields / Interest-Rates / US Bonds
By: Francois_Soto
The movement of interest rates affects lenders and creditors across global markets while influencing key variables such as output, employment, etc.We predict the US Generic 30-Year Treasuries Yield using a selection of macroeconomic variables chosen from hundreds of time series available.
We trade US1 future contracts based on the differential between the regression output and the actual yield and this strategy is profitable.
Interest rates are an important monetary policy tool to gauge the state of the economy and for policy makers to act accordingly. Per its definition, it is the rate at which interest is paid by a borrower for the use of money. The movement of interest rates affects lenders and creditors across global markets while influencing key variables such as output, employment, consumption, etc.
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Thursday, September 07, 2017
Yet Another Theory of the Fed? Uggh! / Interest-Rates / US Federal Reserve Bank
By: F_F_Wiley
The world hardly needs another theory of the Fed, especially so soon after its Jackson Hole symposium. But we have a theory, too, and who knows, ours could be as close to the bulls-eye as any of the others. Plus, our theory is easy to explain—it rests on the simple premise that decision makers worry mostly about their reputations. We’ll propose that reputational risks are the primary drivers of central bank policies, and then we’ll use that belief to predict a major policy shift.
Thursday, August 31, 2017
The Demise Of Libor Is Part Of A Massive Global Trend That Many Overlook / Interest-Rates / Global Financial System
By: John_Mauldin
BY XANDER SNYDER : For decades, the public put its trust in technocrats.
The thinking was that the economy and politics had become too complex for ordinary citizens to understand. And that the best way to handle it was to allow the experts to take over.
They were perceived to be skillful and knowledgeable enough to manage economically and politically important institutions (including banks).
The events of 2008–2009 shattered that belief.
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Wednesday, August 30, 2017
President Trump and ... the Interest Rate Yield Curve? Video / Interest-Rates / US Interest Rates
By: EWI
This chart offers a completely different take on the question of why President Trump's approval is falling.
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Sunday, August 27, 2017
Jackson Hole and the Appalachians / Interest-Rates / Central Banks
By: Raul_I_Meijer
The Jackson Hole gathering of central bankers and other economics big shots is on again. They all still like themselves very much. Apart from a pesky inflation problem that none of them can get a grip on, they publicly maintain that they’re doing great, and they’re saving the planet (doing God’s work is already taken).
But the inflation problem lies in the fact that they don’t know what inflation is, and they’re just as knowledgeable when it comes to all other issues. They get sent tons of numbers and stats, and then compare these to their economic models. They don’t understand economics, and they’re not interested in trying to understand it. All they want is for the numbers to fit the models, and if they don’t, get different numbers.
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Wednesday, August 23, 2017
How Planned Fed Rate Increases Impact The National Debt & Deficits / Interest-Rates / US Debt
By: Dan_Amerman
The United States national debt is currently about $20 trillion, and the federal government is paying some of the lowest interest rates in history on that debt. The Federal Reserve has raised interest rates four times now, and is publicly considering another five increases, for a total increase of roughly 2.25%.
What will be the impact on the national debt and deficits if the interest payments on the debt jump upwards because of the actions of the Fed?
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Sunday, August 20, 2017
Whoever Gets Appointed to the Fed, Expect Negative Rates and QE in the Next Crisis / Interest-Rates / Negative Interest Rates
By: John_Mauldin
Janet Yellen’s current turn at the chair expires in February.
Who will be running the Fed next year, and will it matter? How will new leadership change anything?
Trump could renominate her but hasn’t yet announced a decision or even given a hint.
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Thursday, August 17, 2017
The War on Cash - Rogoff, Orwell and Kafka / Interest-Rates / War on Cash
By: Raul_I_Meijer
Harvard professor and chess grandmaster Kenneth Rogoff has said some pretty out there stuff before, in his role as self-appointed crusader against cash, but apparently he’s not done yet. In fact, he might just be getting started. This time around he sounds like a crossover between George Orwell and Franz Kafka, with a serving of ‘theater of the absurd’ on top. Rogoff wants to give central banks total control over your lives. They must decide what you do with your money. First and foremost, they must make it impossible for you to save your money from their disastrous policies, so they are free to create more mayhem.
Thursday, August 10, 2017
Really Bad Ideas - Government Debt Isn’t Actually Debt / Interest-Rates / US Debt
By: John_Rubino
The failure of fiat currency and fractional reserve banking to produce a government-managed utopia is generating very few mea culpas, but lots of rationalizations.
Strangest of all these rationalizations might be the notion that government debt is not really a liability, but an asset. Where personal and business loans are bad if taken to excess, government borrowing is not just good on any scale, but necessary to a healthy economy. Here’s an excerpt from a particularly assertive version of this argument:
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Monday, August 07, 2017
The Death of Abenomics; the Rise of Interest Rates / Interest-Rates / Japanese Interest Rates
By: Michael_Pento
Job approval numbers for Japan’s Prime Minister Shinzo Abe are in freefall. Abe's support has now fallen below 30%, and his Liberal Democratic Party recently suffered heavy losses stemming from a slew of scandals revolving around illegal subsidies received by a close associate of his wife.
But as we have seen back on this side of the hemisphere, the public’s interest in these political scandals can be easily overlooked if the underlying economic conditions are favorable. For instance, voters were apathetic when the House introduced impeachment proceedings at the end of 1998 against Bill Clinton for perjury and abuse of power. And Clinton’s perjury scandal was indefensible upon discovery of that infamous Blue Dress. The average citizen, then busily counting their chips from the dot-com casino, were disinterested in Clinton’s wrongdoings because the 1998 economy was booming. Clinton remained in office, and his Democratic party gained seats in the 1998 mid-term elections.
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Thursday, August 03, 2017
The Fed’s Manipulations Have Rendered The Yield Curve Useless As a Recession Indicator / Interest-Rates / US Interest Rates
By: John_Mauldin
The yield curve has always had an excellent forecasting record.
The Fed’s own wacky policies may have skewed this early-warning system’s reliability, but an interpretive adjustment can restore its usefulness.
This indicator has allowed me to predict the last two recessions.
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Thursday, August 03, 2017
Raising the US Debt Ceiling Means Jacking Up Future Inflation / Interest-Rates / US Debt
By: MoneyMetals
By Stefan Gleason : The dramatic failure of the U.S. Senate’s last-ditch Obamacare repeal effort leaves Republicans so far without a major legislative win since Donald Trump took office. No healthcare reform. No tax reform. No monetary reform. No budgetary reform.
The more things change in Washington... the more they stay the same.
Despite an unconventional outsider in the White House, it’s business as usual for entrenched incumbents of both parties. The next major order of business for the bipartisan establishment is to raise the debt ceiling above $20 trillion.
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Thursday, August 03, 2017
America's Finances in a Better World / Interest-Rates / US Debt
By: DeviantInvestor
In a better world we might expect:
- Individuals, corporations, and governments spend no more than their income.
- “Honest” money is used by all, has intrinsic value, retains its purchasing power and is not counterfeited by individuals or bankers.
- Governments and bankers support and encourage “honest” money.
Tuesday, August 01, 2017
The Fed’s Monetary Tantrum Will Push The Economy Into Outright Deflation / Interest-Rates / Deflation
By: John_Mauldin
It is increasingly evident that the US economy is not taking off like some predicted after the election.
President Trump and the Republicans haven’t passed any of the fiscal stimulus measures we hoped to see. Banks and energy companies have got some regulatory relief, and that helps. But it’s a far cry from the sweeping healthcare reform, tax cuts, and infrastructure spending we were promised.
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Tuesday, August 01, 2017
Here’s The Real Reason The Fed Is Making Absurd Monetary Decisions / Interest-Rates / US Interest Rates
By: John_Mauldin
I have often written about the Fed's abysmal track record in managing the economy. Here Lacy Hunt and Van Hoisington of Hoisington Investment Management explain the reasons for the Fed's consistently poor track record.
They start by considering the Fed’s “dual mandate,” which sets “the goals of maximum employment, stable prices and moderate long-term interest rates.” (And yes, that is actually three goals, not two.)
But a problem arises, the authors note, “because considerable time elapses between the implementation of the monetary actions designed to follow the mandate and when the impact of those actions take effect on broader business conditions.”
The time lag can easily be three years or longer, with the result that policy changes often end up being pro-rather than countercyclical. To make matters even worse, “the economic risks from adherence to this dual mandate are now much greater than historically due to the economy’s extreme over-indebtedness, poor demographics and a fragile global economy.”
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Sunday, July 30, 2017
368 TRILLION Reasons the Fed Won’t “Normalize” Rates / Interest-Rates / US Interest Rates
By: Graham_Summers
Many commentators are baffled as to why the Fed has suddenly reversed course. Throughout 2017 the Fed has talked repeatedly about raising rates several times as well as shrinking its balance sheet.
Then in the span of a single month, the Fed just about dropped all of this. Fed Chair Janet Yellen, speaking to Congress, confessed that the Fed is just about done with rate hikes and that any balance sheet reduction will NOT be used to drain liquidity from the system.
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Thursday, July 27, 2017
Why Surging UK Household Debt Will Cause The Next Crisis / Interest-Rates / UK Debt
By: GoldCore
– Easy credit offered by UK banks is endangering “everyone else in the economy”
– UK banks are “dicing with the spiral of complacency” again
– Bank of England official believes household debt is good in moderation
– Household debt now equals 135% of household income
– Now costs half of average income to raise a child
– Real incomes not keeping up with real inflation
– 41% of those in debt are in full-time work
– £1.537 trillion owed by the end of May 2017
Wednesday, July 26, 2017
Central Banks ARE The Crisis / Interest-Rates / Central Banks
By: Raul_I_Meijer
If there’s one myth -and there are many- that we should invalidate in the cross-over world of politics and economics, it‘s that central banks have saved us from a financial crisis. It’s a carefully construed myth, but it’s as false as can be. Our central banks have caused our financial crises, not saved us from them.
It really should -but doesn’t- make us cringe uncontrollably to see Bank of England governor-for-hire Mark Carney announce -straightfaced- that:
Read full article... Read full article...“A decade after the start of the global financial crisis, G20 reforms are building a safer, simpler and fairer financial system. “We have fixed the issues that caused the last crisis. They were fundamental and deep-seated, which is why it was such a major job.”
Friday, July 21, 2017
Are Central Bankers Secretly Terrified? / Interest-Rates / Central Banks
By: Graham_Summers
Central Bankers are absolutely terrified.
In the last month, both Fed President Janet Yellen and ECB President Mario Draghi have issued somewhat hawkish statements, only to turn around within 48 hours and walk back their comments.
Again, two of the most powerful Central Bankers in the world couldn’t even last three days being hawks.
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Thursday, July 20, 2017
The Fed May Show Trump No Love / Interest-Rates / US Interest Rates
By: Peter_Schiff
Typically, U.S. Presidents are wary of claiming stock market performance as a referendum on their success. Most have seemed to understand that taking credit also means accepting blame, and no one would want to make the tortured argument that the positive moves reflect well on their presidency but that the negative moves do not. But Donald Trump has shown no reluctance to make any argument that suits his political purpose of the day, no matter its absurdity, and no matter if he has to contradict the arguments he made last year, or last week. Perhaps he assumes, as most investors seem to, that the risks are minimal because the Federal Reserve will jump in to save the markets if things turn bad. But in binding his performance so closely to the markets he overlooks the possibility that the Fed will be far less charitable to him than it was to Obama.
Thursday, July 20, 2017
The Student Loan Bubble and Economic Collapse / Interest-Rates / Student Finances
By: Antonius_Aquinas
The inevitable collapse of the student loan “market” and with it the takedown of many higher educational institutions will be one of the happiest and much needed events to look forward to in the coming months/years. Whether the student loan bubble bursts on its own or implodes due to a general economic collapse, does not matter as long as higher education is dealt a death blow and can no longer be a conduit of socialist and egalitarian nonsense for the inculcation of young minds.
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Friday, July 14, 2017
Subprime Auto Loans Up, Car Sales Down: Why This Could Be Good for Gold / Interest-Rates / Auto Sector
By: HAA
The latest monthly motor vehicle sales report released on July 3 paints a grim picture for US car sales. Overall June sales dropped by 3% compared to June of last year—the sixth successive month of lower year-over-year sales.
General Motors, Ford, and Fiat Chrysler were among the greatest losers with declines between 4.7% and 7%. Japan’s top sellers fared a little better, with Nissan seeing 2% growth and Toyota a 2.1% gain.
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Sunday, July 09, 2017
Did Junk Bonds Just Signal the End to This Credit Cycle? / Interest-Rates / US Bonds
By: Graham_Summers
Stocks are now in very serious trouble.
The S&P 500 has fallen to test its “election rally” trendline. If the market breaks down here, there’s essentially one giant “air pocket” down to 2,200 or so.
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Friday, July 07, 2017
If The Fed’s Members Spent Some Time As Uber Drivers, Our Monetary Policy Would Be Saner / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY PATRICK WATSON : John Mauldin wrote a letter last year called “Life on the Edge” that I think was one of his most important ever. It drew more reader feedback than anything else of John’s I’ve seen.
Drawing on Peggy Noonan’s Protected vs. Unprotected theme, John described how our economy has left so many people behind. Their anger, much of it well-justified, is one reason Donald Trump is now president.
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Thursday, July 06, 2017
Italy Has Ignored ECB Regulations And Bailed Out Its Banks Again / Interest-Rates / Financial Crisis 2017
By: John_Mauldin
By Xander Snyder : The Italian government has bailed out its banks again. Unwittingly, it has shown just how ineffective the European Central Bank is.
Rome recently finalized a deal to save one of the country’s largest and most important commercial banks, Monte dei Paschi di Siena. In another deal, Intesa Sanpaolo, a much more stable bank, will bail out Veneto Banca and Banca Popolare di Vicenza.
Both agreements involve Italian government funds and prevent senior creditors from incurring losses. That skirts the European Union’s strictest banking regulations, which allow Brussels to impose losses on senior bondholders.
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Wednesday, July 05, 2017
Fed Officials Say More Hikes Are on The Way, Markets Disagree / Interest-Rates / US Interest Rates
By: MoneyMetals
By Clint Siegner : Federal Reserve Chairwoman Janet Yellen says she is planning more hikes in the Fed funds rate, but you wouldn’t know it by watching the markets. So far, the response in foreign exchange, bonds, and equities isn’t what people expected.
Markets have always been notorious for behaving unpredictably.
But in an age when central bankers micromanage virtually all markets, the behavior could be the result of careful planning. Maybe the recent market action was only unpredictable for those of us outside of the FOMC conference room.
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Wednesday, July 05, 2017
Will Trump Fire Yellen or Vice Versa / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
Citigroup’s Economic Surprise Index just hit its lowest level since August 2011. But this level of disappointment has ironically emboldened the Fed to step up its hawkish monetary rhetoric. The truth is that the hard economic data is grossly missing analyst estimates to the downside as the economy inexorably grinds towards recession. This anemic growth and inflation data should have been sufficient to stay the Fed's hand for the rest of this year and cause it to forgo the unwinding of its balance sheet.
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Monday, July 03, 2017
NY Fed President Just Admitted Ignoring The Bond Market… I Have A Theory / Interest-Rates / US Bonds
By: John_Mauldin
Speaking at a Business Roundtable event, New York Fed President William Dudley reportedly expressed great confidence in both the economy and the Fed’s policy moves.
Dudley is not even slightly concerned about the Fed’s overshooting with its rate hikes. In fact, he is supremely confident that inflation will overshoot if the Fed doesn’t tighten policy.
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Sunday, July 02, 2017
Central Bankers Just Lit the Fuse on a $217 TRILLION Debt Bomb / Interest-Rates / Global Debt Crisis 2017
By: Graham_Summers
As we noted yesterday, the world’s Central Banks have begun sending signals that the price of money in the financial system (bond yields) is going to be rising.
Why is this a big deal?
Because globally the world has packed on $68 TRILLION in debt since 2007. And ALL of this was issued based on the assumption that bond yields would be remaining at or near record lows.
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Sunday, July 02, 2017
Janet Yellen Just Said The Most Ridiculous Thing We’ve Heard All Year! / Interest-Rates / US Interest Rates
By: Jeff_Berwick
Of all people, the last person you should ever ask about what is going to happen in the economy is a central banker or a Keynesian economist.
They are, after all, communists trying to centrally plan the economy. Commies are always clueless about economics.
And, their track record of predicting the economic future is almost perfect in that they almost always say “this time things are different” just moments before another crash happens.
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Saturday, July 01, 2017
Sovereign Debt Jubilee, Japanese-Style. The US National Debt / Interest-Rates / Global Debt Crisis 2017
By: Ellen_Brown
Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.
Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.
A lot of interest.
If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.
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Thursday, June 29, 2017
The Fed Is Pursuing An After-Me-The-Deluge Monetary Policy / Interest-Rates / US Interest Rates
By: John_Mauldin
I think there is a mixture of political bias and legacy-building that is driving Federal Reserve policy. The simple fact is that the Fed should have been normalizing interest rates starting in 2013.
Fifty basis points a year, and we would be at 2% now. That is not exactly a torrid rate-hike path. It cannot be seen as putting your foot on the brakes. It’s simply moving to normalize a situation that everybody realizes is abnormal.
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Tuesday, June 27, 2017
Here’s Why Robots Should Take the Fed’s Job / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY PATRICK WATSON : The Federal Reserve hiked interest rates again last week.
Higher rates aren’t entirely bad. They might help savers holding cash—though I wonder why anyone would still hold cash after almost a decade of punishment. The Fed has forced Americans into riskier assets, using every tool but horsewhips.
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Tuesday, June 27, 2017
We Are Witnessing the Largest Twin Bubbles in History / Interest-Rates / Global Debt Crisis 2017
By: John_Mauldin
BY STEPHEN MCBRIDE : In the coming years, we will have to deal with the largest twin bubbles in history. It’s global debt (especially government debt) and the even larger bubble of government promises.
Together, these twin bubbles make up what John Mauldin calls “The Great Reset.” Nobody can tell how this crisis will play out, but one thing is for sure, it will affect everyone in a big way.
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Tuesday, June 27, 2017
The Federal Reserve And Drug Addiction – A Prediction / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
The Federal Reserve Bank was established in 1913. Its stated purpose was to control the economic cycles; more specifically to avoid panics and crashes by smoothing out the variances in the stages (prosperity, inflation, recession, depression) of the economic cycle.
The plan centered around control (expansion and contraction) of the money supply and exertion of any influence it could muster regarding direction (up, down, or stable) of interest rates.
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Tuesday, June 27, 2017
US Bonds and Related Market Indicators / Interest-Rates / US Bonds
By: Gary_Tanashian
Excerpted from the June 25 edition of Notes From the Rabbit Hole, which also included comprehensive analysis of US and global stock markets, commodities, precious metals and stock charts galore (with the Market Internals segment, in particular, having evolved into what I find to be a must-have guide).
TLT is now a buck from its target of 129. Tell me, where is all that mania about rising interest rates and the likes of the “R.I.P. Bond Bull Market” headlines (Bloomberg called the bottom almost to the day with that Louise Yamada hype). Now a mature bounce labors on. 129 does not need to stop the move, but it’s a long-standing marker, so…
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Tuesday, June 20, 2017
We’ve Entered A Period Of Maximum Monetary Uncertainty / Interest-Rates / US Interest Rates
By: John_Mauldin
BY PATRICK WATSON : America is fully employed, or so say the statistics.
Federal Reserve officials think the job market is strong enough to justify higher interest rates. They’re afraid inflation will get out of control.
But if inflation is a problem, it’s not yet apparent in the average worker’s paycheck. “Just wait,” the inflation hawks say.
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Monday, June 19, 2017
US Bonds and Related Market Indicators / Interest-Rates / US Bonds
By: Gary_Tanashian
The June 18 edition of Notes From the Rabbit Hole has a few less stock charts this week in order to ramp up the macro talk, which appeared periodically through the report; but especially in the Precious Metals and Bonds segments. Excerpted from NFTRH 452…
Bonds & Related Indicators (and more macro discussion)
The target for TLT continues to be around 129. Treasury bonds are in bull trends (remember back a few months ago to all the bond hatred in the media). How does an eventual decline in bonds square with what we just noted above regarding Q4 2008? [work done in the preceding Precious Metals segment] Treasury bonds were a wonderfully bullish asset during Armageddon ’08 and who’s to say that an upside blow off may not be coming sooner rather than later amid massively over bullish sentiment? I mean, there is certainly no stop sign at our 129 target. Sentiment, as we are all too aware, can take a long while to manifest in pricing.
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Saturday, June 17, 2017
Here Comes Quantitative Tightening / Interest-Rates / US Interest Rates
By: Peter_Schiff
All of a sudden the Fed got a little tougher. Perhaps the success of the hit movie Wonder Woman has inspired Fed Chairwoman Janet Yellen to discard her prior timidity to show us how much monetary muscle she can flex when the time comes for action.
Although the Fed's decision this week to raise interest rates by 25 basis points was widely expected, the surprise came in how the medicine was administered. Most observers had expected a "dovish" hike in which a slight tightening would be accompanied by an abundance of caution, exhaustive analysis of downside risks, and assurances that the Fed would think twice before proceeding any farther. But that's not what happened. Instead Yellen adopted what should be viewed as the most hawkish policy stance of her chairmanship.
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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...
Tuesday, April 25, 2017
US Treasury Bond Yields / Interest-Rates / US Bonds
By: Ed_Carlson
TNX – the yield on the 10yr US Treasury note - gained 0.22% last week closing at 22.37 but 14-day RSI remains below its own 20-dma; bearish. The break of support at 23.35 (now resistance) has opened a door for a return to 20.00.
The monthly chart below shows how the long-term trend line has turned back the rally in TNX on numerous occasions. However, as the monthly Coppock Curve failed to confirm the 2012 low during the 2016 test of that low we’ve probably seen the low of the +30yr decline in interest rates.
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Wednesday, April 19, 2017
The Fed Must Be Reading Our Work / Interest-Rates / US Federal Reserve Bank
By: Rodney_Johnson
It’s too much of a coincidence. Fed officials must be reading our work.OK, they don’t really have to be… but if they don’t, they should.
It’s not that we deserve credit for what comes next at the Fed, but I was glad to read the details last week in the nitty-gritty of the Fed’s minutes of its March meeting. (You would’ve had to have read it there; Fed chair Janet Yellen didn’t talk about it at all in her post-meeting press conference.)
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Monday, April 17, 2017
Fed Will Cause a 2008 Redux / Interest-Rates / US Bonds
By: Michael_Pento
Truth is a rare commodity on Wall Street. You have to sift through tons of dirt to find the golden ore. For example, main stream analysis of the Fed's current monetary policy claims that it will be able to normalize interest rates with impunity. That assertion could not be further from the truth.
The fact is the Fed has been tightening monetary policy since December of 2013, when it began to taper the asset purchase program known as Quantitative Easing. This is because the flow of bond purchases is much more important than the stock of assets held on the Fed's balance sheet. The Fed Chairman at the time, Ben Bernanke, started to reduce the amount of bond purchases by $10 billion per month; taking the amount of QE from $85 billion, to 0 by the end of October 2014.
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Tuesday, April 11, 2017
Who’s Liking the US Interest Rate Hike Most? / Interest-Rates / US Interest Rates
By: Nicholas_Kitonyi
As investors prepare for what looks like a potentially second rate hike within the first half of 2017, there are those who are still questioning the overall impact of increased interest rates on the economy.By trade, stock market investors gain more when interest rates are higher. This is simply because capital risk assets will reflect the interest rate hike. However, as per the most recent rate hike, things seem to be a little different.
The stock market rallied from late January when a rate hike during the first quarter of the calendar year became more feasible with every Federal Reserve minutes pointing towards an increment.
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Wednesday, April 05, 2017
US Debt Ceiling Shutdown: What Would Happen if the Government Shut Down For Good? / Interest-Rates / US Debt
By: Jeff_Berwick
It’s that time of year again where the US government acts like it will “shut down” and argues about nonsensical things to try to make people believe they are somehow necessary.
In 2015, Congress suspended the ceiling, which let the government borrow as much as it wanted through March 15, 2017. On that date, the total national debt was $19.846 trillion, and the government can't exceed that limit without approval from Congress.
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Tuesday, April 04, 2017
All Eyes on US Bond Market Yields / Interest-Rates / US Bonds
By: Mike_Paulenoff
After the first day of trading of April, a relatively uneventful one for the equity markets in general, the most consequential market for me is 10-year yield!
Yield continues to exhibit weakness, and is bearing down on a critical 5-month support level at 2.30%, which if violated and sustained, will trigger downside continuation signals that project to 2.10% optimally, and possibly to 2.00% prior to the next upmove (in yield).
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Thursday, March 23, 2017
Trading with Elliott Waves Doesn't Have to Be Complicated / Interest-Rates / Elliott Wave Theory
By: EWI
Start simple, with the basic 5 "core" Elliott wave chart patterns
Jeffrey Kennedy, a recognized expert in Elliott wave analysis and forecasting, explains why the Wave Principle is such a reliable and powerful way to forecast the financial markets.
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Thursday, March 23, 2017
Low Interest Rates Helping Australia Transition from the Mining Boom / Interest-Rates / Austrailia
By: Nicholas_Kitonyi
Australia’s transition from its reliance on mining exports to other sectors appears to be gathering pace as more businesses continue to take advantage of the low interest rates.The Reserve Bank of Australia reduced the base interest rate, popularly referred to as the cash rate, twice last year from 2% to 1.75% and again to 1.5%. The cash rate remains fixed at 1.5%, which when compared to many developed countries is still one of the highest.
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Wednesday, March 22, 2017
MSM Bond Market Full Nonsense Mode as ‘Trump Trades’ Unwind on Schedule / Interest-Rates / US Bonds
By: Gary_Tanashian
I’ve been watching the herds to try to determine just when the interest rate topic among the best and brightest (as chosen by the media) would start to pivot from ‘rising rates!’ hysterics that have been locked and loaded in the public psyche since the US election to a sort of ‘rut roh, maybe we got played again… ‘ realization that Rome – and a Great America – are not built in a day.
Monday, March 20, 2017
Where the Fed Goes, Other Central Banks May Not Follow / Interest-Rates / Central Banks
By: STRATFOR
It has been a busy couple of days for the world's central banks. Since the U.S. Federal Reserve made its decision to hike interest rates, rate announcements have followed from the People's Bank of China, the Bank of Japan, the Swiss National Bank and the Bank of England. This confluence of activity from most of the key guardians of the global economy provides a good opportunity to take stock of where things stand.
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Friday, March 17, 2017
US Government Hits Its Debt Target (Ceiling) Again As Trump Has No Plan To Reduce Government / Interest-Rates / US Debt
By: Jeff_Berwick
Many people fell for Donald Trump’s pre-election promises, but we warned there would be no major changes made and that Trump was an elite insider.
How right we were.
Here was a list of his biggest promises and how he has already backtracked on all of them:
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Wednesday, March 15, 2017
Forget 3% Growth with This Deficit, US Approaching 150% Debt-to-GDP Ratio / Interest-Rates / US Debt
By: John_Mauldin
Studies have shown that when government debt rises above 90% it begins to have an effect on the growth of GDP. That conclusion is a bit controversial in economic circles, as some say the critical level is higher or lower.
Understand, those studies are not examining some theoretical proposition; they are looking at actual debt and growth levels in countries over a long period of history. And the data show that excess debt inhibits growth.
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Wednesday, March 15, 2017
Fed Rate Hikes, Fiscal vs. Monetary Policy and Why Again the Case for Gold? / Interest-Rates / US Interest Rates
By: Gary_Tanashian
I’ve been thinking about the current Fed Funds rate hike cycle, which is logically gaining forward momentum now that the Fed can stand down from its 8-year, ultra-lenient monetary policy cycle. That is because the Obama administration’s goals required a compliant Federal Reserve to continually re-liquefy the economy as its fiscal policies drained it.
Tuesday, March 14, 2017
Raising the Ides of March US Debt Ceiling Limit / Interest-Rates / US Debt
By: BATR
One of the most played out scenarios in the rarified air of Washington life support is keeping the debt balloon inflating without blowing. Dismissing all the drama from the Kabuki theater that relies upon passing another continuing resolution to raise the debt limit seems to be one of the most reliable predictions that can be made about Congress. Come hell or high water, the borrowing ceiling goes up. So when Mnuchin calls on Congress to raise debt limit as deadline approaches, all seems ready to follow the familiar pattern of kicking the can down the road.
Friday, March 03, 2017
How Trump Versus Fed Adds to Uncertainty / Interest-Rates / US Interest Rates
By: Dan_Steinbock
To implement his $1 trillion dollar infrastructure plan, President Trump needs low rates, even though the Fed’s rate hikes will strengthen dollar. That means new uncertainty worldwide.In his Crippled America (2015), Trump argued that “our airports, bridges, water tunnels, power grids, rail systems—our nation's entire infrastructure is crumbling, and we aren't doing anything about it."
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Thursday, March 02, 2017
Trump Avoid Debt Crisis ? “Extremely Unlikely” says Rickards / Interest-Rates / US Debt
By: GoldCore
The upcoming March 15 U.S. debt ceiling deadline is something that is being largely ignored by markets and most media for now. Despite it being just 9 trading days away. This will change in the coming days and is one of the many reasons why we are bullish on gold.
Saturday, February 25, 2017
A Damaging Week for U.S. Treasury Yield! / Interest-Rates / US Bonds
By: Mike_Paulenoff
What a weird and unsettling week. The equity indices for the most preserved their gains, albeit despite Thursday's divergent action, while the bond market went straight up (YIELD straight down), which is the more curious of the major asset class behavior as we head into the weekend...
Technically, the plunge in yield fom 2.46% on Tuesday to 2.30% on Friday (-6.5%) has broken the integrity of the Dec-Feb high-level coil/digestion pattern. It is threatening to morph all of the action since Dec 15 (2.64%) into an intermediate-term top formation that will project weaker yield into the area of the up-sloping 200 day eMA, now at 2.10%
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Monday, February 20, 2017
A Game Of Chess And The Source Of The Federal Reserve’s Power / Interest-Rates / US Federal Reserve Bank
By: Kelsey_Williams
We have become pawns in the game of Chess being played by the Federal Reserve Bank. Who is their opponent? Anybody else who makes a move.
Week in, week out, everyone’s eyes and ears seem fixed on what the Federal Reserve Board will say or do. Mostly, it is about what they say. That’s because they can’t really do much of anything.
Except inflate the supply of money and credit. Which they have been doing for over one hundred years. And they are good at it, too. The historic erosion in value of the US dollar should merit more acclaim – or outrage. Unfortunately, the Fed is good at shifting the focus of concern to their opponent(s).
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Wednesday, February 15, 2017
This Chart Shows an Economic Anomaly That Investors Can’t Explain / Interest-Rates / US Interest Rates
By: John_Mauldin
BY PATRICK WATSON : Nineteenth-century writer Frédéric Bastiat, in his classic “Broken Window” parable, warned that economic thinking requires us to see what isn’t happening as well as what is.
This yield curve chart from Macquarie Research provides a good example.
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Monday, February 13, 2017
Is the UK An Economy Built on Debt? / Interest-Rates / UK Debt
By: Submissions
....
Saturday, February 11, 2017
Greece Debt Crisis Outrageous Malevolence / Interest-Rates / Eurozone Debt Crisis
By: Raul_I_Meijer
Earlier this week I was talking in Athens to a guy from Holland, who incidentally with a group of friends runs a great project on Lesbos taking care of some 1000 refugees in one of the camps there. But that’s another topic for another day. I was wondering in our conversation how it is possible that, as we both painfully acknowledged, people in Holland and Germany don’t know what has really happened in the Greek debt crisis. Or, rather, don’t know how it started.
That certainly is a big ugly stain on their media. And it threatens to lead to things even uglier than what we’ve seen so far. People there in Northern Europe really think the Greeks are taking them for a ride, that the hard-working and saving Dutch and Germans pay through the teeth for Greek extravaganza. It’s all one big lie, but one that suits the local politicians just fine.
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Friday, February 10, 2017
Brace Yourself, There May Be An Epic Collision Between Trump and Yellen / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY JARED DILLIAN : The FOMC recently held its first meeting since Trump took office. But before I get to that, I want to talk about the backdrop to the meeting… Trump’s relationship with Yellen and Yellen’s relationship with Trump.
Trump hasn’t had much good to say about Yellen. He said that her interest rate decisions were politically motivated. Hey, I was saying the same thing at the time. No disagreement out of me. No rate hikes for years, and now that Trump is elected, the Federal Reserve is suddenly keen on hiking with renewed vigor.
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Thursday, February 02, 2017
Could Cars Be the Death of Us This Time Around? / Interest-Rates / Debt Crisis 2017
By: Harry_Dent
The shining star of the 2009-2016 recovery has been auto sales.We weren’t surprised. In fact, we saw it coming. After all, cars are the last large purchase people make before stepping quietly into their years of increased saving and decreased spending. From around the age of 57 to 64, one task takes center stage: save for retirement. In the durable goods sector, housing peaks first around age 40, then furnishings at age 46. Only automobiles continue to grow after the peak in spending at age 46.
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Tuesday, January 31, 2017
US 10-Year Bond Yield Transitioning Out of Multi-Year Bear Market / Interest-Rates / US Bonds
By: Mike_Paulenoff
My intermediate and longer term technical set-up work on 10 year U.S. Treasury YIELD argues that benchmark yield is in transition from a 35 year Bear Market (dominant downtrend) into a multi-year Bull Market (dominant uptrend).
From 1981, when 10 year yield peaked at 15.84% amid concerns about rampant, un-containable inflation and stagnant growth ("Stagflation") precipitated initially by the 1973 OPEC Oil Embargo, benchmark yield steadily and relentlessly declined to a post-Financial-Crisis 2016 low at 1.32% (see Charts 1 and 2).
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Wednesday, January 25, 2017
TLT Update…US Bonds and Gold an Odd Couple / Interest-Rates / US Bonds
By: Rambus_Chartology
Lets start by looking at a weekly chart for TLT, 20 year bond etf, which shows it built out a H&S top last summer. That H&S top is a reversal pattern that showed up at the end of its bull market which has been ongoing for many years. There is a big brown shaded support and resistance zone that has been offering support.
Tuesday, January 24, 2017
2017’s Real Milestone, Or Why Interest Rates Can Never Go Back To Normal / Interest-Rates / US Debt
By: John_Rubino
Forget about NAFTA or OPEC or TPP or crowd size or hand size or any other acronym or stat or concept that obsesses the financial press these days. Only two numbers actually matter.
The first is $20 trillion, which is the level the US federal debt will exceed sometime around June of this year. Here’s the current total as measured by the US Debt Clock:
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Tuesday, January 24, 2017
Fed Monetary Policy Is Impotent Against These Trends / Interest-Rates / US Bonds
By: John_Mauldin
Chris Wood of CLSA has a marvelous newsletter called, aptly, GREED & fear. He began his January 5 issue talking about bond yields possibly bottoming out.
For perspective, he starts with this long-term view of the 10-year US Treasury yield.
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Tuesday, January 24, 2017
How Bond Market Investors Were Fooled Twice / Interest-Rates / US Bonds
By: EWI
The Commercials and Large Speculators are routinely on the opposite sides of trades
Most investors, including large groups of professional money managers, extrapolate financial trends into the future. So they're often completely caught off guard when a trend changes.
[Editor's Note: The text version of the story is below.]
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Monday, January 23, 2017
Building Societies are Winning the Mortgage Interest Rate War / Interest-Rates / Mortgages
By: MoneyFacts
With competition still fierce in the mortgage market and many banks claiming to launch the lowest products ever on their records, many borrowers could assume that the mortgage rates from these providers will be significantly lower than those offered elsewhere. However, Moneyfacts.co.uk research shows that building societies are the winners when it comes to the mortgage rate war.
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Thursday, January 19, 2017
Trump Deficits Will Be Huge / Interest-Rates / US Debt
By: Peter_Schiff
There is much we don't know about how the Trump presidency will play out. Will the Wall get built? Who will pay for it? Will it have at least some fencing? Will repeal and replace happen at exactly the same time? Will Trump throw a ceremonial switch? Will there be a Trump National Golf Course in Sochi? It's anyone's guess. But of one thing we can be fairly certain. President Trump is very likely to preside over the largest expansion of Federal budget deficits in our history. Trump has built his companies with debt and I'm sure he thinks he can do the same with the country. His annual budget deficits are likely going to be huge. This development will make a greater impact on the investment landscape than most on Wall Street can imagine.
Thursday, January 12, 2017
How Debt Differs in China, the US and Japan / Interest-Rates / China Debt Crisis
By: Dan_Steinbock
Unlike advanced economies, China remains better positioned to overcome its debt challenges, due to the nature of is debt, level of development and economic fundamentals. Change is coming – but after fall.In recent months, China has managed to stabilize growth. Nevertheless, stabilization has required capital controls, continued lending and repeated interventions. Due to efforts to stabilize the renminbi, for instance, China’s foreign-exchange reserves fell to $3 trillion last month; the lowest since spring 2011.
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Sunday, January 08, 2017
China Potentially Threatens a Near Term Us Treasury Bond Market Short Squeeze! / Interest-Rates / US Bonds
By: Gordon_T_Long
Problems in China are looming on top of an already very tenuous and misunderstood situation in the US Financial Markets. Additionally, Federal Reserve Policy has made the situation even more combustible!
As a result of a Trump Victory inspired bond market massacre there are now few places that a yield starved world can presently find better risk-adjusted yields than in US Treasuries. With China now being forced to sell their FX Reserves and thereby creating the much needed supply so eagerly craved by foreign investors, it is also further depleting an already restricted EuroDollar pool required to buy this supply. There are consequences of this combination of shifting global parameters.
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Wednesday, January 04, 2017
Trumponomics Won’t Trump the Bond Market Bust / Interest-Rates / US Bonds
By: Michael_Pento
Despite the millions of dollars Wall Street plowed into the Clinton campaign in vain, the financial industry has nevertheless now become downright giddy with the prospects of a Donald Trump presidency. The imperative question investors need to determine is will the Trump presidency be able to generate viable growth. And, if he cannot produce robust and sustainable growth imminently, are the markets now priced for perfection that simply may never arrive? Read full article... Read full article...
Wednesday, January 04, 2017
Increased Fiscal Spending Could Spell Debt Trouble for 2017 / Interest-Rates / US Debt
By: John_Mauldin
Over the past 30 years, America’s economic growth and boom-bust market cycles have been fueled with abundant sources of cheap debt. Whether emerging markets or commodity-rich countries, there’s been no shortage of buyers of US debt.
This has allowed the US—and by extension its consumers—to borrow huge sums of capital to spend on fiscal items or for personal consumption. It was a rather symbiotic relationship from which both parties would benefit, even if longer term prosperity was being jeopardized.
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Monday, December 26, 2016
Moment of Truth for US Bonds / Interest-Rates / US Bonds
By: Gary_Savage
Moment of Truth for Bonds
Bonds are severely oversold. There should be a bounce but if it’s weak, or doesn’t last very long then prepare for a crash. I’ve never seen a bubble yet that popped gracefully.
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Sunday, December 25, 2016
Greece’s Debt Problem Has Reached a Dangerous Point / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
BY ALLISON FEDIRKA : Before the Italian banking crisis and referendum, before Brexit… there was Greece. Greece’s debt crisis was really the first public crack in the European Union’s armor and one that has yet to be repaired.
Readers who want to understand why anti-EU sentiment and nationalism have developed in many of these countries don’t have to look at migration or other controversial topics. Simply look at Greece and how it has fared after adopting the EU’s austerity terms.
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Sunday, December 25, 2016
I Bet We’ll Get Four or More Interest Rate Hikes Next Year / Interest-Rates / US Interest Rates
By: John_Mauldin
BY JARED DILLIAN : The fed funds target is now 0.50%–0.75%.1 Hooray!
The Fed is finally, after eight years, normalizing interest rates.
The timing is awfully interesting, though—what a coincidence that the rate hike comes right after the election!
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Saturday, December 24, 2016
The Italian Banking Crisis: No Free Lunch -- or Is There? / Interest-Rates / Credit Crisis 2016
By: Ellen_Brown
On December 4, 2016, Italian voters rejected a referendum to amend their constitution to give the government more power, and the Italian prime minister resigned. The resulting chaos has pushed Italy's already-troubled banks into bankruptcy. First on the chopping block is the 500 year old Banca Monte dei Paschi di Siena SpA (BMP), the oldest surviving bank in the world and the third largest bank in Italy. The concern is that its loss could trigger the collapse of other banks and even of the eurozone itself.
Saturday, December 24, 2016
A Broken US Bond Market Bounce Beckons! / Interest-Rates / US Bonds
By: Gordon_T_Long
Historical Correlations Give Us a Clue to What May Be Ahead!
A Falling Global Market Cap Trend Channel
The old adage that the "Trend is Your Friend" has proven to be the one that separates the winners from the losers. The key however is whether you recognize the right trend!
We are being possibly lulled into a false perception and belief of how good things appear if we solely look at the US equity rally. Yes it is temporarily rising but the 600# Gorilla is the Global Bond market and major problems are still lurking.
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Thursday, December 22, 2016
Social Trading – Different types and Styles / Interest-Rates / Learn to Trade
By: Submissions
...
Wednesday, December 21, 2016
Why Are Foreign Nations Dumping US Treasuries / Interest-Rates / US Bonds
By: Dan_Steinbock
Recently, foreign holders of US treasuries have been dumping their holdings more and at record pace. Optimists see it as a temporary fluctuation. Realists warn about structural change.
According to US Treasury data, major foreign holders of US treasury securities have been reducing their holdings by almost $250 billion since March. The pace of dumping has intensified with some $200 billion reduced in just past two months.
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Tuesday, December 20, 2016
Brace Yourself For Italy’s Bankruptcy / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
When Charles Gave of Gavekal chooses to express displeasure over an economic trend, an asset class, or what have you, he does not mince words. Right now, Charles is exercised about Italy.
When Italy adopted the euro in 1999, Charles argued at the time that Italy would change from being an economy with a high probability of many currency devaluations to one with the certain probability of eventual bankruptcy. Now, he says, the fateful moment is not far off.
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Tuesday, December 20, 2016
Trump Appointees Could Make Up The Majority Of The Fed In Two Years / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
BY PATRICK WATSON : The Trump administration's economic team is beginning to take shape, but we still don’t have nominees for two Federal Reserve Board vacancies.
Whoever gets them will have a chance to truly disrupt the global economy. That’s a big deal—so why haven’t we heard more about Trump’s plans for the Fed?
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Sunday, December 18, 2016
US DEBT - A Total Disregard For Fiscal Responsibility / Interest-Rates / US Debt
By: Andy_Sutton
While we aren’t sure the coast is clear – yet – the show must indeed go on. There are topics that need to be discussed. Now with the whole new concept of ‘fake news’ out there for the sole purpose of discrediting anything the establishment wants off the radar we’re going to have to ask you to look at the decade’s worth of work that has been poured into this column and decide if we are fake or not.
For the sake of honesty, it must be pointed out that the mainstream media, in a classic false flag type move, created the whole idea of fake news with its own ridiculous material, then used the whole stunt to say ‘see, we need to be careful because there are lots of phonies out there’. Darn right there are. We’ll allow that there are quite a few shills in the alternative media. Their betrayal will be exposed in time, but for the most part the phonies have three letter network affiliations attached to them.
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Sunday, December 18, 2016
US Bond Market Implosion Continues / Interest-Rates / US Bonds
By: Gary_Savage
The Bond Implosion Continues
Is the bond market implosion the next black swan event that everyone is ignoring?
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Friday, December 16, 2016
Trump Making Deficits and Public Debt Great Again / Interest-Rates / US Debt
By: Arkadiusz_Sieron
Trump’s economic agenda consists of foreign policy, fiscal policy and regulatory policy. We have already commented a bit about Trump’s imprint on geopolitics and uncertainty in the context of the gold market. Now, let’s focus on the domestic policies.
First, Trump wants to reduce regulations hampering business. During the campaign he called for a moratorium on new financial regulations and for a 70 percent reduction in regulations. Importantly, in his 100-day action plan, the president-elect proposed that for every new federal regulation, two existing regulations must be eliminated. Deregulation should stimulate economic growth and the stock market, which is not good for the yellow metal.
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Thursday, December 15, 2016
Trump’s Debt Financial Revolution! / Interest-Rates / US Debt
By: Chris_Vermeulen
Trump’s economic plans will increase national debt!
A Ticking time bomb!
Currently, U.S. debt stands at a mammoth $19.8 trillion and will continue to increase under President-elect Trump considering his lenient tax cuts and plans for infrastructure spending:( http://www.usdebtclock.org/).
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Thursday, December 15, 2016
FOMC Raises US Interest Rates, Market Reacts in Mood Swings / Interest-Rates / US Interest Rates
By: Harry_Boxer
The stock market indices had a topsy-turvy day with the FOMC meeting taking place as they raised interest rates. The day started out with a move to the upside, they met resistance, backed off to test support, held, and although the S&P 500 made lower lows, the Nasdaq 100 did not. They then ran up into the FOMC. At that point, they made a little bit of a pop, and then went down in a steep slide, a big rally ensued, they went down in another steep slide, held support on the Nasdaq 100, but not on the S&P 500. A very sharp rally took them back almost near the rally highs, and then in the last 20-25 minutes they took a plunge into the close, and finished very ugly on the day.
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Monday, December 12, 2016
The Yield That Breaks the Trump Rally's Back / Interest-Rates / US Bonds
By: Michael_Pento
In 2012 I wrote a book called "The Coming Bond Market Collapse", in that book I predicted that the bond market would begin to collapse by the end of 2016. Clearly, this prediction has started to come true. However, in all candor, I never dreamed that the Ten-year Treasury yield would plummet to 1.3%. Neither did I ever imagine that over thirteen trillion dollars' worth of global sovereign bonds would have a negative yield, as was the case this past summer.
Friday, December 09, 2016
US Interest Rates and the Toughest Man Who Ever Lived / Interest-Rates / US Interest Rates
By: David_Galland
Dear Paraders,
I begin this week sitting at our dining room table here in Cafayate, Argentina. Out the window, the vista is brimming with sunshine, vineyards, lovely houses, and lovelier mountains across the valley.
My wife is off working out at the Athletic Club & Spa. I would be too, were I not laid up by my recent hernia operation.
Later today, I’ll be playing a demonstration game of the ancient Chinese game of Go with a fellow resident and master of the game from California. Then we’ll dine at Bad Brothers Wine Experience with freshly returned owners from South Africa and my friend, former partner, and now closest neighbor Doug Casey.
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Thursday, December 08, 2016
How Trump Can Bring Outside-the-Box Thinking to Bear on the Fed / Interest-Rates / US Interest Rates
By: MoneyMetals
President-elect Donald Trump will soon have the opportunity to put his stamp on the Federal Reserve. And that is making the elite body of central bankers nervous.
On the campaign trail, Trump harangued Fed chair Janet Yellen for pumping up financial markets with cheap money – accusing the Obama appointee of being politically motivated.
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Thursday, December 08, 2016
Violent US Bond Market Selloff: An Eye-Opening Perspective / Interest-Rates / US Bonds
By: EWI
In Elliott wave terms, bond investors have transitioned from extreme optimism to extreme pessimism
[Editor's Note: The text version of the story is below.]
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Wednesday, December 07, 2016
Cracks In US Treasury Bond Market, The Japanese Factor / Interest-Rates / US Bonds
By: Jim_Willie_CB
Foreign USTreasury Bond dumping continues, and even accelerates. China and the Saudis are selling USTreasurys in a near panic. Foreign central banks liquidated a record $375 billion in USGovt debt in the last 12 months. An American disaster lies in the making from debt saturation, debt overload, and debt dumping. It is all denied by the Washington mouthpieces and the Wall Street handlers, as they lie. The USGovt debt default is within view, dead ahead.
Wednesday, December 07, 2016
Bonds: 90% of You Are Herding / Interest-Rates / US Bonds
By: Gary_Tanashian
90% (my low-balled estimate) of you, the investing public, are herding when it comes to the bond market. You may not know it because the overwhelming psychological atmosphere is to reaffirm, not question peoples’ behavior. That is what herding is; a comforting feeling of going with the flow and being at one with your environment and the greater zeitgeist.
Now, please don’t be offended by the title; you dear reader may well be one of the 10%. But out there in the financial investment realm, they are herding, BIG time, as bond yields are expected to continue rising, because… media; because… “Great Rotation, part 2” and because… the story of epic secular changes and the chance to be early and clued in to a great new market phase are so alluring.
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Monday, December 05, 2016
The Bond Bubble / Interest-Rates / US Bonds
By: Gary_Savage
Is the bubble in the bond market about to burst? Even a move back to the 38% retracement level over the next several weeks would cause chaos in the global financial markets.
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Friday, December 02, 2016
Is Japan About to Implode the $10T $USD Carry Trade? / Interest-Rates / Global Financial System
By: Graham_Summers
It is said that history has a sense of irony. The latest US election is not an exception.
Consider the following…
- Donald Trump campaigned aggressively on trade… particularly his opposing of the fact that the US gets taken advantage of by foreign nations via bad trade deals.
- Trump wins the Presidency on November 8, 2016.
- US trade gets royally screwed in the currency markets.
Wednesday, November 30, 2016
The Federal Reserve And Interest Rates: Definitely NOT What You Think / Interest-Rates / US Interest Rates
By: Kelsey_Williams
Where we are today is the culmination of decades of irresponsible financial/fiscal policies and a complete abdication of fundamental economics. But that should not be a surprise. The self-proclaimed purpose of the Federal Reserve Bank is to manage the economic cycles; an impossibly presumptive task and a violation of fundamental economic theory.
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Tuesday, November 29, 2016
Could a “Greek-Style” Carry Tax on Cash Come to the US? / Interest-Rates / War on Cash
By: Graham_Summers
As we keep warning, India is not the “last stop” in the global financial elites’ war on cash.
Indeed, as ZeroHedge noted earlier today, officials are proposing a tax on cash withdrawals in Greece. They’re also proposing only permitting digital cash or cards for various transactions.
The claim behind this policy is that it would stop cash being used in the black market. This is similar to other claims that implementing a carry tax on physical cash or banning it altogether would stop money laundering or other illicit activities.
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Tuesday, November 29, 2016
The US Bond Bear Market Has Begun! / Interest-Rates / US Bonds
By: John_Mauldin
BY JARED DILLIAN : It’s almost as if I can see the future.
In the September 22 issue of The 10th Man, I went through the math of how people would get screwed in a bond bear market.
I gave some concrete examples of what would happen if rates backed up 100 basis points. And sure enough, since the election, rates have backed up about 40 basis points.
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Monday, November 28, 2016
This Looming Debt Crisis Could Ruin Many / Interest-Rates / Global Debt Crisis 2016
By: John_Mauldin
We must deal with the debt if we are going to survive . We have two options: Simply stop spending or grow the economy. “Stop spending” is easier said than done. And boosting growth is going to be difficult too.
Total debt this year rose by 6.8%, almost double our growth rate. Not the right direction. After eight years of the slowest economic recovery in history, growing our debt dramatically faster than we are growing our country—even when we include inflation.
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Sunday, November 27, 2016
Europe Will Devalue Or Dissolve - Welcome To The Currency War / Interest-Rates / Eurozone Debt Crisis
By: John_Rubino
No rest for the wicked. With the shockwaves from Brexit and President Trump still reverberating around the world, the established order is bracing for more bad news. Next up is a December 4 Italian constitutional referendum that might end the reign of centrist prime minister Matteo Renzi and replace him with a bunch of anti-euro iconoclasts from the Brexit/Trump part of the spectrum.
Sunday, November 27, 2016
Italian Bank Collapse European Sovereign Bond Carnage, Criss-Crossed Fuses & Lit Bonfire / Interest-Rates / Financial Crisis 2016
By: Jim_Willie_CB
Many are the potential fuses to be lit, which would create the conflagration, the massive bonfire of the bond vanities and bank charades. Many are the fuses lying around, all criss-crossed, all exposed, all overlapping each other in highly dangerous manner. If any single fuse is lit, then several will light and the detonation arrives. It is unavoidable since the financial world is so deeply interwoven. Never in modern history has the global financial structure been so badly weakened, so totally corrupted, so thoroughly undermined by control mechanisms, so intensely defended by sanctions even war. In 2007 and early 2008, the Jackass warned of a mortgage bust that would alter the global system forever. It happened with far reaching consequences which endure to this day.
Thursday, November 24, 2016
War On Cash Goes Global – India and Citibank In Australia / Interest-Rates / War on Cash
By: GoldCore
- War On Cash Goes Global – India, Australia and Citibank
- India shock cancellation of nation’s two highest-denomination notes
- India effectively invalidates & removes 86% of cash from circulation
- India sees “runs on banks” & severe financial difficulties
- Citi to makes all Australian branches cashless
- Australian pilot programme restricts 80% of payments on card
- UBS proposes Australia eliminates $100 and $50 bills
- What can we do about this?
- Conclusion
Wednesday, November 23, 2016
Post-election Debt Mathematics / Interest-Rates / US Debt
By: DeviantInvestor
The U.S. Presidential election is over. One candidate won, one lost, but the mathematics did not change.
Mathematics of What?
- US government debt has grown far more rapidly than GDP for decades. This is unsustainable.
- US government revenues increase about 4% per year while the official debt has grown at 9% per year, on average, since 1913. Official debt doubles in eight years regardless of which borrow and spend party and politicians are supposedly running the country and that is unsustainable.
- Official debt is currently about $20 trillion. Does $40 trillion in official debt sound plausible in the year 2024?
- How about $80 trillion in the year 2032?
- Worse, the debt goes astronomical if the financial and political elite choose hyperinflation.
Tuesday, November 22, 2016
Stock Market New All Tiime Highs & the Election Buried This HUGE Story / Interest-Rates / US Bonds
By: EWI
Stock Market Highs & the Election Buried This HUGE Story
Chart of the Day
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Tuesday, November 22, 2016
Reversal Interest Rates Are the Next Big Challenge for Central Banks / Interest-Rates / US Interest Rates
By: John_Mauldin
BY SAMUEL RINES : Negative and ultra-low interest rates have become the norm for the developed world. The phrases “lower for longer” and “new normal” are now accepted as facts rather than predictions. But, how low is too low?
For many developed world economies, rates remain low in order to combat stagnation as growth slows. Negative rates are a side effect of these deep, fundamental economic issues.
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Saturday, November 19, 2016
Trump Prepares to Takeover Fed / Interest-Rates / US Federal Reserve Bank
By: Mike_Whitney
In Donald Trump’s first four years as president, he will not only choose three judges for the Supreme Court, he’ll also pick five of the seven members on the Fed Board of Governors. It would be impossible to overstate the effect this is going to have on the nation’s economic future. With both houses of Congress firmly in the GOP’s grip, we could see the most powerful central bank in the world transformed into a purely political institution that follows the diktats of one man.
Tuesday, November 15, 2016
Trump's Mandate to Yellen: Print More Money or You're Fired! / Interest-Rates / Quantitative Easing
By: Michael_Pento
What kind of President will Donald Trump be? Will he restore America to its former position of greatness, or end up being feckless like a long list of his predecessors? That is yet to be determined.
However, what is clear now is if Donald Trump wants to avoid starting his tenure with an economic crisis similar to that of Mr. Obama he will need to put a lid on long-term interest rates rather quickly. And in order to do that he will have to convince a supposedly politically-agnostic Fed Chair, Janet Yellen, to not only refrain from further interest rates hikes but also to launch another round of long-term Treasury debt purchases known as Quantitative Easing (QE).
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Monday, November 14, 2016
Bond Market Bull Over or The Start of The Final Blow Off Top? / Interest-Rates / Bond Bubble
By: Plunger
Over a Trillion dollars has been vaporized in the bond market in just one week. The phrase "blood bath" is an understatement as the widows and orphans have been routed. This isn't supposed to happen in the the bond market. So is the great 33 year bond bull finally over and the deluge that we knew would ultimately come upon us? Not so fast chipmunk, is my reply and this is why. All great bull markets go through three complete phases. Phase I is the accumulation or stealth phase, phase II is the mark-up phase which lasts the longest and phase III is the blow off or mania phase. The NASDAQ and the oil bull markets exhibit provide us clean examples of these three phases in their 10 year bull runs which ended in crashes. Phase III is characterized by violent and deep yet short term corrections which shakeout all but the strongest hands. That is what the government bond market is undergoing in this recent violent move. First let's review those two bull markets in the NASDAQ and oil.
Saturday, November 12, 2016
Did U.S. Treasury Bonds Just Get Stumped by Trump? / Interest-Rates / US Bonds
By: EWI
The answer to where T-Bonds are headed is not in the news headlines about Trump. It's in the Elliott wave pattern
On November 9, the United States woke to the biggest political shock since Harry Truman defeated "shoe-in" Thomas E. Dewey in the 1948 U.S. presidential election.
For U.S. bond investors, the 2016 election has been head-spinning too.
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Thursday, November 10, 2016
And Of Course, No One is Talking About the US National Debt / Interest-Rates / US Debt
By: Rodney_Johnson
I’m beaten down.Worn out.
Punch drunk.
I’m not moonlighting as a cage fighter. I’m a registered voter in a swing state.
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Monday, November 07, 2016
Thanks to Obamacare, US Government Debt Is Worse Than You Think / Interest-Rates / US Debt
By: John_Mauldin
You’re probably aware that the US budget deficit jumped to $590 billion for fiscal 2016. What you might not know is that US government debt rose by $1.4 trillion last fiscal year. That difference between the deficit and debt increases is a huge number.
What did we spend that additional $800 billion on?
My friends Dr. Lacy Hunt and Van Hoisington of Hoisington Asset Management can answer that question and more. Using current CBO projections and the trend in off-budget debt, Lacy and Van estimate that US government debt could grow by an additional $13 trillion in the next 10 years (by 2025). That would put total debt at $33 trillion and push to 150% debt-to-GDP.
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Thursday, October 27, 2016
The Next Big Shoe to Drop – Student Loans / Interest-Rates / Student Finances
By: Dr_Jeff_Lewis
More than 40 million young Americans carry federal and private student loan debt – amounting to over $1 trillion. Defaults are on the rise and the issue has grown to become a nasty wealth transfer mechanism, as well as sad example of the failure of finance in general.
This week, President Obama announced a new initiative framed as a way of addressing the issue. Sadly, it is far from the mark, and just one more indication that monetary masters are the real puppeteers.
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Tuesday, October 25, 2016
The Current Message of Yield Curves: Inflation or Deflation? / Interest-Rates / US Bonds
By: Gary_Tanashian
With the state of post-Op/Twist systemic dysfunction, there are no absolutes, but…
Generally, a rising yield curve (after years of Goldilocks and her favored declining curve) would signal changes in financial markets. But it is not as simple as stating ‘the curve is rising… it’s bearish!’ or ‘the curve is rising… it’s bullish!’. It is potentially both of those things and it will have different implications for different markets and asset classes.
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Tuesday, October 25, 2016
Broken Central Banks: 4 Quick Pix / Interest-Rates / Central Banks
By: Jim_Willie_CB
The Western central bank franchise system is totally broken, totally insolvent, and totally corrupt. It invites the Gold Standard return. The entire financial system is built upon a debt-based monetary system. The debt saturation process has run its full course. The central bank heads have been covering the sovereign debt for the last five years, having rendered their balance sheets as ruined. Debt is at obscene levels, like $19.7 trillion for the USGovt. No debt limits are in place anymore, a signal that most likely it has already defaulted. A hidden game is underway, with control lost to the creditors, even as they attempt to salvage their debt holdings. The major central banks continue to manage badly the great game, where money is fake phony and a farce. A titanic battle is underway, where the Eastern nations are discarding their USTreasury Bonds, and doing so in tremendous volume while they set up the many platforms and pieces to the Gold Standard.
Monday, October 24, 2016
Did a Secret Central Banking Cabal Just Turn AGAINST the US? / Interest-Rates / US Bonds
By: Graham_Summers
Quietly and with little if any notice, foreign Central Banks have begun DUMPING US Debt.
Take a look at this chart. Does this look like a bull market to you? Because to me it looks like it could be the beginning of a panic sale.
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Wednesday, October 19, 2016
The Fed Has Made Another Massive Policy Error / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
I would argue that the Great Recession was a result of a massive monetary policy error. The Fed kept rates too low for too long, which—when coupled with lax or no regulation in the mortgage markets—resulted in a housing bubble and a crash. This then bled over to global markets.
I believe we are again suffering the effects of a massive monetary policy error. The error has already been committed, but we have just begun to endure the consequences.
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Friday, October 14, 2016
US T-Bill Rejection At Ports In Progress / Interest-Rates / US Bonds
By: Jim_Willie_CB
World trade has fallen for the second quarter in a row. The decade of stagnation of industrial production in the United States, Japan, and European Union can be blamed on financial engineering, housing bubbles, war, and recently on destructive monetary policy in QE bond purchase program. It is not stimulus, but rather a destroyer of capital. The West contains several nations with heavy industrial emphasis, hardly advanced economies anymore. They risk a fall into the Third World from a generation of outsourcing, asset bubbles, and financial fraud, as soon as the new currency regime is installed as part of the financial RESET.
Friday, October 14, 2016
Our Current Keynesian Nightmare / Interest-Rates / US Debt
By: Frank_Hollenbeck
It is not an understatement to say that the economic policy of the United States since 2008 has been purely Keynesian. Interest rates are near zero and the national debt stands at nearly $20 trillion. This is a direct result of applying the policy prescription recommended in Keynes’ General Theory. One day, his book will likely sit next to Karl Marx’s Communist Manifesto as works that generated dangerously false notions of reality with disastrous consequences.
Friday, October 14, 2016
These 2 Debt Instruments Pose Peril to Millions of Investors / Interest-Rates / US Bonds
By: EWI
A billionaire says the search for yield is overriding credit judgment
In a world of low and even negative rates, bond investors are so hungry for yield they're willing to accept high levels of risk.
For example, bond investors are increasingly embracing debt instruments known as covenant lite loans, which provide minimal protection should the issuer get into financial trouble.
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Wednesday, October 12, 2016
Announcing Trader Education Week -- a Free Event to Help You Learn to Spot Trading Opportunities / Interest-Rates / Learn to Trade
By: EWI
Dear Trader,
You have an opportunity to spend the next week learning how you can spot high-confidence trade setups in the charts you follow every day.
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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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Thursday, September 15, 2016
Unprecedented Global Bond Bubble Threatens Holders of Cash / Interest-Rates / International Bond Market
By: MoneyMetals
As big as previous real estate and stock market bubbles have been, the current global bubble in government debt dwarfs them all. Not only is it far bigger in size and scope (some $60 trillion in sovereign bonds now trade globally); it is also unprecedented in character.
The world has rarely seen a bond bull market that is not only 36 years old, but also shows few signs of ending. And never before in recorded history have interest rates gotten so low across the board.
Wednesday, September 14, 2016
The Most Political Fed in History / Interest-Rates / US Federal Reserve Bank
By: Graham_Summers
Minneapolis Fed President Neel Kashkari wants us to believe that the Fed is not a political entity.
Kashkari is either ignoring reality or simply providing cover for the single most political Fed in history. This is not a Left vs. Right issue, this is an establishment vs. legitimate reform issue.
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Saturday, September 10, 2016
Negative Interest Rates Will Kill Economic Growth / Interest-Rates / Negative Interest Rates
By: Peter_Schiff
For years I have argued that ultra-low interest rates act more as an economic sedative than a stimulant. This idea has elicited laughter from the economic establishment. But it is becoming clearer that rates set by central banks that are far below the levels that free markets would have otherwise determined have dragged the world into the economic mud. The simple proof is currently arising in Europe where negative interest rates are now transforming companies from agents of growth, production, and employment into financial sloths that exist solely to borrow money.
Friday, September 09, 2016
‘Helicopter Money Coming’ – Exclusive Interview With Top Hedge Fund Manager Tom Conrad / Interest-Rates / Quantitative Easing
By: Jeff_Berwick
TDV: Hello, Tom, thanks for sitting down with us once again. We last talked to you more than a year ago. At the time you predicted a significant stock market crash and only a month later the Dow reflected your position with a huge intra-day crash. There was huge volatility throughout the fall.
Tom Conrad: Yes, and then again in at the beginning of January of 2016.
TDV: It’s not over yet, of course.
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Thursday, September 08, 2016
Delusional Mark Carney Claims Success for Bank of England's Worthless BrExit Forecasts / Interest-Rates / BrExit
By: Nadeem_Walayat
Britain's very own Tyrion Lanister, The Master of Coin, migrant banker Mark Carney, Governor of the Bank of England stepped forward Wednesday to claim success both for Banks dire forecasts of economic doom, a technical recession in store for the UK economy should Brexit happen AND now also for subsequent surprisingly strong performance of the UK economy that has seen record numbers across several economic measures such as the Purchasing Managers Index (PMI) for August recording its largest jump in its 25 year history, or that the house price crash of 18% has failed to materialise, or that new car sales have leapt 3% against a year ago which is a sign of consumer confidence.
Wednesday, September 07, 2016
How I Got Mark Cuban to Concede That Central Banks Have Cornered the Bond Markets / Interest-Rates / US Bonds
By: Graham_Summers
Mark Cuban just conceded to me that Central Banks have cornered the bond market.
Cuban is a billionaire investor, owner of the Dallas Mavericks, and reality TV star from Shark Tank.
He’s also begun making a series of strange media appearances in which he claims that if Donald Trump wins the US Presidency in November, “I have no doubt in my mind that the market tanks.”
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Tuesday, September 06, 2016
We’re Reaching Point Zero of Debt Creation / Interest-Rates / US Debt
By: Harry_Dent
Forty-five years and counting.We’ve been on a debt spree since the early 1970s when we went off the gold standard, covering every possible angle. Trade deficits, government deficits, unfunded entitlements, private debt – you name it! Our total debt has grown 2.5-times GDP since 1971.
How could economists not see this as a problem? How is this the least bit sustainable?
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Tuesday, September 06, 2016
Ireland “Especially Exposed” To “International Shocks” – Central Bank / Interest-Rates / Financial Crisis 2016
By: GoldCore
Ireland remains especially exposed to another financial shock because of the extremely high levels of public and private debt, the open nature of the economy, and Brexit, Irish Central Bank Governor Philip Lane has warned in a pre-budget letter to Minister for Finance, Michael Noonan.
Read full article... Read full article...“Ireland is especially exposed due to the legacy of high public and private debt levels, the sensitivity of small, highly-open economies to international shocks and Brexit-related vulnerabilities,” Ireland’s Central Bank Governor said.
Sunday, September 04, 2016
Negative Interest Rates and the War on Cash (1) / Interest-Rates / War on Cash
By: Raul_I_Meijer
It’s been a while, but Nicole Foss is back at the Automatic Earth -which makes me very happy-, and for good measure, she starts out with a very long article. So long in fact that we have decided to turn it into a 4-part series, if only just to show you that we do care about your health and well-being, as well as your families and social lives. The other 3 parts will follow in the next few days, and at the end we will publish the entire piece in one post.
Friday, September 02, 2016
30 Year US Treasury Bonds Analysis / Interest-Rates / US Bonds
By: Austin_Galt
We are looking for a final top to the massive bond bull market that began in 1981. While it is possible the final top is in place, I am leaning to one final marginal high before everything goes belly up.Let’s review the quarterly and weekly charts of the 30 Year US Treasury Bond price.
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Wednesday, August 31, 2016
Green Bond Market Will Continue To Grow / Interest-Rates / Renewable Energy
By: Chris_Vermeulen
If a bond has a negative yield, then the bondholders will lose their money on their investment. In the long run, their expectations are lower and consequently they lose the incentive to invest — which may have far-reaching repercussions.
Green Bonds Are Changing Investor Expectation’s
The rapid growth of the green bond market has sparked interest from many audiences.
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Wednesday, August 31, 2016
Debt Bubble in Ireland and Globally / Interest-Rates / Global Debt Crisis 2016
By: GoldCore
Mark O’Byrne, Research Director of GoldCore, was interviewed by Max Keiser about the arrival of negative interest rates in Ireland and Germany, the risk of bail-ins, the return of a rental and property bubble in Dublin, the Irish and global debt bubble and why wealthy individuals and institutions are diversifying into gold.
Wednesday, August 31, 2016
Awareness of Fed Credibility Problems Going Mainstream / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
The nation’s pre-eminent central planners just held their annual gathering at an exclusive resort just outside Jackson Hole, Wyoming and discussed how to interfere even more deeply in markets. In a speech entitled “The Federal Reserve’s Monetary Policy Toolkit: Past, Present and Future,” Fed chair Janet Yellen outlined why zero interest rate policy (ZIRP), purchases of toxic mortgage securities, and monetization of Treasury debt just aren’t adequate. Officials must add negative interest rates (NIRP) and purchases of even more sketchy assets to their “toolkit.”
Yellen has spent more than a year floating the idea of negative rates, so it is no surprise she is hustling the ludicrous policy once again. In fact, very little of what she said Friday is new. It was the usual mess of contradictions.
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Wednesday, August 31, 2016
Why the Convoluted Message From Yellen? / Interest-Rates / US Interest Rates
By: Gary_Tanashian
Why the tough talk out of one side of her mouth and ‘other policy tools’ language out of the other (ref. Yellen Lays Out Tools… )? Oh, I don’t know. Maybe it has something to do with this…
The stock market has merrily followed money supply aggregates upward since 2009. When money supply decelerates the market corrects. When money supply ramps upward the market ramps upward. Money supply has been rolling over since 2014, which was not coincidentally when the first tremors began for the stock market in its recently completed top (that wasn’t). From SlopeCharts…
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Tuesday, August 30, 2016
King of Debt vs. Queen of Deficits / Interest-Rates / US Debt
By: Michael_Pento
The Congressional Budget Office (CBO) estimates the total deficit for fiscal 2016 will be $590 billion. This is $152 billion (34%) greater than the shortfall posted in fiscal year 2015. And by 2026 the deficit would be considerably larger as a share of the nation’s output (GDP) than its average over the past 50 years.
In addition to this, debt held by the public would rise significantly from its already high level, reaching 86% of GDP by 2026.
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Monday, August 29, 2016
President Obama To Leave $20 Trillion Debt Crisis For Clinton Or Trump / Interest-Rates / US Debt
By: GoldCore
President Obama is set to leave a massive near $20 trillion debt crisis for his successor – be that Hillary Clinton or Donald Trump.
The U.S. national debt reached $19.5 trillion last week and has been increasing by roughly $1 trillion a year during his Presidency and during the so called “recovery” as the U.S. government continues to spend money like a drunken sailor.
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Thursday, August 25, 2016
Bond Guru Gary Shilling - The Bond Market Rally of a Lifetime / Interest-Rates / US Bonds
By: John_Mauldin
In 1981, as inflation and Treasury yields were screaming to new heights, my good friend Gary Shilling announced, “We’re entering the bond rally of a lifetime.” He was right. That bond rally is already 35 years old, and I think it will continue.
Gary also thinks the rally is still underway. He backs up that claim with a compelling case for Treasurys and for the “long bond” (the 30 year).
Gary recalls his famous public debate on stocks versus bonds with Professor Jeremy Siegel of Wharton, in 2006. This was just before the Great Recession kicked in and sent Treasury prices sky-high. Siegel remarked to the audience, “I don’t know why anyone in their right mind would tie up their money for 30 years for a 4.75% yield” (the then-yield on the 30-year Treasury).
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Monday, August 22, 2016
Bank of Ireland to Charge for Placing Cash on Deposit / Interest-Rates / Negative Interest Rates
By: GoldCore
Deposits at Bank of Ireland are soon to face charges in the form of negative interest rates after it emerged on Friday that the bank is set to become the first Irish bank to charge customers for placing their cash on deposit with the bank.
This radical move was expected as the European Central Bank began charging large corporates and financial institutions 0.4% in March for depositing cash with them overnight.
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Monday, August 22, 2016
China Announces its’ new loan in International Reserve Asset (SDRs) / Interest-Rates / China Currency Yuan
By: Chris_Vermeulen
The People’s Bank of China (PBOC) has received approval from the World Bank allowing its’ issuance of bonds which are denominated in Special Drawing Rights (SDRs). The World Bank is the first entity to approve of it and consequently marks the launch of the SDR bond market of the worlds’ second-largest economy.
Thursday, August 18, 2016
4 Reasons Not to Buy Bonds Now / Interest-Rates / International Bond Market
By: John_Mauldin
BY JARED DILLIAN : I try to be a long-term thinker and filter out all the short-term noise. That’s hard nowadays, because there is so much short-term noise!
Any one of these four things would be big news, especially in the dog days of summer. But all four? It’s crazy out there.
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Thursday, August 18, 2016
Low / Negative Interst Rate’s Legacy / Interest-Rates / Negative Interest Rates
By: Raymond_Matison
In all of global human history, interest rates have never been this low. Indeed, Europe has trillions of Euro bonds yielding a negative interest rate, meaning that an investor pays for the privilege of having lent to a borrower with its attendant credit exposure, and agrees beforehand to get less in return than he originally “invested”. America’s fixed income yields have been declining for over thirty years, and now are also at record lows – hovering close enough to zero such that some expect negative rates to come to our domestic market in the not too distant future.
Thursday, August 18, 2016
The 45th Anniversary of The Most Destructive Event In Modern Monetary History / Interest-Rates / Financial Markets 2016
By: Jeff_Berwick
The US government, bankrupt yet again after another disastrous war of aggression, had its back pushed to the wall in 1971.
Up until that point, foreign central banks could redeem US dollars directly with the US Treasury in exchange for gold. And, recognizing that the US was essentially bankrupt, foreign central banks, especially France, began to demand gold instead of the dollar.
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Sunday, August 07, 2016
Banker Bunker Mentality, Big US Banks On The Brink / Interest-Rates / Financial Crisis 2016
By: Jim_Willie_CB
The big US banks are dead, as in giant hollow reeds. Such has been the Jackass refrain for eight straight years. They are insolvent monsters and destroyers of wealth and capital. They are massive criminal enterprises. Events prove the case well. The Too Big to Fail policy has instead assured the wreckage and destruction of the USEconomy. Save the big banks, but ruin the capital base. The USGovt under the management of the banker cartel since the 9/11 event, which they orchestrated in a bold move, has systematically brought down the macro business sector, permitted the USDollar platforms to decay completely, and rigged the financial markets in every conceivable arena. The central bankers are running scared. The Jackass wishes they would all depart in exile, locate on a lovely Polynesian island, and eat each other, with the winners wearing their bones and teeth.
Thursday, August 04, 2016
What Student Debt Problem; Simple Solution ends the problem / Interest-Rates / Student Finances
By: Sol_Palha
A problem clearly stated is a problem half-solved. Dorothea Brande
The real issue is that there are college students that don’ want to work and want to go to the best colleges money can buy, and the parents are encouraging this. What happened to the day you went to the college you could afford, and you worked to pay for all of it or, at least, helped your parents. The problem lies with the parents and the kids; the parents are encouraging this asinine behaviour. Today’s generation believe that they are entitled to the best of the best without having to work for it. College Graduates that are drowning in debt, but still refuse to give up on luxuries is a perfect example of this principle in action. Instead of tightening their belts, they continue to add to the debt and then cry wolf when everything starts to fall apart.
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Thursday, August 04, 2016
Don’t Be So Sure That States Can’t Go Bankrupt / Interest-Rates / US Debt
By: John_Mauldin
Our judicial system has a time-tested option for those who can’t pay their debts: bankruptcy. Individuals and businesses use it all the time.
The debtor submits itself to a court, which tries to reach the fairest possible settlement with creditors. It’s messy, but it usually works for the best.
Federal bankruptcy code permits cities, school districts, and other local governments to file bankruptcy.
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Thursday, August 04, 2016
UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
Today is the day when UK interest rates will be cut from 0.5% to probably 0.25%, there lowest levels for over 320 year history of the Bank of England. Which follows over 7 years of rates being held at 0.5% the duration of which has seen virtually ALL economists reveal their true level of ineptitude as they have collectively consistently forecast that UK Interest rates were always just about to head higher, that the start of a series of rate hikes was just months away, which not only never materialised but is now hit with the reality of a RATE CUT! And probably announce an additional QE of at least £50 billion to monetize UK government debt and generate artificial profits for the Bank of England's banking sector brethren.
Tuesday, August 02, 2016
Beware: Central Bankers are Driving Us into the Dirt / Interest-Rates / Global Debt Crisis 2016
By: Harry_Dent
One of the major triggers I’ve been warning about is already happening, even before we understand and/or admit that we are in a recession. Zero Hedge just picked up on an article from Jeff Cox at CNBC.Global corporate debt now sits at a record $51 trillion and is poised to hit $75 trillion by 2020 – just four years away. If interest rates rise and the economy slows, it will be very hard for companies to roll these bonds over – and then we get what S&P Global Ratings is calling “Crexit.”
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Tuesday, August 02, 2016
What You Need to Know If You’re Exposed to Muni Bonds / Interest-Rates / US Bonds
By: Rodney_Johnson
The housing bust was awful, particularly in Florida and other “sand states.” As the economy slowed, consumers lost their jobs, and when they couldn’t pay their mortgages, they then lost their homes.
Even though that wrenching period happened almost a decade ago, it will live in our memories for years to come. I can recall much of the pain, but also other aspects of the moment. Some people were desperate for the relief that came their way; others were using it as cover to game the system.
Tuesday, August 02, 2016
The Yield Curve - 3 Big Stories Not Being Covered With Graham Mehl / Interest-Rates / US Interest Rates
By: Andy_Sutton
It occurred to us as we were laying out the contents of this article that we should probably not assume certain things. This publication has a wide readership, from corporate CEOs to high school students. The former are looking for analysis, the latter to become educated. The topic we are going to tackle in this second installment is a complex one, so some introduction is in order. Therefore, this piece will consist of two parts: an opening introduction, a primer if you will, then the analysis will follow. If you are well-versed in interest rates, bonds, bond yields, and debt, you can probably skip the primer, although we’ve been surprised at the number of people who have subscribed to the misconceptions stated therein.
Monday, August 01, 2016
Central Bankers Fighting An Unprecedented Global Economic Slowdown / Interest-Rates / Central Banks
By: Gordon_T_Long
The mainstream news sources seem determined to ignore the extent of the global slowdown in trade. Whether exports, imports, industrial production or whatever your preferrred metric, the facts are undeniable. Nevertheless, the mainstream media chooses to refuse to cover it. It begs an obvious question of - why?
Monday, August 01, 2016
Former Fed Chairman May Have Given Japan the Answer to Its Debt Problems / Interest-Rates / Global Debt Crisis 2016
By: John_Mauldin
Japan just had its national elections. Voters there do not share the anti-establishment fever that grips the rest of the developed world. They gave Prime Minister Shinzo Abe and his allies a solid parliamentary majority. Japanese are either happy with Abenomics or see no better option.
Abe may now have the backing he needs to change Japan’s constitution and its official pacifism policy. This would be less a sign of nationalism than a new economic stimulus tool. Defense spending is expected to more than double. This will give a big boost to Japan’s shipyards, vehicle manufacturing, and electronics industries.
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Friday, July 29, 2016
Retirees Are Risking Their Life Savings on Junk Bonds / Interest-Rates / Pensions & Retirement
By: John_Mauldin
Retirees and other investors are reaching farther and farther for yield. They’re piling into all sorts of increasingly risky investments. So, it should come as no surprise that credit spreads are shrinking between what in theory are risk-free investments and other investments.
My friend Danielle DiMartino Booth, formerly at the Dallas Fed, covers a range of topics affected by central-bank policies. I think she is going to be an increasingly visible force in the world of central bank critics.
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Friday, July 29, 2016
The Fed Is Preparing for Negative Rates—Here’s the Sign Everyone Missed / Interest-Rates / Negative Interest Rates
By: John_Mauldin
I think it’s possible that the Fed will push rates below zero when the next recession arrives. I explained why a few months ago in my free weekly column, Thoughts from the Frontline, at Mauldin Economics.
In that regard, something important happened recently. And not many people noticed. I’ll do a quick review to explain.
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Friday, July 29, 2016
A Cornered Bank of Japan Shocks Markets. Risk Assets Now Under Threat - Video / Interest-Rates / Japanese Interest Rates
By: Mario_Innecco
I just like to talk about the bank of japan they had a policy meeting today
like the equivalent of the FOMC for the Fed the news came out at a quarter to
midnight sorry quarter to midnight yet new york time or quarter to five a.m. london time
so it actually came out yesterday New York and today in London but that's not
the point a lot of people i think the majority of economist in Japan were expecting a big
surprise by the bank of japan in terms of in terms of lowering even more their
negative interest rates and increasing the size of QE bottom as i read here
from news headlines zerohedge for example says bank of japan shocks market shuns government pressure
leaves q we r & rates unchanged questions policy effectiveness
there's more here from investing.com yen jumps after boj easing fall short of
expectation there is a new stimulus package though the government has
announced after the meeting we've seen new stimulus package by the bank of japan and it's includes a
hundred and thirty billion dollars in fiscal measures
Thursday, July 28, 2016
The Fed's Loud Talk Policy / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
Theodore Roosevelt's famous mantra "speak softly and carry a big stick" suggested that the United States should seek to avoid creating controversies and expectations through loose or rash pronouncements, but be prepared to act decisively, with the most powerful weaponry, when the time came. More than a century later, the Federal Reserve has stood Teddy's maxim on its head. As far as Janet Yellen and her colleagues at the Fed are concerned, the Fed should speak as loudly, frequently, and as circularly as possible to conceal that they are holding no stick whatsoever.
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Thursday, July 28, 2016
FOMC Interest Rates and Their Impact on the US Economy / Interest-Rates / US Interest Rates
By: Charles_Carnevale
To me, interest rates and their future direction seems to be obsessively discussed and debated by many investors. So much so, that I often get the impression that many investors believe that interest rates coupled with Federal Reserve policy are the primary drivers of our economy. From my perspective, interest rates and Federal Reserve monetary policy are contributing factors to economic growth and stability. However, I would stop short of considering them of primary importance.
Wednesday, July 27, 2016
On the Italian and Eurozone Doomsday Scenario / Interest-Rates / Eurozone Debt Crisis
By: Steve_H_Hanke
On June 23rd, the voters in the United Kingdom (UK) turned a collective thumbs-down on the European Union (EU). The Brexit advocates – the ones who had had enough of the EU’s mandates and regulations – won the day. But, this is only the first step on a long and winding exit road. To formally begin its withdrawal from the EU, the UK must trigger Article 50 of the Lisbon Treaty, and the new British Prime Minister, Theresa May, won’t do that before the end of 2016. Once triggered, the UK has two years to negotiate its exit from the EU.The Brexit vote was a surprise that temporarily rocked the markets, sent the pound to a 32 year low, and sent the chattering classes chattering. It also poured fuel on a simmering Italian fire – a fire that could result in an Italian, as well as a Eurozone, doomsday scenario.
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Wednesday, July 27, 2016
Japan's "Helicopter Money" Play: Road to Hyperinflation or Cure Debt Deflation? / Interest-Rates / Quantitative Easing
By: Ellen_Brown
Fifteen years after embarking on its largely ineffective quantitative easing program, Japan appears poised to try the form recommended by Ben Bernanke in his notorious "helicopter money" speech in 2002. The Japanese test case could finally resolve a longstanding dispute between monetarists and money reformers over the economic effects of government-issued money.
When then-Fed Governor Ben Bernanke gave his famous helicopter money speech to the Japanese in 2002, he was talking about something quite different from the quantitative easing they actually got and other central banks later mimicked. Quoting Milton Friedman, he said the government could reverse a deflation simply by printing money and dropping it from helicopters. A gift of free money with no strings attached, it would find its way into the real economy and trigger the demand needed to power productivity and employment.
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Wednesday, July 27, 2016
Are Central Banks Crazy Enough to Think Helicopter Money is the Answer? / Interest-Rates / Quantitative Easing
By: Rodney_Johnson
Central banks around the world have a common problem. They are failures. For the past eight years, central bankers worked tirelessly to generate economic activity. They pushed interest rates below zero and printed trillions of dollars.
And yet, the IMF recently cut its global growth forecast again.
Most economies are stuck in neutral while threats such as the debt crisis in Europe and deflation in Japan keep growing. Now central bankers are talking about a new tool – helicopter cash (free money distributed by a government agency). It won’t work either, but don’t expect that to stop the bankers from trying!
Wednesday, July 27, 2016
Consumption and Debt Will Bring Down the System - Video / Interest-Rates / Global Debt Crisis 2016
By: Mario_Innecco
I like to talk about credit consumption and financial bubbles and also
production which is seems to been forgotten for the last note 20 years or
so especially in the Western countries you know the United States Canada Australia
Europe Japan it seems like the problem - all the solutions in terms of the economy is for
the creation of more credit more leverage more bubbles in order to keep people consuming and creating this
artificial wealth and paying taxes to keep a big bloated government going or
you know creating credit to build Matt weapons you know of war and conflict for
profit and i remember i think it was after the financial crisis and hank.
Monday, July 25, 2016
Japan’s Lemming Central Bank Blindly on the Path Towards Hyperinflation / Interest-Rates / HyperInflation
By: Michael_Pento
The financial world is buzzing about former Fed chairman Ben Bernanke's recent trip to Japan, where he advised Japan's central bank chief Haruhiko Kuroda on how to manage his nation out of multi-decades of stagnant growth. Channeling economist Milton Friedman, Bernanke warned that Japan was vulnerable to perpetual deflation and stagnate growth and that helicopter money--where the government issues non-marketable bonds with no maturity date and the Central Bank buys them with counterfeited credit--was the most useful tool in overcoming this condition.
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Monday, July 25, 2016
The Path to Fed-Exit / Interest-Rates / US Federal Reserve Bank
By: Dr_Ron_Paul
I recently proposed that the liberty movement capitalize on Brexit with "Fed-exit": a campaign to "secede" from the Federal Reserve. Fed-exit could be accomplished with a few simple policy changes.
Passing Audit the Fed is a good first step toward Fed-exit. Contrary to the Federal Reserve's propaganda, auditing the Fed will not reduce the Federal Reserve's mythical "independence." It will simply allow Congress and the people to learn the full truth about the Fed's conduct of monetary policy.
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Thursday, July 21, 2016
Addicted to Debt - We Can’t Borrow from the Future Anymore / Interest-Rates / Global Debt Crisis 2016
By: John_Mauldin
While everyone was talking about Brexit last month, the Bank for International Settlements released its 86th annual report.
Based in Basel, Switzerland, the BIS functions as a master hub for all the world’s central banks. It settles transactions among central banks and other international organizations. It doesn’t serve private individuals, businesses, or national governments.
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Thursday, July 21, 2016
The Bank of Central Banks Reveals the Biggest Threat to the Global Financial System / Interest-Rates / Central Banks
By: John_Mauldin
The Bank for International Settlements (BIS) is in the unique position of serving global economic stability in general… and central banks in particular.
It functions as a master hub for all the world’s central banks. It settles transactions among central banks and other international organizations. It doesn’t serve private individuals, businesses, or national governments
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Wednesday, July 20, 2016
TNX - A little Late But Still Expected / Interest-Rates / US Bonds
By: Ed_Carlson
The high forecast by the Hybrid Lindsay model for early last week was delayed for three days by option expiration. Even if the high is seen today or tomorrow, that would still be within the margin of error for the model. The new high in the Dow probably means that a new Basic Advance began last February but we’ll wait and see what happens during the upcoming pullback before making that “official”.
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Monday, July 18, 2016
Don't Reform the Fed - FedExit! / Interest-Rates / US Presidential Election 2016
By: Dr_Ron_Paul
Opponents of a central bank should take advantage of the post-Brexit vote revival of secessionist sentiments to promote a secession from central banking, or "Fed-exit." Ending the Federal Reserve's monopoly on money is the key to restoring and maintaining our liberty and prosperity.
By manipulating the money supply to fix interest rates, the Federal Reserve engages in price fixing. After all, interest rates are nothing more than the price of money. Like all prices, they communicate information about economic conditions to market actors. Federal Reserve attempts to override the market rate of interest with a Fed-favored rate distort the price signals sent to businesses, investors, and consumers. The result of this distortion is a Fed-created boom, followed by a Fed-created bust.
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Tuesday, July 12, 2016
Could the US Bond Market Bubble Finally Be Ready to Burst? / Interest-Rates / Bond Bubble
By: Harry_Dent
The great commodity bubble has been steadily bursting since mid-2008, but has taken a nosedive since early 2011. It's now down 70% overall, and 80%-plus in industrial commodities like iron ore.Real estate has seen its first bubble burst and it clearly looks like a second one is on the way.
Stocks have now seen a third bubble and the largest burst is still just ahead… but, the question remains: when does it begin in this endless realm of QE and stimulus?
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Monday, July 11, 2016
ECB and BOJ Now Trapped in Endless Counterfeiting / Interest-Rates / Quantitative Easing
By: Michael_Pento
The Fed was able to end its massive $3.7 trillion series of Quantitative Easing campaigns without the stock market and economy falling apart. The end of QE 3, in October of 2014, did cause temporary turmoil in the major averages; but all in all, it did not lead to a protracted market decline, nor did it immediately send the economy into a recession.
The consensus view then became that the Fed’s strategy of unprecedented interest rate and monetary manipulations was a huge success, and it would be able to slowly raise the Fed Funds rate with impunity.
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Saturday, July 09, 2016
10-Year Treasury Bond At All-Time Low...Explains Stocks Bull Market... / Interest-Rates / US Bonds
By: Jack_Steiman
We have been going nowhere for a couple of years. Within that process the emotions of all traders were tested over and over. Many times it appeared that the market was about to break down. Action was terrible on price and their oscillators, and that bad action was accompanied by poor economic reports. One after another, they came in poorly. Just when all hope seemed lost for the bulls they'd pull some magic trick, also known as fed-magic dust. A QE program here. A bail out there. Low rates forever everywhere kept the markets from breaking down. It was good to be the fed. You needed a bull to keep the economy going through those 401K reports. It didn't always work though because the market couldn't break out.
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Saturday, July 09, 2016
Dead Pulses & Urgent Systemic Reform / Interest-Rates / US Bonds
By: Jim_Willie_CB
Several important factors work in a powerful manner to debilitate, to distort, and to wreck the global financial and economic system. It is long past the point of effective remedy. After the Lehman kill event, every conceivable wrong move and policy was made and implemented. The investment in the corrupt elements has been so profound in the last several years, as to make remedy impossible. The official policies have been so errant and heretical, as to make remedy impossible. The distortions with the broken elements have been so dedicated in service to the ruling banker class, as to make remedy impossible.
Thursday, July 07, 2016
Europe In Chaos - Can You Imagine The Fed Raising Interest Rates In This World? / Interest-Rates / Credit Crisis 2016
By: John_Rubino
Two short months ago it was generally expected that US interest rates would rise for the balance of the year — a move made possible by steady economic growth and general global stability. Here’s a representative piece of reporting from early April:
Monday, July 04, 2016
Federal Reserve Quantifornication Revisited / Interest-Rates / US Federal Reserve Bank
By: Richard_Mills
Californication is a brilliant 1999 song by the Red Hot Chili Peppers. Many of the lyrics reference the often insane, unrealistic, impossible dream images Hollywood sells to the world.
"Space may be the final frontier but it's made in a Hollywood basement."
Quantifornication is the term I coined for what the Federal Reserve is selling to the world - the unrealistic, insane fiat dream that the monetary policy employed by the Fed can fix the predicament we are in.
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Friday, July 01, 2016
UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The establishments operation fear had painted a relentless propaganda picture all year for a significant rise in UK interest rates following a Brexit outcome that was destined to send consumer borrowing rates soaring, which at the time I repeatedly warned was just NOT going to happen for the fundamental reason that BrExit induced uncertainty would make a rate hike LESS likely as the last thing the Bank of England would want to do is to add to market uncertainty i.e. the complete opposite to REMAIN propaganda. In fact I stated that a BrExit could even result in a rate CUT as the following excerpt illustrates:
Wednesday, June 29, 2016
The Fed’s Money Printing Brings a Strange Outcome / Interest-Rates / Quantitative Easing
By: Rodney_Johnson
I keep reading that the U.S. debt is out of control. That we’re spiraling toward a certain financial death, evidenced by the fact that we now owe more than 100% of annual GDP.According to a recent study by Rogoff and Reinhart, this is well beyond the threshold of where economies struggle. And we’re not alone. Several other countries have the same high level of debt outstanding, and Japan is at the top of the list, owing almost 250% of GDP. Clearly, we’re all going to die.
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Tuesday, June 21, 2016
Here’s Why German Banks Consider Hoarding Billions of Euros in Vaults / Interest-Rates / War on Cash
By: John_Mauldin
One of Germany’s largest banks is seriously considering stockpiling cash. Sources within Commerzbank have told Reuters they are “examining the possibility” of hoarding billions of physical euros in secure vaults.
This is truly bizarre. Under normal conditions, holding cash is anathema to commercial bankers. They keep as little as possible on hand; they certainly don’t go out of their way to hold more.
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Wednesday, June 15, 2016
Central Bankers Are Wrong About Inflation and Deflation / Interest-Rates / Central Banks
By: Frank_Shostak
The majority of economists view deflation as a general decline in prices of goods and services. This is viewed as a major threat to the public’s well-being for deflation is seen as a major factor that plunges the economy into an economic depression. Most of them are of the view that central banks and governments’ worldwide must aggressively fight the possible emergence of deflation. This way of thinking stems from an erroneous view of what deflation is. As a result, it is overlooked that it is not deflation but rather monetary pumping which is the root of economic hardship.
Saturday, June 11, 2016
Final Top Of US Bond Bull Market Set For 3rd Qtr of 2016 / Interest-Rates / US Bonds
By: Austin_Galt
The 30 Year US Treasury Bond market has been trending up since 1981. This massive bull market is set to reach its conclusion next quarter if my analysis is correct.
Let's analyse the technicals of both price and yield of the 30 Year US T-Bond. We'll begin with the longer term quarterly chart of price.
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Friday, June 10, 2016
Central Banks Inflating an Epic Bond Bubble - Video / Interest-Rates / Liquidity Bubble
By: Mario_Innecco
hi it's Friday a June tenth 2016
malekko 64 here home of alternative economics and contrarian view
i'm going to cover the sovereign bond market today or government bond market
mainly because we're hearing more and more how trillions and trillions of
government bonds are yielding a negatively
right now they have negative yields and right now we're up to 10 trilling about
10 trillion and i think is good about to get big bigger than the number and it's
mainly in Europe and Japan and there's a story from two days ago in the aft
uh-huh and it says Japan's BTM you threatens to quit jgb primary dealers
club bank of tokyo-mitsubishi is the biggest bank in Japan they're
threatening to quit as a primary dealer of japanese government bonds primary
dealers basically they buy government bonds when the government issues it and
then they take it on their books and then they try to sell it on to their clients...
Friday, June 10, 2016
U.S. 30-year Bond Yield Breaks Down / Interest-Rates / US Interest Rates
By: Anthony_Cherniawski
Not only has the 10-year, but also the 30-year Treasury bond rate fallen beneath its Triangle trendline and challenging new lows not seen since the February market lows. It, and TNX are due for a Master Cycle low in the next three weeks. There may be a brief bounce in the next 24 hours, but the decline should resume shortly after.
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Wednesday, June 08, 2016
Two Months Ago, theThe Only Thing That Grows Is Debt / Interest-Rates / Global Debt Crisis 2016
By: Raul_I_Meijer
Two months ago, there was a referendum in Holland about an association agreement between the EU and Ukraine. A relatively new Dutch law states that with an X amount of signatures a referendum can be ‘forced’ by anyone. Before, during and -especially- after the vote, its importance was -and is actively being- pooh-poohed by both the Dutch government and the EU. That in itself paints the issue better than anything else. Both the call and the subsequent support for the referendum stem from resistance against exactly that attitude.
Wednesday, June 08, 2016
Pensions In The UK and EU Going Bankrupt – Slow Motion Detonation of Pensions Timebomb - Video / Interest-Rates / Eurozone Debt Crisis
By: GoldCore
Pensions in the UK, EU and internationally will go bankrupt as the long awaited ‘pensions time bomb’ detonates in slow motion.
Max Keiser and Stacy Herbert discuss the end of retirement which many Americans, Britons, Europeans and others will suffer as their pensions are decimated in the coming years due to zero percent interest rates and ultra loose monetary policies pursued for the benefit of banks and corporations.
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Tuesday, June 07, 2016
Fed Interest Rate Hikes Lather. Rinse. Repeat / Interest-Rates / US Interest Rates
By: Peter_Schiff
Stop me if you've heard this one before: A Fed official walks into a bar and says the economy is improving and rate hikes are appropriate. The patrons order another round to celebrate. Then disappointing data comes out, the high fives stop, and the Fed official ducks out the back...only to come back the next day saying the same thing. Anyone who pays even the smallest attention to the financial media has experienced versions of this joke dozens of times. Yet every time the gag gets underway, we raise our glasses and expect the punch line to be different. But it never is. Last week was just the latest re-telling.
Tuesday, June 07, 2016
Fed's Interest Rate Normalization Will Be Far From Normal / Interest-Rates / US Interest Rates
By: Michael_Pento
The Fed traditionally embarks on an interest rate tightening cycle when inflation has started to run hot. This decline in the purchasing power of the dollar will nearly always manifest itself in: above trend nominal GDP, rising long-term interest rates and a positively sloping yield curve. These prevailing conditions are all indications of a market that is battling inflation; and thus prompts the Fed to start playing catch up with the inflation curve.
Monday, June 06, 2016
U.S. Jobs Report Means Don’t Bank On Interest Rate Hikes! / Interest-Rates / US Interest Rates
By: Chris_Vermeulen
This past Friday, June 3rd, 2016, The Bureau of Labor Statistics released their most recent report regarding new employment data and nonfarm payroll employment which indicates that during May of 2016, it was the smallest increase seen in 28 months.
During May of 2016, there were 144,592,000 payroll jobs within the US, which was up by 1.6 percent, or equivalent to 2.3 million jobs, from May of 2015 (These are all not-seasonally-adjusted numbers).
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Thursday, June 02, 2016
Race to the Bottom Gaining Traction: Negative Interest Rates Amplify Currency Wars / Interest-Rates / Currency War
By: Sol_Palha
Ability is a poor man's wealth. M. Wren
If you had told individuals before 2009 that we would be living in a negative rate environment in the near future, most would have treated you like a lunatic that just escaped from Ward 12. Fast forward a few years and viola, bankers all over the world are embracing negative rates. China devalued the Yuan once again, adding further fuel to the already blazing fire. The Fed will have no option but to lower rates and then Jump onto the negative rate bandwagon. Don’t listen to the nonsense the Fed has been mouthing for months that all is well. We can already see the all is good slogan breaking down to “it’s not as good as we thought" slogan; this will eventually change to “oh my God it’s darn right ugly out there” and we need to lower rates to prevent a catastrophe slogan.
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Wednesday, June 01, 2016
The $6 TRILLION Corporate Debt Implosion Begins... / Interest-Rates / Corporate Bonds
By: Graham_Summers
The corporate bond market is a $6 trillion time bomb waiting to go off.
It took the US half a century to grow its corporate bond market to $3 trillion.
Thanks to the Fed implementing ZIRP and holding rates there for seven years, we’ve doubled the corporate bond market, adding another $3 trillion in corporate debt… since 2009.
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Tuesday, May 31, 2016
10 Questions About our Broken Financial System / Interest-Rates / Financial Crisis 2016
By: DeviantInvestor
Bonds look like a bubble in search of a pin. What if global bonds are revalued lower to account for the following?
- Probability of repayment in a currency that will maintain its purchasing power for the lifetime of the bond.
- Probability of responsible fiscal management by the governments of the bond issuing countries.
- Probability of repayment without rolling over those bonds by creating EVEN MORE UNPAYABLE
- Actual positive yield.
Sunday, May 29, 2016
“Debt, Not The Economy, Reaches Escape Velocity” With Graham Mehl / Interest-Rates / Credit Crisis 2016
By: Andy_Sutton
One of the biggest buzz-terms of the falsetto, faux recovery has been ‘escape velocity’. If there are any NASA engineers left, they can correct me, but I believe the term was used in physics or perhaps rocket science to describe the velocity an object must reach to break the hold of the Earth’s gravity. And you think Economics has some formulas? I’d LOVE to see the one for the real escape velocity.
Getting back to the economic version of rocket science (don’t even tell me that isn’t funny), we have been hearing the term for the past several years. Ironically it started with the central banking crowdlthough they never quite told us what exactly the economy had to do to accelerate beyond the grasp of the ‘great recession’.
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Sunday, May 29, 2016
Billionaire Gross: Jubilee Debt Relief as Prelude to New Global Economic Order / Interest-Rates / Global Debt Crisis 2016
By: Jeff_Berwick
Bill Gross just made headlines by explaining that Japan was bankrupt and its central bank would have to acquire the nation’s debt and then “forego repayment.”
What billionaire Gross is talking about here is a debt jubilee. And we’re not surprised. We’ve predicted this after all. I’ve often said that Japan will be the first to fall.
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Friday, May 27, 2016
The 5 Fatal Flaws of Trading / Interest-Rates / Learn to Trade
By: EWI
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit -- and more importantly, do it consistently. How do they do that?
That's an age-old question. While there is no magic formula, Elliott Wave International's own Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don't claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person's life. Maybe you'll find one in Jeffrey's take on trading. We sincerely hope so.
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Thursday, May 26, 2016
Cash Holdings of Apple and Other Tech High Fliers Are A Massive Risk in This Debt Jubilee Era / Interest-Rates / Credit Crisis 2016
By: Jeff_Berwick
Throw every “norm” out the window. This Keynesian, central banking world has everything so distorted that nothing makes sense anymore.
There are currently more than $7 trillion in bonds, worldwide, offering a negative interest rate. Wrap your head around that! People are actually paying trillions of dollars to give their money to mostly bankrupt governments with the promise they will receive less at a later date.
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Thursday, May 26, 2016
Bill Gross on the Fed, Short Credit, Japan and more / Interest-Rates / Global Financial System
By: Bloomberg
Janus Capital Management Fund Manager Bill Gross was interviewed by Erik Schatzker at the 2016 Blooomberg Fixed income Event at the Beverly Hills Hotel in California.
Gross shared his thoughts on: whether the Fed will move in June, how much that matters, Janus’ performance, trying to short credit, hedge fund fees, Japan’s fiscal policy and the currency market.
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Wednesday, May 25, 2016
U.S. Household Debt Still Below 2008 Peak / Interest-Rates / US Debt
By: Mike_Shedlock
Household Debt Summary
- Household debt for the first quarter of 2016 is up $136 billion.
- Mortgage debt, up $120 billion, accounts for most of the gain.
- Student loan debt, up $29 billion, accounts for most the rest.
- Total household debt still below 2008 peak
Monday, May 23, 2016
Why Aren't Venezuelan Interest Rates Going Negative Like in Europe? / Interest-Rates / Venezuela
By: Mario_Innecco
Monday May 23rd 2016 I'm gonna talk about Venezuela is mainly because we've
been you know bombarded in the last few months which stories in the mainstream
and alternative media about hyperinflation Venezuela societal
collapse people killing packs to eat you know loads of horrible stories and I'm
not saying they're not true they are and Venezuela though is a fairly rich
country know you look at their GDP per capita has hired in China I know they
have a lot of oil revenue but it's still not a poor country and the main theme
and even Zero Hedge who blog I read it and I really enjoy what they talked
about and how you analyze things they've caught you know they've been trapped by....
Thursday, May 19, 2016
Bank Bail-Ins Pose Risks To Retail Depositors / Interest-Rates / Credit Crisis 2016
By: GoldCore
Bank bail-ins pose risks to retail investors and especially savers throughout the western world. The new bail-in rules have been made operational since the beginning of this year in the EU and in many other countries yet the risks and ramifications of bail ins have been largely ignored in most of the media.
Thursday, May 19, 2016
The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold / Interest-Rates / US Interest Rates
By: Michael_Swanson
Yesterday the stock market and gold prices fell into their closing bells after the release of minutes of the Federal Reserve’s April meeting.
The Federal Reserve did not raise interest rates at that meeting, but the minutes showed that some Federal Reserve Board members hope to raise interest rates in June.
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Wednesday, May 18, 2016
An Incredibly Simple, Rarely Used Way to Book 170% Investing Gains / Interest-Rates / Learning to Invest
By: Casey_Research
By Dan Steinhart
Editor’s note: You’ll find a very important theme running through the Dispatch over the next five days…
We’re going to discuss the secrets of Casey Research founder Doug Casey’s wildly successful investment strategy…one that has made him tens of millions of dollars in the markets. For each of the next five days, you’ll receive an essay about how this strategy can potentially add tens of thousands of dollars a year to your investment returns…
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Tuesday, May 17, 2016
Could the National Debt Really Grow as High as $31 Trillion by 2023? / Interest-Rates / US Debt
By: Harry_Dent
It just seems like human nature to ruin a good thing.As much as I am a strong proponent of free market capitalism, and against complex regulations and central planning, I understand government’s role in all this.
Capitalism and democracy teamed up in the late 1700s to form the big bang in economics, or what I call “When Harry met Sally.”
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Monday, May 16, 2016
How Stupid Do You Have To Be, Part 2: 100-Year Bonds / Interest-Rates / Global Debt Crisis 2016
By: John_Rubino
“Of course there are true copper bottomed mistakes, like spelling the word “rabbit” with three m’s, or wearing a black bra under a white blouse, or, to make a more masculine example, starting a land war in Asia.” — John Cleese
We all make mistakes, but some are bigger than others. An example of a serious one that’s both potentially catastrophic and easily avoided is to lend money for long periods during a time of rising debt and financial instability. Who, for instance, would commit capital for 30 years to Italy by buying that country’s long-dated government bonds? “No one” is the sane answer, yet those bonds do find buyers.
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Monday, May 16, 2016
Why Puerto Rico Defaulted and Greece Did Not / Interest-Rates / Global Debt Crisis 2016
By: Michael_Pento
The Caribbean island of Puerto Rico is in the throes of a debt crisis that recently reached a breaking point when it missed a $422 million bond payment due May 2nd. When asked in a subsequent interview about the likelihood of making future payments on the remaining $72 billion of debt, Puerto Rican Governor Alejandro Garcia Padilla noted that the U.S. territory “does not anticipate having the money.”
Saturday, May 14, 2016
The Fed Is Finally Coming Clean About Inflation / Interest-Rates / Inflation
By: Graham_Summers
For years the Fed has been lying about inflation.
There are many methods of doing this, but the simplest was to use a “measure” of inflation that did not actually measure inflation at all.
This is the famous Consumer Price Index of CPI. It is meant to measure inflation, but ignores obvious costs of living items like food and energy usage.
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Friday, May 06, 2016
Print or Die. The Central Bankers' Dilemma - Video / Interest-Rates / Central Banks
By: Mario_Innecco
Hi its Friday May 6th 2016 so it's the first Friday of the month and usually
that means non-farm payrolls in the us- or the jobs data and yeah was
disappointing number for the you s economy jobs rose by a hundred non-farm
payrolls rose by a hundred and sixty thousand I was expected to be above
$200,000 $205,000 employment rate which is totally fictitious number status 5%
to reel in double double digits the other thing that's pretty bad for the economy and it shows that the USA
economy not only us' but you know the Western world economies are you know
haven't recovered from the collapsible wait prime age workers this is a story
Thursday, May 05, 2016
Struggling Global Economy It's the Debt, Stupid! / Interest-Rates / Global Debt Crisis 2016
By: Mike_Shedlock
For those still wondering why the global economy is struggling, the simple answer is "It's the debt, stupid."
We will return to the global economy in a moment, but first consider the plight of Greece.
A detailed study shows that of €215.9 billion in Greek aid, only €9.7 billion went to Greece. The rest went to banks and other creditors.
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Wednesday, May 04, 2016
Interest Rates: Ten-year US Treasury / Interest-Rates / US Bonds
By: Ed_Carlson
TNX (the yield on the 10 year, US Treasury note) fell 3.65% to close at 18.19 on the 30-dma last week. Look for a bounce with equities early this week but don’t expect it to be sustained as the daily Coppock is still high enough to expect a top, not a bottom. Resistance is near 20.00. Look for support at Friday’s close. A break of this level opens the door for a return to the April low near 17.00.
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Friday, April 29, 2016
Fed's Kaplan: Brexit to Factor in US June Interest Rate Decision / Interest-Rates / US Interest Rates
By: Bloomberg
Federal Reserve Bank of Dallas President Robert Kaplan spoke with Bloomberg Television's Betty Liu, Mark Barton, and Michael McKee today. He discussed his expectations for a consumer rebound, his support of a rate hike if GDP and jobs data come together, and how the U.K. Brexit debate will factor into the Fed's next interest rate decision.
On how much Brexit will influence the Fed, Kaplan said: "It'll be a factor...Our meeting is the 15th and 8 days later is the vote. I'm going to have to make an assessment on June 15 what the likelihood is, and right now, it's a little bit unclear -- or it's unclear. Forget a little bit, it's unclear. And if it's still unclear on June 15, that's going to be a factor."
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Thursday, April 28, 2016
Monetary Policies Misunderstood / Interest-Rates / Money Supply
By: Steve_H_Hanke
Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around taper talk. Will the Fed raise rates, or won’t it? Each time a consensus congeals around the answer to that question, all the world’s markets either soar or dive.This obsession with taper talk – the interest rate story – is simple, but strange. Indeed, it is misguided – wrongheaded. So, why the obsession? It is, in part, the result of a Keynesian hangover. The Keynesians focus on interest rates. The mainstream macro model that is widely in use today is referred to as a “New Keynesian” model. The thrust of monetary policy in this model is entirely captured by changes in current and expected interest rates (the price of money). Money is nowhere to be found, however.
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Wednesday, April 27, 2016
BlackRock’s Fink: Fed to Raise Interest Rates by Quarter Point ‘at Best’ / Interest-Rates / US Interest Rates
By: Bloomberg
Larry Fink, Chairman and CEO at BlackRock, spoke with Erik Schatzker on 'Bloomberg <GO>' this morning.
Fink said governments need to embark on fiscal stimulus to boost the economy: "If we continue to have what I would call a dependency on monetary policy worldwide, I think it is very grim. We are harming savers worldwide with low and negative interest rates." He said monetary policy has "run out of runway" and called the Bank of Japan's negative rate policy an "outright mistake."
He said the Fed will raise interest rates "at best" by another quarter point this year because of weak corporate earnings and uncertainty about the global economy: "I would probably lean more towards a 25 basis point increase. Let's see what happens with the Spanish elections in June, the Brexit elections in June, how the U.S. economy performs in the second quarter. And importantly, what is the consumer's mood into the primaries and after the primaries?"
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Tuesday, April 26, 2016
Fed Induced Bond Bubble Will Devastate Financial System - Video / Interest-Rates / Liquidity Bubble
By: Mario_Innecco
Transcript Excerpt:Hi it's a Tuesday April 26 2016 I'm gonna be talking about a subject a
little bit technical but I think people need to know about this and it's to do
with central banks and you know what the bond markets so in my opinion central
banks they planted or clean been planting the seeds of a bond market
meltdown with the zero interest rate policy and the negative interest rate
policy and by the bond markets I mean government bond markets which are
supposedly risk-free assets are not of course and then corporate bonds you know
all kinds of ratings you know junk bonds but our focus on the bond market
government bond market because that's the biggest market in the world so the
policy observed with zero interest rates implemented through quantitative easing
and officially set raids has resulted in the bond market but never seen before in
the history of financial markets basically the only way to get interest
rates were is to buy bonds because the ruling bond bond prices and yields is
that the bond price goes up goes down if the deal goes up ...
Monday, April 25, 2016
US Bonds Nearing Their All-time High / Interest-Rates / US Bonds
By: Anthony_Cherniawski
USB futures are lingering at their lows from Friday. The Cycles Model suggests a Trading cycle low may be made at any time in the next 72 hours. What may follow is a ramp to the average target of the Bullish Flag formation.
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Monday, April 25, 2016
US Debt Hotel California or the Hotel Marriner Eccles / Interest-Rates / US Debt
By: DeviantInvestor
In 1977 the Eagles spoke to us about “Hotel California.” Lyrics are here.
A few lines from the song …
“On a dark desert highway, cool wind in my hair…
Up ahead in the distance I saw a shimmering light…
Then I was thinking to myself this could be Heaven or this could be Hell…
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Wednesday, April 20, 2016
End Of The Petrodollar: Saudi Arabia Threatens To Dump $700b In Treasuries If Blamed For 9/11 / Interest-Rates / US Bonds
By: Jeff_Berwick
Every day a new major piece of news comes out showing a system that is on the verge of collapse… and a planned shift to a new global order. In the last two weeks alone, all of this has occurred:
Monday, April 18, 2016
Loan Rates on the Rise for the First Time this Year / Interest-Rates / Debt & Loans
By: MoneyFacts
Personal loans have become increasingly competitive over the last few years with considerable rate cuts resulting in some of the lowest rates ever seen. However, it now appears that some providers can no longer sustain such low prices, so rates are once again on the rise.
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Monday, April 18, 2016
Helicopter Money to the Rescue / Interest-Rates / Quantitative Easing
By: Frank_Hollenbeck
Following the unconventional monetary policy of negative interest rates, central banks are now considering an even more desperate measure: “helicopter money.” Milton Friedman is credited with this idea:
Read full article... Read full article...Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.
Wednesday, April 13, 2016
Janet Yellen Meets With Obama In Emergency Meetings As Crises Erupt Worldwide / Interest-Rates / Credit Crisis 2016
By: Jeff_Berwick
The Credit Suisse Fear Barometer just hit an all-time high as reports circulated through the alternative media that Barack Obama discussed the imposition of martial law when he and Vice President Joe Biden met with Yellen on Monday in an “emergency meeting.”
The reports may be exaggerated but not the crisis-like feel of the meetings. This was reportedly a first: having the president and VP meeting directly with the Fed head. Does it have something to do with the “survival of the government” at a time when the US banking system may be facing a general default? According to some reports: “Members of the House and Senate are said to have been ‘up all night’ in discussions and meetings; with floods of phone calls back and forth. ”
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Tuesday, April 12, 2016
Panama Papers and the War on Savings, Bail-Ins, Push to Go Cashless / Interest-Rates / War on Cash
By: Ellen_Brown
Exposing tax dodgers is a worthy endeavor, but the "limited hangout" of the Panama Papers may have less noble ends, dovetailing with the War on Cash and the imminent threat of massive bail-ins of depositor funds.
The bombshell publication of the "Panama Papers," leaked from a Panama law firm specializing in shell companies, has triggered both outrage and skepticism. In an April 3 article titled "Corporate Media Gatekeepers Protect Western 1% From Panama Leak," UK blogger Craig Murray writes that the whistleblower no doubt had good intentions; but he made the mistake of leaking his 11.5 million documents to the corporate-controlled Western media, which released only those few documents incriminating opponents of Western financial interests. Murray writes:
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Tuesday, April 12, 2016
One Chart Reveals Fed's True Intent; Wreck Havoc on The Middle Class / Interest-Rates / Quantitative Easing
By: Sol_Palha
"Crises refine life. In them, you discover what you are." ~ Allan K. Chalmers
What strikes one immediately is that the Fed has been creating money hand over fist; one hand they create money, with the other hand they buy assets and put it on their books, all looks well until you realize this is something called monetization of debt. Paper buying more paper and in most nations this leads to hyperinflation and a currency collapse. However as the Dollar is the world reserve currency. The Fed can magically create money out of thin air and use this newly created money to pay bills and or prop up markets as is currently the case.
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Monday, April 11, 2016
Subprime Debt Makes a Comeback; Auto Loan Crisis is Here / Interest-Rates / Global Debt Crisis 2016
By: Sol_Palha
"A great calamity is as old as the trilobites an hour after it has happened." ~ Oliver Wendell Holmes
Greed and recklessness continue to govern the markets; nothing was learned from the 2008 financial crisis. Hence, history is destined to repeat itself, and this might occur a lot faster than most anticipate. Fitch states that Subprime Auto bond delinquencies are at a 20 year high.
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Thursday, April 07, 2016
Bullard - Fed Reserves the Right to Change U.S. Interest Rate Policy at Any Time / Interest-Rates / US Interest Rates
By: Bloomberg
St. Louis Federal Reserve President James Bullard spoke with Bloomberg Radio's Kathleen Hays today on Bloomberg Radio & Television. While Bullard said he "didn't want to prejudge" whether the committee could act in April, the St. Louis Fed official said last month's employment report showed "continuing improvement" in the labor market.
Bullard said the Fed reserves the right to change policy at any time: "Not only have we moved at all kinds of different meetings, we've actually had inter-meeting meetings, special meetings, and moved at those meetings. So you can do a lot of things. You know, I'm not saying we're I'm planning on that or anything, but the Committee certainly reserves the right to make a move at any time... We debate at all meetings. I think all meetings are live meetings. There's no other way to think about it."
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Saturday, April 02, 2016
Wall Street is Coo-Coo for CoCo Bonds - Learn why these new bonds are such risky instruments / Interest-Rates / International Bond Market
By: EWI
The co-editor of our monthly Elliott Wave Financial Forecast newsletter tells you about the emergence of the so-called CoCo bonds, one of the hottest new derivative-backed instruments on Wall Street.
Listen as Peter explains what differentiates them from regular bonds -- and why they're so risky to own.
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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…
Friday, March 11, 2016
ECB Panic Money Printing to Save Euro-zone from Economic Collapse as BrExit Looms / Interest-Rates / Negative Interest Rates
By: Nadeem_Walayat
A little over a month on from the Bank of Japan's panic announcement of negative interest rates and money printing. Now it's the turn of the ECB to PANIC by firing it's own inflation bazooka in what is commonly termed as the currency wars (competitive devaluations) as nations attempt to import inflation and export deflation by means of manipulating exchange rates. This weeks ECB PANIC followed euro-zone inflation turning negative again (CPI -0.2%) and with virtually the whole of southern europe in a permanent economic depression, with debt mountains continuing to balloon in a perpetual state of imminent bankruptcy of the whole of southern europe as ALL central banks ONLY really have ONE objective which is to INFLATE debt mountains away for which they CREATE INFLATION by means of MONEY PRINTING and so without inflation the debt cannot be serviced.
Tuesday, March 08, 2016
U.S. Treasury Shorts Pounded into the Ground / Interest-Rates / US Bonds
By: Anthony_Cherniawski
This has got to be a decline for the records. There is nothing else like it in this chart. The treasury shorts are getting nailed.
ZeroHedge reports, “Over the past week we have been following a disturbing development in the US Treasury market: while the repo rate on the 10Y has been sliding deep into negative territory for a while, on Friday it finally hit the "fails charge" of -3.00%, suggesting there is a massive shortage of Treasury paper as a result of wholesale shorting by various market participants.
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Saturday, March 05, 2016
More and More Fed Officials Calling For NIRP / Interest-Rates / US Interest Rates
By: Graham_Summers
The Fed Vice-Chair has begun laying the groundwork for NIRP.
The US Federal Reserve is obsessed with market reactions to its policies. Because of this, anytime the Fed plans to announce a major change in policy, it preps the markets via numerous leaks and hints… oftentimes for months in advance.
An excellent example of this concerns the Fed’s decision to taper QE back in 2013.
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Saturday, March 05, 2016
Financial Repression - Margin Rules Changes Force New Private Funding of Public Debt / Interest-Rates / US Debt
By: Gordon_T_Long
FRA Co-Founder Gordon T. Long and Dan Amerman have an in-depth conversation covering various topics such as Financial Repression, Quantitative Easing, devious actions of the Fed and much more.
Read full article... Read full article...Daniel R. Amerman is a Chartered Financial Analyst, author, and speaker, with BSBA and MBA degrees in Finance, and over 30 years of professional financial experience. As an investment banking vice president in the 1980s he did groundbreaking work in the security originations and asset/liability management areas, including CMO/REMIC originations as part of portfolio restructurings for financial institutions, as well as the creation of synthetic securities for institutional clients. As an independent quantitative analyst in the 1990s and 2000s, he structured mortgage-backed bond financing and provided analytical services for real estate acquisitions by multifamily and commercial real estate owners, investment banks, and tax-exempt issuers.
Friday, March 04, 2016
Short Squeeze in Treasuries? / Interest-Rates / US Bonds
By: Anthony_Cherniawski
Day 43 came and went with a small throw-over of the trendline at the close. This final thrust made 21 waves (an impulse) from 1931.88 to today’s close, so I don’t see how they can add any more waves to it.
The normal amount of time in a counter-trend rally is 21 days in a bear market, and often much shorter. Today is day 21 from the February 11 low, so it appears to have fulfilled the time requirement. One of my Swing Models suggested February 26 would give us the turn, but it is now 6 calendar days overdue. Since tomorrow is 4.3 market days from my projected “swing high,” I had originally suggested that tomorrow would be the first low of the decline. I will eat crow over that call.
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Thursday, March 03, 2016
Fed Stuck Between Hard Place and a Grenade / Interest-Rates / US Interest Rates
By: Sol_Palha
He who trims himself to suit everyone will soon whittle himself away. Raymond HullThe Fed is stuck in between a hard place and a grenade, given this option, they will choose the hard place as unless you are looking for a one-way to ticket to nowhere you won’t choose the grenade. The Fed has nowhere to go; there is only one option available inflate the money supply or die trying to.
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Thursday, March 03, 2016
How Does Sam Afford to Buy So Much Stuff? / Interest-Rates / US Debt
By: MISES
Mark Brandly writes: Lately, I’ve wondered how my neighbor, Sam, affords to buy so much stuff. He appears to have an unlimited budget. When I asked him about this, Sam asked, “Do you think I’m spending too much?”
“That depends,” I said, “How much money do you make?”
“I take home $100,000 a year.”
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Wednesday, March 02, 2016
Understanding the Federal Reserve’s Shell Game / Interest-Rates / US Federal Reserve Bank
By: MISES
Dan Sanchez writes: The Federal Reserve is a key component of the American Transfer State. Under the guise of “macroeconomic management,” it redistributes vast amounts of wealth on an ongoing basis through inflation. The victims of these transfers are ordinary Americans. The beneficiaries are the government and its elite cronies.
Monday, February 29, 2016
Irish Bonds Fall as Election Creates Political and Economic Uncertainty / Interest-Rates / International Bond Market
By: GoldCore
Irish bonds fell today and the yield on ten-year Irish bonds rose to 0.908 pc, up from 0.891 pc in early trading this morning after a divisive general election and inconclusive result threw Irish politics into disarray and created considerable political and economic uncertainty.
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Sunday, February 28, 2016
The Fed is Working to Implement NIRP / Interest-Rates / NIRP
By: Graham_Summers
The Fed Vice-Chair has begun laying the groundwork for NIRP.
The US Federal Reserve is obsessed with market reactions to its policies. Because of this, anytime the Fed plans to announce a major change in policy, it preps the markets via numerous leaks and hints… oftentimes for months in advance.
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Thursday, February 25, 2016
Central Banks Should Stop Paying Interest on Reserves / Interest-Rates / Central Banks
By: MISES
Brendan Brown writes: In 2008, the Federal Reserve began paying interest on reserve balances held on deposit at the Fed. It took more than seven decades from the US leaving the gold standard — in 1933 — for the fiat regime to do this and thus revoke a cardinal element of the old gold-based monetary system: the non-payment of any interest on base money.
Tuesday, February 23, 2016
The Fed's Nightmare Scenario / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
Operating under the mistaken belief that a modest dose of inflation is either a prerequisite for, or a by-product of, economic growth, the nation's top economists have been assuring us for quite some time that inflation will stay very low until the currently mediocre economy finally catches fire. As a result, they believe that the low inflation of the past few months has frustrated Federal Reserve policy makers, who have been supposedly chomping at the bit to keep hiking rates in order to restore confidence in the present and to build the ability to cut rates in the future if the nation were to ever, god forbid, enter another recession.
Monday, February 22, 2016
Are Asian Central Bankers Even Crazier Than Our Own? / Interest-Rates / Central Banks
By: Raul_I_Meijer
That the world’s central bankers get a lot of things wrong, deliberately or not, and have done so for years now, is nothing new. But that they do things that result in the exact opposite of what they ostensibly aim for, and predictably so, perhaps is. And it’s something that seems to be catching on, especially in Asia.
Now, let’s be clear on one thing first: central bankers have taken on roles and hubris and ‘importance’, that they should never have been allowed to get their fat little greedy fingers on. Central bankers in their 2016 disguise have no place in a functioning economy, let alone society, playing around with trillions of dollars in taxpayer money which they throw around to allegedly save an economy.
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Friday, February 19, 2016
Rising U.S. Interest Rates? Never Mind / Interest-Rates / US Interest Rates
By: John_Rubino
It was always a matter of when, not if, the financial markets would tell the Fed to stop raising interest rates. And it appears the message has been received:
Friday, February 19, 2016
Marc Faber Warns “They Will Bankrupt the World!” / Interest-Rates / Global Debt Crisis 2016
By: Gordon_T_Long
Dr. Marc Faber joins FRA Co-founder Gordon T. Long in an exciting discussion of monetary malpractice, negative interest rates, the influence of current geopolitical risk and much more. Dr Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics.
Thursday, February 18, 2016
The U.S. Ban on Cash Has Already Begun / Interest-Rates / War on Cash
By: Graham_Summers
The Central Banks hate physical cash. So much so they there will likely try to ban it in the near future.
You see, almost all of the “wealth” in the financial system is digital in nature.
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Wednesday, February 17, 2016
U.S. Banks Ready for Negative Interest Rates? / Interest-Rates / Credit Crisis 2016
By: BATR
The test run proved that negative interest rates can push savers into minus territory. Public outrage, while registered is not heard by the central bankers. The reasoning that commercial banks will start making loans because of the cost of sitting on deposits is pure fantasy thinking. As the article, Low Interest Rates Impoverish Savers shows,
“How long will people accept this thief? The options to parking cash in hand with a FDIC insured institution seems worth an examination. However, few alternatives for working class savers exist. Surely, this occurrence is intentional because the real objective of the "New Normal" is to bankrupt Middle America. What other conclusion makes sense?”
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Tuesday, February 16, 2016
Has Chicago Reached Debt Boiling Point? / Interest-Rates / US Debt
By: Rodney_Johnson
In the 1890s Charles Dana, editor of the New York Sun, referred to Chicago as the “Windy City.” Chicago was one of many cities competing to host the World’s Fair, and clearly the writer intended the double entendre to apply to the city’s weather as well as its mouthy politicians.When it comes to Chicago’s weather, anyone who has visited “Chi-town” (as the city is known in CB-lingo) can attest to the screaming wind off of Lake Michigan. It howls for what seems like days at 40 mph, carrying with it sub-zero temperature in the winter.
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Tuesday, February 16, 2016
Why Negative Interest Rates Will Fail / Interest-Rates / Financial Crisis 2016
By: Frank_Hollenbeck
It is now just a matter of time before the US central bank follows the central banks of Japan, the EU, Denmark, Sweden and Switzerland in setting negative rates on reserve deposits.
The goal of such rates is to force banks to lend their excess reserves. The assumption is that such lending will boost aggregate demand and help struggling economies recover. Using the same central bank logic as in 2008, the solution to a debt problem is to add on more debt. Yet, there is an old adage: you can bring a horse to water but you cannot make him drink! With the world economy sinking into recession, few banks have credit-worthy customers and many banks are having difficulties collecting on existing loans.
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Monday, February 15, 2016
Devalue or Die; Negative Interest Rate Wars Have Begun / Interest-Rates / Currency War
By: Sol_Palha
Don't part with your illusions. When they are gone, you may still exist, but you have ceased to live.
Mark Twain
Tuhe “devale or die” currency wars are picking up steam; Japan’s central bankers are not alone when it comes to taking rates into negative territory. A host of European nations are now joining the bandwagon, and the latest victim is Sweden. We alluded to this development a long time ago and published a host of articles on this topic. Central bankers Worldwide understand that the only driving force behind the magical recovery in the U.S s hot money and that is the only weapon that can maintain that illusion. Get ready for negative rate wars; imagine having to pay the banks to keep your money; soon people will start to question the value of banks.
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Monday, February 15, 2016
Deranged Central Bankers Blowing Up The World / Interest-Rates / Central Banks
By: James_Quinn
It is now self-evident to any sentient being (excludes CNBC shills, Wall Street shyster economists, and Keynesian loving politicians) the mountainous level of unpayable global debt is about to crash down like an avalanche upon hundreds of millions of willfully ignorant citizens who trusted their politician leaders and the central bankers who created the debt out of thin air. McKinsey produced a report last year showing the world had added $57 trillion of debt between 2008 and the 2nd quarter of 2014, with global debt to GDP reaching 286%.
Friday, February 12, 2016
Is This the Debt Bubbles Last Rattle? / Interest-Rates / Global Debt Crisis 2016
By: Raul_I_Meijer
What we see happening today is why we called our news overview the “Debt Rattle” 8 years ago. The last gasps of a broken system ravished by the very much cancer-like progress of debt. Yes, it took longer than it should have, and than we thought. But that’s pretty much irrelevant, unless you were trying to get rich off of the downfall of your own world. Always a noble goal.
There’s one reason for the delay only: central bank hubris. And now the entire shebang is falling to bits. That this would proceed in chaotic ways was always a given. People don’t know where to look first or last, neither central bankers nor investors nor anyone else.
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Friday, February 12, 2016
Can the U.S. Fed Drop Interest Rates Below 0%? / Interest-Rates / US Interest Rates
By: EWI
This question is not as preposterous as it may seem.
For the financial markets, the biggest event of the week starts tomorrow: On Wednesday and Thursday (Feb. 10-11) Fed chair Janet Yellen will appear before Congress to deliver her semi-annual Monetary Policy Report.
"It's huge." That's how one strategist put it this morning, in a CNBC interview about the importance of Yellen's testimony.
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Friday, February 12, 2016
Why the Federal Reserve Always 'Happens' to Be Wrong / Interest-Rates / US Federal Reserve Bank
By: MoneyMetals
"The last duty of a central banker is to tell the public the truth." - Alan Blinder, former Federal Reserve Board Vice Chairman
The Federal Reserve Board finds itself back in a quandary of its own making. When Fed chair Janet Yellen pushed through an interest rate hike this past December, she confidently cited an "economy performing well and expected to continue to do so."
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Thursday, February 11, 2016
The War on Cash is About to Go into Hyperdrive / Interest-Rates / War on Cash
By: Graham_Summers
The global Central Banks have declared War on Cash.
Historically, one of the safest things to do when the markets begin to collapse is to move a significant portion of your holdings to cash. As the old adage says, during times of deflation, “cash is king.”
The notion here is that cash is a safe haven. And while earning 1-2% in interest doesn’t do much in terms of growing your wealth, it sure beats losing 20%+ by holding on to stocks or bonds during their respective bear markets
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Thursday, February 11, 2016
Negative Interest Rates: Their Devastating Impact on Our Economy / Interest-Rates / Financial Crisis 2016
By: Harry_Dent
Since late 2008, central banks around the world have used unprecedented QE to try and stoke the global economy.Then in June 2014, the ECB took it a step further. They went negative.
Zero short-term interest rates apparently weren’t enough. The ECB realized that if they couldn’t get banks to loan or consumers to spend, why not really light a fire under their ass and tell them: “if you’re not going to spend, you have to pay to keep your money in the bank!”
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Thursday, February 11, 2016
Through the Looking Glass on Interest Rates / Interest-Rates / Credit Crisis 2016
By: John_Browne
On January 29th, Japan's central bank governor, Haruhiko Kuroda, announced that the Bank of Japan would introduce a Negative Interest Rate Policy, or NIRP, on bank reserve deposits held in excess of the minimum requisite. The European Central Bank, and central banks in Switzerland, Denmark and Sweden have already partially blazed this mysterious trail. The banks have done so in order to weaken their respective currencies and to light a fire under inflation. Swiss national bonds now carry negative rates out to maturities of eleven years, meaning investors must lock up funds for eleven years to receive even a small positive nominal return!
Wednesday, February 10, 2016
UK Interest Rates, Economy Forecasts 2016 and 2017 - Video / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
Is the UK 6 year long panic low of 0.5% interest rates over? Are rates about to start on a trend towards normalisation as the Bank of England Governor Mark Carney was stating would happen barely 6 months ago? Or will the Bank of England remain paralysed by fear of a banking sector armageddon? And what are the interest rate implications from Britain's forthcoming EU referendum i.e. the risks of BrExit that could trigger much market uncertainty.
Wednesday, February 10, 2016
The Fed Doesn't have a Clue! / Interest-Rates / US Federal Reserve Bank
By: Axel_Merk
"The Fed doesn't have a clue!" - I allege that not only because the Fed appears to admit as much (more on that in a bit), but also because my own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower - think what happened in 2000. What are investors to do, and when will we reach bottom?
Saturday, February 06, 2016
UK Interest Rates, Economy GDP Forecasts 2016 and 2017 / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
Six months ago Bank of England Governor, Mark Carney in 'forward guidance' at the time gave his intentions to start to raise UK interest rates early 2016, that in the run up to the Fed December rate hike had galvanised many to expect a similar trailing response from the Bank of England to gradually follow the Fed towards normalisation of UK interest rates towards a target of 2.5% over 3 years i.e. by Mid 2018.
"Short-term interest rates have averaged around 4.5% since around the Bank's inception three centuries ago, the same average as during the pre-crisis period when inflation was at target...
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Friday, February 05, 2016
End of the Fed: It Can’t Do Any of the Things It’s Supposed to Do / Interest-Rates / US Federal Reserve Bank
By: Jeff_Berwick
[The following is by TDV’s Senior Analyst, Ed Bugos]
Janet Yellen has been in the news with her often-stated determination to create price inflation.
Why Fed officials are so scared to death of the deflation we all look for at the shopping mall each weekend is anybody’s guess. Ours is that it keeps the crony banking system and its inflated bureaucracy afloat – on a sea of green, like in a yellow submarine.
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Monday, February 01, 2016
The Fed Is Not Hiking Rates: Risk Assets To Perform / Interest-Rates / US Interest Rates
By: Bob_Kirtley
The landscape of global monetary policy is changing. In late 2015 we had the Fed hiking, signalling more to come, the ECB holding back on fresh QE and even the BOJ, which has engaged in more easing than any other central bank in history, was sitting on its hands.
That tune has changed.
The BoJ moved to negative rates this week. The Fed didn’t hike and signalled that they aren’t going to hike in the short term. The ECB is making noises about expanding its QE programs. In this article we explore direction of monetary policy going forward and its implications for financial markets.
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Monday, February 01, 2016
US Dollar and US Treasury Bonds Big Picture / Interest-Rates / US Bonds
By: Rambus_Chartology
Since we covered the many different markets in detail last week I would like to focus back in on the US dollar and the TLT looking for clues for the big picture direction. The huge daily swings, in say the INDU last week, makes it very hard to keep and hold a short or long position unless you're perfect on your entry point. In a bull market it's two steps forward and one step backward and in a bear market it's two steps down and one step up. If an entry point in a bear market is not made in the first part of the two steps down sequence you'll find your self behind at some point in the trade if the entry point was made in step two. This is one reason why it's so important to know the direction of the big trend. Until something changes I believe the US stock markets are now in a bear market. There are a lot of things that can change that outlook but for today that's what the charts are suggesting.
Monday, February 01, 2016
BOJ Negative Interest Rates Central Banking Crime Syndicate's War on Cash for Triggering Panic Consumption / Interest-Rates / War on Cash
By: Nadeem_Walayat
Whilst most market commentators were fixated on the prospects for further Fed tightening, the so called unwinding of easy money quantitative easing in the United States. The Japanese arm of the central banking crime syndicate took the markets by storm Friday by effectively decreeing that inflation is just too low for the systematic stealth theft of bank deposits to continue so now it's time to ramp things up a notch with the next step which is for NEGATIVE INTEREST RATES. The FIRST instance of which will be that an interest rate of -0.1% will be applied to bank deposits (excess reserves) with the central bank, again this is just the FIRST instance with MORE or rather WORSE to follow which sends a discouraging message to all against holding Yen deposits, triggering an immediate drop of over 2% in the value of the Yen.
Saturday, January 30, 2016
Lacy Hunt: Inflation and 10-Year US Treasury Yields Headed Lower / Interest-Rates / US Interest Rates
By: Gordon_T_Long
Dr. Lacy Hunt joins FRA Co-Founder Gordon T. Long in an in-depth discussion on the current debt dilemma and the decisions of the Federal Reserve. Dr. Lacy H. Hunt, an internationally known economist, is Executive Vice President of Hoisington Investment Management Company, a firm that manages over $5 billion for pension funds, endowments, insurance companies and others. He is the author of two books, and numerous articles in leading magazines, periodicals and scholarly journals. Included among the publishers of his articles are. Barron's, The Wall Street Journal, The New York Times, The Christian Science Monitor, the Journal of Finance, the Financial Analysts Journal and the Journal of Portfolio Management.
Friday, January 29, 2016
Seven Years of Monetary Quackery; Can the Fed Admit it Got it Wrong? / Interest-Rates / US Federal Reserve Bank
By: Mike_Whitney
America’s richest investors are betting trillions of dollars that the US economy will stay lousy for years to come.
Who are these wealthy investors?
Bondholders. And their views on the state of the economy are reflected in the yields on long-term US Treasuries. At present, the yields on long-term debt are very low which means that investors think the economy will continue to underperform while inflation remains in check.
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Friday, January 29, 2016
Japan Just Lit the Fuse on a $9 Trillion Debt Implosion / Interest-Rates / Global Debt Crisis 2016
By: Graham_Summers
Last night the Bank of Japan implemented Negative Interest Rate Policy, or NIRP.
It is the second Central Bank to do so. The European Central Bank or ECB first went to NIRP in June 2014.
Thus, between Japan and Europe, over 20% of the world’s GDP is being managed by a Central Bank with NIRP.
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Friday, January 29, 2016
Janet Yellen "Peddling Fiction" on a Worsening Economy... Doesn’t Raise Rates and Downgrades Outlook / Interest-Rates / US Interest Rates
By: Jeff_Berwick
We have made some very bold claims in the past. Since 2010, to many jears, we said that the Federal Reserve would never raise rates significantly again. Most laughed. They said that surely this crazy, emergency 0% interest rate policy was only temporary. Five long years passed, and even a Fed Chairman later, before finally, after seven years-to-the-day, on December 16th, Janet Yellen took the bold move to raise rates 0.25%.
Thursday, January 28, 2016
The Fed Passes the Buck: Blame Oil and China / Interest-Rates / US Federal Reserve Bank
By: MISES
C. Jay Engel writes: There are a handful of themes out there on recent market action that are either totally wrong or otherwise highly misleading. For instance, regarding the recent calamity in the capital markets, one especially apparent dichotomy has presented itself as offering two choices as to what, exactly, is causing the painful turbulence.
Tuesday, January 19, 2016
The Citadel Is Breached: Congress Taps the Fed for Infrastructure Funding / Interest-Rates / US Federal Reserve Bank
By: Ellen_Brown
In a landmark infrastructure bill passed in December, Congress finally penetrated the Fed's "independence" by tapping its reserves and bank dividends for infrastructure funding.
The bill was a start. But some experts, including Congressional candidate Tim Canova, say Congress should go further and authorize funds to be issued for infrastructure directly.
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Tuesday, January 19, 2016
Margin Rules Changes Force New Private Funding Of Public Debt / Interest-Rates / US Debt
By: Dan_Amerman
The Federal Reserve and other regulators around the world (including all members of the G-20) have recently agreed to alter margin rules, which will allow them to claim new powers over lending and leverage. In the United States these developing regulatory changes will not be restricted to the Fed's legal oversight over banks alone, but will affect all financial companies.
The new margin rules will impact about $4.4 trillion in investments in the US. In combination with new rules for $2.7 trillion in money funds, the regulations are changing for about $7 trillion in investments. And the combined effect of these changes may be to drive up to $2.5 trillion out of the private investment markets and into purchasing the debts of a heavily indebted US government, thereby providing a very low cost source of funds.
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Tuesday, January 19, 2016
Junk Bonds Slump - Will 2016 be The Year The Fed Fails? / Interest-Rates / US Interest Rates
By: Clif_Droke
To many economists, the biggest mistake the Fed has made has been a lack of aggression in raising interest rates. After all, they reason, the U.S. job market is as strong as it has been since 2007 and the economy, even if sluggish, is at least back on an even keel. These same observers cheered the Fed's decision to raise the Fed funds rate in December by a quarter percentage point.
Yet there is even more reason to worry that the raising of the Fed funds rate last month may have been a policy blunder of major proportions. In this commentary we'll briefly examine the distinct possibility that the Fed has put the U.S. financial market on the cusp of another troublesome year ahead.
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Monday, January 18, 2016
Central Banks: the Biggest Short of All / Interest-Rates / Central Banks
By: Mario_Innecco
Transcript Excerpt: Monday January 18th 2006 still like to talk about the big short book written by
mouth Michael movers who is really a lot of other books about finance he wrote
liars poker that was the region no
also lashed boys Wall Street that came out in 2014 the bigger shirt came was
written in and came out in 2010 and I watched the new movie that's come out
the big short that came out on December 15th in the USA is interesting because
it was the day before
hydrates and Wikipedia call in the American biographical comedy drama and
it's interesting to see that it cost twenty million to me the movie and it's
already grossed seventy million dollars in box office which is not bad for a
Sunday, January 17, 2016
The Bursting of the Bond Bubble Has Begun - Pt 2 / Interest-Rates / International Bond Market
By: Graham_Summers
As we wrote earlier this week, bursting of the bond bubble has begun.
The decision by Central Banks to “inflate” the system’s debts away post-2008 has resulted in the misallocation of trillions of Dollars of capital.
The worst offenders were Chinese corporates. China has created the single largest mountain of bad debt in the world. Indeed, things are so out of control in China that 45% of all proceeds from new bond issuance are being used just to pay off interest on old loans.
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Friday, January 15, 2016
The Bond Bubble Has Begun Bursting / Interest-Rates / Corporate Bonds
By: Graham_Summers
The bursting of the bond bubble has begun.
As I’ve outlined previously the primary concern for Central Banks is the bond bubble. CNBC and other financial media focus on stocks because the asset class is more volatile and so makes for better content, but the foundation of the financial system is bonds. And bonds are THE focus for Central Banks.
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Wednesday, January 13, 2016
Summers: Global Economy Can't Withstand Four 2016 Fed Hikes / Interest-Rates / US Interest Rates
By: Bloomberg
Former U.S. Treasury Secretary Lawrence Summers spoke with Stephanie Ruhle and David Westin on Bloomberg TV's "Bloomberg <GO>." On the expectation of four rate hikes in 2016, Summers said: "I'd be surprised if the world economy can comfortably withstand four hikes. And I think that basically markets agree with me. And that's why despite the statements that are being made, markets aren't expecting four hikes."
Summers also said: "If you ask if there are risk that we're going to find ourselves in a situation within the next two years where policy is going to have to reverse, yes. I think that is a significant risk."
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Monday, January 11, 2016
Junk Rhymes with Subprime / Interest-Rates / Corporate Bonds
By: Michael_Pento
On December 16th 2008, in what Ben Bernanke averred took a tremendous amount of "moral courage", the Federal Reserve officially arrived at its Zero Interest Rate Policy. ZIRP was a huge win for borrowers because it drove down the carrying cost of debt to historic lows. Unfortunately, savers didn't fare as well.
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Monday, January 11, 2016
Rigged U.S. Ttreasury Bond Market Double Barreled Hidden Q.E. To Infinity / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
We were just treated to a fake official rate hike, and it was cleverly executed. The recent supposed USFed rate hike was a gigantic fraud, a misdirection, a clever ploy, and an act of extreme desperation. We were told of an official 25 basis point interest rate hike. But a hike of 0.25% is nowhere to be seen. The reality is that the USFed is so strapped, so deeply under siege, so overwhelmed, that it requires urgent help from the USDept Treasury. So they have expanded QE to become Double Barreled Hidden QE to Infinity. It has an important feature now, with national security stamped on it. This is truly the end game for the USDollar. Big thanks to Rob Kirby and EuroRaj on my colleague team for leading the way and shining the spotlight. Their abilities to see through the maze, smoke, mirrors, and din is impressive.
Saturday, January 02, 2016
The Fed’s Academic-Based Theories Are Creating a BRUTAL Economic Reality / Interest-Rates / US Federal Reserve Bank
By: Graham_Summers
One of the most frustrating aspects of today’s financial system is the fact that the Fed is being lead by lifelong academics with no real world banking or business experience.
Consider the cases of Ben Bernanke and Janet Yellen.
Neither of these individuals has ever created a job based on generating sales of any kind. Neither of them has ever had to make payroll. Neither of them has ever run a business. What are economic realities for business owners (e.g. operating costs, capital and profits) are just abstract concepts for Bernanke and Yellen.
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Saturday, January 02, 2016
A 'Witch's Brew' Bubbling in Bond Market ETFs / Interest-Rates / Corporate Bonds
By: Gordon_T_Long
We believe the Credit Cycle has turned and with it will come some massive unexpected shocks. One of these will be the fall out in the Bond Market, centered around the dramatic growth explosion in Bond ETFs coupled with the post financial crisis regulatory changes that effectively removed banks from making markets in corporate bonds. It is a 'Witch's Brew' with a flattening yield curve bringing it to a boil.
Wednesday, December 30, 2015
Does The National Debt Supercycle Override The Normal U.S. Interest Rate Cycle? / Interest-Rates / US Debt
By: Dan_Amerman
Markets and economies usually run in cycles and there have been numerous previous reversals where falling interest rates have been replaced by rising interest rates. The soothing reassurances from many financial authorities and much of the financial media are that there is no need for the general public to worry - because this sort of thing is quite normal.
But is this actually true? Have we really been "here" before?
Or are there are major differences between this time around and the previous cycles of rising interest rates which mean that much of recent history may not apply at all?
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Wednesday, December 30, 2015
Get Your Money Out of Italian Banks Now! Austerity and Bail-Ins Fan Populist Flames / Interest-Rates / Credit Crisis 2015
By: Mike_Shedlock
Austerity and Bail-Ins Fan Populist Flames
The Italian economy is growing, albeit barely. But Italy is still saddled with massive amounts of debt.
Citizens are upset about a recovery that has passed most of them by. For example, youth unemployment is a whopping 39.8%.
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Tuesday, December 29, 2015
Monetary Policy Monster With A Key To Its Own Cage / Interest-Rates / Global Debt Crisis 2015
By: John_Rubino
Out on the fringes of monetary policy, a merger of sorts is taking place between the debt jubilee and Modern Monetary Theory (MMT). The result — likely to emerge sometime in 2016 — will make the past decade’s bank bailouts and QE programs look like kid stuff.
Let’s start by defining these terms:
The debt jubilee — an idea from biblical times in which debts are periodically forgiven — involves the government creating a lot of new currency and giving it to debtors, either through stepped-up public spending, tax cuts, or some sort of direct transfer. A more recent term for this is “helicopter money,” which reflects a central bank’s ability to simply drop newly-printed bills out of an aircraft if necessary.
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Tuesday, December 22, 2015
Is This Interest Rate Hike Rigged? / Interest-Rates / US Interest Rates
By: Anthony_Cherniawski
It’s official.This week the Federal Reserve raised the key overnight Fed Funds rate by 0.25%. The move was discussed, debated, argued, and telegraphed to death. We all heard about it until we hoped anything else financial would happen so we could finally put the tired story to rest.
Now that the rate hike is on the books, we can start talking about outcomes, like how in the world the Fed intends to enforce the rate hike, what it means, and what comes next.
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Monday, December 21, 2015
Beware of Central Bank Success / Interest-Rates / Central Banks
By: Michael_Pento
The most important question investors will soon have to face is: "what's going to happen once central banks finally meet their inflation targets?"
For example, let's assume after years of monetizing government debt, bidding up equity prices, and forcing debt on the public by keeping borrowing costs at or below zero; that the ECB is finally able to achieve its inflation target rate of 2%. This would only occur once money supply growth becomes both robust and sustainable. It is silly to believe ECB President Mario Draghi can bring inflation to just 2% and nail it at that level. Inflation will continue to rise past 2% until the ECB raises interest rates by reducing its pace of bond buying. So, we will have the environment where inflation is rising north of 2% and the central bank will be forced to start cutting back its purchases of debt and preparing the market for eventual outright sales.
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Monday, December 21, 2015
Yellen has Lift Off, But Rates Won’t Go To The Moon / Interest-Rates / US Interest Rates
By: Sam_Kirtley
At the FOMC meeting last week the Fed raised interest rates for the first time since 2006. This was a historic moment marks the first rate hike after the Fed engaged in massive quantitative easing programs to combat the Global Financial Crisis and the Great Recession. However, we are not economists or economic historians. We run a trading service and are therefore concerned with where the markets will go next. This means that our key point of analysis is around where rates will go next, rather than what they did last week.
Monday, December 21, 2015
Ron Paul - Do We Need the Fed? / Interest-Rates / US Federal Reserve Bank
By: Dr_Ron_Paul
Stocks rose Wednesday following the Federal Reserve's announcement of the first interest rate increase since 2006. However, stocks fell just two days later. One reason the positive reaction to the Fed's announcement did not last long is that the Fed seems to lack confidence in the economy and is unsure what policies it should adopt in the future.
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Sunday, December 20, 2015
U.S. Interest Rates Yield Curve Flattening Further, Why it Matters / Interest-Rates / US Interest Rates
By: Dan_Norcini
I am becoming increasingly concerned over the flattening yield curve. This curve enables us to get a first hand view of sentiment towards economic growth among bond investors and other large players in the interest rate markets, some of whom are among the most sophisticated observers of the financial scene anywhere.
Saturday, December 19, 2015
U.S. Fed Mission Accomplished / Interest-Rates / US Interest Rates
By: Peter_Schiff
On May 1, 2003 on the flight deck of the USS Abraham Lincoln then President George W. Bush, after becoming the first U.S. president to land on an aircraft carrier in a fixed wing aircraft (in a dashing olive drab flight suit), declared underneath an enormous "Mission Accomplished" banner that "major combat operations" in Iraq had been concluded, that regime change had been effected, and that America had prevailed in its mission to transform the Middle East. 13 years later, after years of additional combat operations in Iraq, and a Middle East that is spiraling out of control and increasingly disdainful of America's influence, we look back at the "Mission Accomplished" event as the epitome of false confidence and premature celebration.
Friday, December 18, 2015
U.S. Yield Curve and Spreads: Fed's Real Policy Error in Pictures; What's Next? / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Inquiring minds may be interested in a detailed look at the yield curve and spreads between various durations following the Fed's Wednesday rate hike. Let's start with a long-term chart from 1996 to 2015.
Thursday, December 17, 2015
Fed Rate Hike - Yellen Nailed It! / Interest-Rates / US Interest Rates
By: Bloomberg
Larry Fink, Chairman & CEO of BlackRock, spoke with Erik Schatzker, Stephanie Ruhle and David Westin on Bloomberg TV's "Bloomberg <GO>." He discussed the Federal Reserve rate increase, the possibility of dollar-euro trading at parity, and his economic outlook for 2016.
Fink praised Janet Yellen after the Fed raised interest rates yesterday: "I think she nailed it. It was not too hot, not too cold, right down the center. I think it was a very well scripted conference…And the most important thing, what she gave the market is clarity. I think the opportunity they missed in September, why the markets were so unsettled because we had no clarity on their actions. And in this case they really expressed exactly what they're looking for."
Thursday, December 17, 2015
Marc Faber - Federal Reserve Rate Hike At ‘Precisely The Wrong Time’ / Interest-Rates / US Interest Rates
By: GoldCore
Marc Faber, the editor of the Gloom, Boom & Doom Report, warned yesterday that the Federal Reserve has raised rates at “precisely the wrong time.”
Speaking to CNBC just before the interest rate decision, Faber warned that it’s the wrong time because “the global economy has decelerated very badly, and many countries are already in recession, or going into recession.”
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Wednesday, December 16, 2015
U.S. Interest Rate Hike Too late, Recession Likely in Next 12 Months - Video / Interest-Rates / Recession 2016
By: Bloomberg
Sam Zell, chairman at Equity Group Investments, spoke with Stephanie Ruhle and David Westin on Bloomberg TV's "Bloomberg <GO>." He discussed the expected Federal Reserve rate hike, the risk of a near-term recession, and investor flexibility provided by low-interest.
Zell said: "I think that this interest rate hike is probably 6 or 8 months too late. I think that the economy is closer to falling over than it is to going up."
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Wednesday, December 16, 2015
Did "Tight" Fed Interest Rates Policy Cause the Financial Crisis? / Interest-Rates / US Interest Rates
By: Robert_Murphy
Recently Senator Ted Cruz aggressively questioned Janet Yellen on the Fed’s possible role in causing the financial crisis and subsequent recession. In particular, he claimed that “in the summer of 2008” the Fed “told markets that it was shifting to a tighter monetary policy,” and that this announcement “set off a scramble for cash, which caused the dollar to soar, asset prices to collapse, and CPI [growth — RPM] to fall below zero, which set the stage for the crisis.” Cruz asked Yellen if she agreed with Bernanke’s view from his new book, in which he says the Fed made a mistake by not cutting rates in September 2008.
Wednesday, December 16, 2015
D-Day for Fed Fiat Credit System - Video / Interest-Rates / US Interest Rates
By: Mario_Innecco
Transcript Excerpt - December 16 2015 Wednesday it's the day will decide to hike interest rates
that's what most people think it's almost like a done deal so in my opinion
it's the Fed trying to deflate the biggest credit bubble amber and I guess
we don't have to go into details about that we all know that debt and credit
has been the highest ever USA national debt at almost 19 trillion so far it's
more than doubled since President Obama came to power so today will be the first
rate hike since I began its zero interest rate policy or its server or
Wednesday, December 16, 2015
Federal Reserve At End Of Monetary Road / Interest-Rates / US Federal Reserve Bank
By: GoldCore
The all important context for Federal Reserve’s interest rate decision, where the Federal Reserve is widely expected to hike interest rates for the first time in nearly a decade has been examined by the insightful Grant Williams. He is very skeptical of the Fed’s ability to continue to control markets much longer … and this is a gross understatement:
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Tuesday, December 15, 2015
Have You Considered What Wil Happen If the Fed DOESN’T Raise U.S. Interest Rates? / Interest-Rates / US Interest Rates
By: Rodney_Johnson
We’ve gotten it into our heads that Fed Chair Janet Yellen is on her way down from the mountain top carrying stone tablets etched with the details of a rate hike. We don’t know exactly what form it will take, but let there be no doubt – the financial gods have spoken, so a rate hike there will be!But it’s not that simple.
The Federal Open Market Committee (FOMC) is the group that determines monetary policy. This group must reach a consensus on policy changes before anything new can happen.
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Tuesday, December 15, 2015
Is This Just the Beginning of the Euro Debt Crisis? / Interest-Rates / Eurozone Debt Crisis
By: Harry_Dent
I've been shocked over how much QE and stimulus the central banks have signed on for in the last seven years, but they’re finally starting to reach their limit.The U.S. already did in 2014 when the Fed finally tapered. And this week, the markets are betting on a rate hike – never mind the trouble brewing in China, other emerging markets, and now Europe.
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Monday, December 14, 2015
Janet Yellen, U.S. Zero Interest Rates - Déjà vu all over Again / Interest-Rates / US Interest Rates
By: James_Quinn
Janet Yellen will increase interest rates for the first time in nine years on Wednesday. She isn’t raising them because the economy is strengthening. The economy just happens to be weakening rapidly, as global recession takes hold. The stock market is 3% lower than it was in December 2014, and has basically done nothing since the end of QE3. Wall Street is throwing a hissy fit to try and stop Janet from boosting rates by an inconsequential .25%. Janet would prefer not to raise rates, but the credibility and reputation of her bubble blowing machine is at stake. The Fed has enriched their Wall Street benefactors over the last six years, while destroying the real economy and the middle class.
Saturday, December 12, 2015
Soaring Bond Yields - This Is How Fast It Happens / Interest-Rates / Corporate Bonds
By: Raul_I_Meijer
For a while there, companies deemed to be highly risky were nonetheless able to borrow money for less than 6%. And borrow they did. Frackers, ultra-high-leverage retail chains and various other close-to-the-edge entities slurped up trillions from yield-starved investors who had forgotten about the other side of the risk/return equation.
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Thursday, December 10, 2015
Currency Markets Anticipating a U.S. Interest Rate Hike Next Week / Interest-Rates / US Interest Rates
By: Dan_Norcini
Watching the price action in the currency markets it is becoming clearer to me that the Forex crowd has now moved beyond any expected rate hike by the Fed next week and has shifted its focus to "WHAT COMES AFTER THAT?"
In other words, we have probably seen the high in the US Dollar for a bit since the impact on the currency has effectively already been discounted into its price. Seeing the Fed Funds futures showing a probability of a Fed rate hike next week above 80%, for all practical trading purposes, it is now a done deal.
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Wednesday, December 09, 2015
Government Debt Is Not Like Private Debt / Interest-Rates / UK Debt
By: MISES
Simon Wilson writesL As the Labour Party fights with Tories over the need to slightly rein in government spending in the UK, opponents of even the slightest bit of austerity have turned out to claim that there is no virtue in “living within your means.”
In a recent article in The Guardian, Ha-Joon Chang, attacked even the Tory government’s timid claim that it wasn’t a great idea to spend more than the government collects in tax revenues. But for the new radical left Labour Party on whose behalf Chang’s article was written, this notion is as quaint as it is “simply wrong.”
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Wednesday, December 09, 2015
Bank of Canada Announces Negative Interest Rates; Loonie Sinks to 2004 Low / Interest-Rates / Canadian $
By: Mike_Shedlock
The Canadian dollar, affectionately known as the loonie because of a loon on the one dollar coin, has crashed vs. the US dollar.
Tuesday, December 08, 2015
Fed's Rocket Ship Turns Hoverboard / Interest-Rates / US Interest Rates
By: Peter_Schiff
Over the past year, while the U.S. economy has continually missed expectations, Federal Reserve Chairwoman Janet Yellen has assured all who could stay awake during her press conferences that it was strong enough to withstand tighter monetary policy. In delivering months of mildly tough talk (with nothing in the way of action), Yellen began stressing that WHEN the Fed would finally raise rates (for the first time in almost a decade) was not nearly as important as how fast and how high the increases would be once they started. Not only did this blunt the criticism of those who felt that the delays were unnecessary, and in fact dangerous, but it also began laying the groundwork for the Fed to do nothing over a much longer time period. To the delight of investors, the Fed has telegraphed that it will adopt a "low and slow" trajectory for the foreseeable future and move, in the words of Larry Kudlow, like "an injured snail."
Tuesday, December 08, 2015
A Peek Behind the Fed Policy Curtain / Interest-Rates / US Federal Reserve Bank
By: Gary_Tanashian
This article was originally and simply titled ‘Market Management’ as the opening segment from this week’s NFTRH 372. We then covered US and global stock markets and precious metals in detail, along with brief but ongoing negativity about commodities (but also what to look for regarding signs of change), a currency update and extensive market sentiment and indicator updates.
Sunday, December 06, 2015
The Fed, Lindbergh and Scientifically Created Depressions / Interest-Rates / US Federal Reserve Bank
By: Mario_Innecco
Transcript: non-farm payroll came out yesterday on Friday iraqi amount of 211,000 was expected 200,000 so it better than expected number unemployment rate stayed at five percent in the previous number was revised higher to 298,000 from 271 so it's a good number stock market went there and finish up just under three hundred and seventy points to sense and yeah gordon supra surprisingly went up more than 2% gold was up 25 bucks and it closed above he 1070 level finish around 1086 silver finish more than 40 cents at 14 goals 25 I think so yeah pretty encouraging buy...
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Friday, December 04, 2015
Bill Gross: Fed is "Certainly Set to Go" / Interest-Rates / US Interest Rates
By: Bloomberg
Bill Gross of Janus Capital Management joined Bloomberg Radio and Television to react to today's jobs report.
Gross said the Federal Reserve is "certainly set to go…Fed is ready to go I think because of concerns on the real economy."
When asked if he lost money yesterday, Gross said: " Oh no, made money yesterday. I had lots of calls, sold lots of calls on five and 10-year German bunds, went the other way this time and so made a lot of money, making a lot of money today on those particular trades."
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Friday, December 04, 2015
Does Draghi's Coup Secure Yellen's Interest Rate Liftoff? / Interest-Rates / ECB Interest Rates
By: Ashraf_Laidi
To some, the ECB has underdelivered today by not only cutting rates by a smaller than expected 0.10 bp in the deposit rate to -0.3% from -0.2% (vs exp -0.4%) but also disappointed most market players by only extending the duration of QE to an additional 6 months and not adding to the monthly $60 bn QE. The ECB's decision to opt for QE extension rather than QE expansion reflects the broad signs of improvement in German growth business surveys. Germany's IFO and various Eurozone PMIs and confidence surveys have hit 17 to 52-month highs.
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Friday, December 04, 2015
U.S. Dollar and Bonds Sink as ECB Cuts Rates to -0.3%, Pledging More QE Until March 2017 / Interest-Rates / ECB Interest Rates
By: Mike_Shedlock
ECB president Mario Draghi's announcement today regarding more QE fell far short of the sky-high expectations of market participants.
Tuesday, December 01, 2015
Fed's Yellen Running Out of Makeup - Video / Interest-Rates / US Federal Reserve Bank
By: Mario_Innecco
It's Tuesday before non-farm payroll which is coming out on Friday but it's been an interesting day in the markets we've had some interesting data in the us- the manufacturing I assume PM. number came out of 48 points, was forecast to come out and it dropped from 50 the previous month so that's quite a big drop in its below 50 which means a contraction so if you look at the headlines on Zero Hedge for example today we've had some interesting headlines about the US economy one of them says Atlanta Federal Reserve slashes fourth-quarter GDP forecast from 2.3 to 1.4.
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Thursday, November 26, 2015
U.S. Bond Market Not Destined to Crash in 2015 / Interest-Rates / US Bonds
By: Sol_Palha
Always do what you are afraid to do. Ralph Waldo Emerson
The trend in bonds was bullish for a long time, and one can see how bonds ran up during that time frame. Currently, its neutral and that also has to be viewed through a bullish lens as it should have turned negative given the run-up. Bonds need to close on a weekly basis above 160.00 relatively soon. In fact, there is a good chance that if the next run up fails to take out the August highs of 161-23, bonds will be paving the way for a move down to the 152.00 ranges and then 147-148 ranges. Traders willing to take on a bit of a risk could consider opening long positions at both levels. Some funds could be deployed at 152 or better and some at 148 or better. Market Update, Nov 1st, 2015.
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Thursday, November 26, 2015
U.S. Federal Reserve Rate Hike / Interest-Rates / US Federal Reserve Bank
By: EconMatters
The Federal Reserve has been telegraphing to markets that they are going to raise the fed funds rate by 25 basis points next month at its December Fed Meeting. The financial markets think they are serious this time and have been pricing in this 25 basis point rate hike for the past 6 weeks. The real question is that since the Fed has told us that they are Data Dependent for the past 7 years regarding changes to monetary policy, what has really changed in the economic data for the positive? Why now of all times do they decide to raise rates? Are they raising rates for the right reasons? These are just some of our concerns as the Federal Reserve embarks upon their final FOMC Meeting on December 16th 2015. Read full article... Read full article...
Tuesday, November 24, 2015
Fed’s Tarullo: U.S. Interest Rates Liftoff Should Wait for Signs of Inflation / Interest-Rates / US Interest Rates
By: Bloomberg
Federal Reserve Board Governor Daniel Tarullo spoke with Bloomberg Television’s Stephanie Ruhle and David Westin on “Bloomberg <GO>” yesterday. He discussed when the Fed will begin raising rates and waiting for tangible signs of inflation before moving.
There’s “more than a pretty good chance” that banks will face “some net increase in the post-stress minimum capital requirements,” Tarullo said.
DAVID WESTIN: So we want to turn now to our special guest for this half hour, Federal Reserve Board Governor, Daniel Tarullo. Dan has been on the Fed now since 2009, I believe it is. He has served on the --
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Tuesday, November 24, 2015
Janet Yellen Responds as a Central Banker Would / Interest-Rates / US Federal Reserve Bank
By: Gary_Tanashian
Let's try to untangle the web of Fed-speak going on here. "Reality" for our purposes is defined as my opinion, obviously.
Yellen Defends Seven Years of Low Interest Rates in Letter to Nader
Fed-Speak:
Warning that "an overly aggressive increase in rates would at most benefit savers only temporarily," she argued in the letter released Monday in Washington that the Fed's seven-year era of zero rates had sheltered American savers from dramatic declines in the value of their homes and retirement accounts.
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Monday, November 23, 2015
Will Fed Raise the Discount Interest Rate Today? / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
Will the Fed raise its discount rate at its previously unscheduled meeting for today? Thursday's post on the Federal Reserve's website that "an expedited, unscheduled meeting of the Board of Governors of the Federal Reserve to review the discount rate" will be held today (Monday) at 11:30 ET (16:30 London/GMT). The discount rate, the rate at which banks borrow from the Fed's discount window is set by the Board of Governors, rarely used by the banks. This must not be confused with the fed funds rates, which is set by the Federal Open Markets Committee.
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Saturday, November 21, 2015
Will the Fed Raise U.S. Interest Rates on Monday, November 23, 2015? - Video / Interest-Rates / US Interest Rates
By: Mario_Innecco
Earlier this morning I spoke about how the Fed will meet on Monday November 2015 even though the next meetings on December 16. They're having an expedited procedure or meeting which means their meeting in no rush and behind closed doors. It will be interesting to see what they do and might even raise rates this coming Monday even though that's very very unusual.
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Thursday, November 19, 2015
Why Isn’t This Incredibly Bearish Bond Market Development Making the News? / Interest-Rates / US Bonds
By: Casey_Research
By E.B. Tucker
Editor’s Note: This is one of the most important essays you’ll read all year. In this special edition of the Casey Daily Dispatch, E.B. Tucker shares an urgent warning you’re unlikely to hear anywhere else.
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Friday, November 13, 2015
The U.S. Shadow Interest Rate Casts Gloom / Interest-Rates / US Interest Rates
By: Peter_Schiff
Nearly 92% of economists surveyed this week by the Wall Street Journal expect that our eight-year experiment with unprecedented monetary easing from the Federal Reserve will come to an end at the next Fed meeting in December. Since we have had the monetary wind at our back for so many years, at least a few have begun to question our ability to make economic and financial gains against actual headwinds. But in reality, the tightening cycle that the forecasters are waiting for actually started last year. Sadly, the markets and the economy are already showing an inability to handle it.
Thursday, November 12, 2015
Another Day Older and Deeper in Debt / Interest-Rates / Global Debt Crisis 2015
By: DeviantInvestor
Debt overwhelms most people in debt based fiat currency economies (US, UK, Europe, and others). Credit cards, auto loans, student loans, mortgages, and more …
Debt overwhelms most governments in debt based fiat currency economies. They are in debt because governments spend more than their revenues, which is a truly simple concept. However, don’t expect fiscal sanity to return anytime soon.
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Wednesday, November 11, 2015
Japanese Bonds Yield of Dreams? / Interest-Rates / Japanese Interest Rates
By: EWI
Why Japan's long-battered bond market may be gearing up for a comeback
Saber-tooth tiger. Wooly mammoth. Japanese government issued bonds?
Well it's happened. After years of enduring an unrelenting bear market (marked by plunging yields and rising prices) -- the long-battered Japanese government bond has made it on to the endangered financial species list.
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Tuesday, November 10, 2015
10-year US Treasury Note / Interest-Rates / US Bonds
By: Ed_Carlson
The rate on the 10-year US Treasury Note (ticker symbol TNX) had its best week since June last week with a gain of 8.46% to close at 23.33. It even printed an engulfing bullish candlestick on Friday.
Most of the week’s gain came on Friday’s strong non-farm payroll report. The breakout from the June bear trendline would seem to open the door for a return to the June high near 24.75 but…
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Monday, November 09, 2015
The War on Cash is Real / Interest-Rates / Central Banks
By: Graham_Summers
Stocks have rallied over the last 10 days in part by ECB President Mario Draghi’s statement that if push comes to shove, the ECB will push interest rates even further into negative territory (NIRP).
This represents just another round in the War on Cash, first implemented by the Central Banks in 2008.
It’s a little known fact that the cause for the gut-wrenching collapsing in late September-October 2008 was due to a significant portion of investors trying to move their money out of money market funds.
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Monday, November 09, 2015
Western Central Banks Playing with Hyper Inflationary Fire / Interest-Rates / Central Banks
By: Mario_Innecco
There are various examples in history of when national currencies have been debased so much that confidence in those currencies have been lost to such an extent that the nominal value of hard assets and productive assets in those currencies have gone up in a parabolic fashion. The grandaddy of currency debasement was the reichsmark during the Weimar Republic period in the early 1920s Germany. There are present day examples of currency debasement and rising local stock prices like Argentina and Venezuela but we will focus on the German example.
Saturday, November 07, 2015
US Dollar Surges, December Rate Hike Odds Soar Following Strong Jobs Report / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Following today's jobs report the odds of a December rate hike approached 70% and the US dollar index surged.
Friday, November 06, 2015
Bill Gross: '100% Chance' Fed will Raise U.S. Interest Rates in December / Interest-Rates / US Interest Rates
By: Bloomberg
Bill Gross of Janus Capital spoke with Bloomberg's Tom Keene and Michael McKee on Bloomberg Radio and Television this morning to respond to today's jobs report.
Gross said there is a "100 percent chance" the Fed will raise interest rates in December after jobs surged. "They're ready to go." He said: "100 percent that they go in December and then try and tamp it down with mild, gradual language that will keep the dollar from strengthening even further."
On dollar strength, Gross said: "I think the Fed fears it...They took it out of their statement last month. But prior to that, they were cognizant of the fact that a very strong dollar has negative implications for emerging markets... It's certainly a negative for the global financial system because there are many bets and much dollar denominated debt in terms of emerging market corporations and sovereigns will be impacted by this."
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Friday, November 06, 2015
Worlds Largest Debtor Ever Raises U.S. ‘Debt Ceiling’…Again / Interest-Rates / US Debt
By: GoldCore
The US government has once again agreed to increase it’s so-called debt “ceiling” – this time from $18.5 trillion to $20 trillion. The so-called debt ceiling is recognized industry-wide as a complete misnomer.
Thursday, November 05, 2015
The Bank of England Keeps Interest Rates at 321-Year Lows / Interest-Rates / UK Interest Rates
By: Mario_Innecco
We hear constantly from the U.K. government and mainstream publications like the Financial Times that the economy of Great Britain is recovering strongly and that the labour market is robust so it is probably surprising for many people that in spite of the strong growth in the U.K. economy that the Bank of England has kept its base rate at 0.5%. This almost zero interest rate has been kept since March 5th, 2009 when the MPC or Monetary Policy Committee cut the base rate from 1% to 0.5% and at the time it was understandable as the U.K. financial system was on the brink of a total meltdown and the U.K. government had to write a cheque and issue loan guarantees for £500 billion to bail out the big banks.
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Tuesday, November 03, 2015
QE's Creeping Communism / Interest-Rates / Quantitative Easing
By: Peter_Schiff
Most economists and investors readily acknowledge that the current period of central bank activism, characterized by extended bouts of quantitative easing and zero percent interest rates, is a newly-blazed trail in economic history. And while these policies strike some as counterintuitive, open-ended, and unimaginably expensive, most express comfort that our extremely educated, data-dependent, central bankers have a pretty good idea as to where the trail is going and how to keep the wagons together during the journey.
Monday, November 02, 2015
Global Fiscal and Monetary Madness / Interest-Rates / Quantitative Easing
By: Michael_Pento
Last week China’s central bank (the PBOC) cut borrowing costs for the sixth time in a year and eased the reserve requirement ratio (RRR) for the third time this year, in a desperate attempt to achieve the prescribed growth target of 7% off the back of ever-increasing credit issuance. The PBOC lowered the one-year benchmark bank lending rate by 25 basis points to 4.35%, the one-year benchmark deposit rate was also lowered by 25 basis points to 1.5%.
Friday, October 30, 2015
Fed’s US Debt Bomb and Interest Rates / Interest-Rates / US Debt
By: Zeal_LLC
With the Federal Reserve’s first rate-hike cycle in nearly a decade looming, traders are working overtime trying to divine its timing and impact on the markets. They are closely monitoring the same employment and inflation data the Fed will use to start tightening. But there’s another little-discussed concern for the Fed, the solvency of the US government. The Fed’s zero-interest-rate policy has spawned a grave US debt bomb.
Back in late 2008, the US stock markets suffered their first true stock panic since 1907. This once-in-a-century fear superstorm proved catastrophic. In a single month leading into October 2008, the flagship S&P 500 stock index plummeted 30.0%. Over 6/7ths of these losses happened in 2 weeks, a massive 25.9% cratering! That exceeded the threshold for a stock panic, which is a 20%+ plunge in a couple weeks.
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Tuesday, October 27, 2015
Fed Headed into Inflation Overdrive / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
Seven years of extraordinary fiscal and monetary stimuli are proving ineffective towards achieving the growth and inflation targets laid out by the Federal Reserve. The Consumer Price Index (CPI), the Producer Price Index (PPI) and Gross Domestic Product (GDP) have all failed to grow over 2%. This is because asset prices, at these unjustified and unsustainable levels, need massive and ever increasing amounts of QE (new money creation) to stave off the gravitational forces of deflation. Fittingly, it isn't much of a mystery that the major U.S. averages have gone nowhere since QE officially ended in October of 2014.
Friday, October 23, 2015
ECB Putting Federal Reserve in a Bad Spot / Interest-Rates / ECB Interest Rates
By: EconMatters
ECB Policy Press Conference
Friday, October 23, 2015
Europe Admits QE Has Failed, Promises More Of It / Interest-Rates / Quantitative Easing
By: John_Rubino
New Age monetary policy has begun to resemble the form of insanity in which a patient repeats the same behavior while expecting a different outcome.
Throughout the developed world, interest rates are at record lows and central banks continue to pump out newly-created currency. Yet growth remains tepid, inflation is nonexistent and debt of every type continues to mount. And instead of recognizing that somewhere in their guiding theory lurks a fatal flaw, governments and central banks just keep upping the ante. Today it was Europe, where central banks have been expanding their balance sheets (i.e. running the printing presses) aggressively…
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Wednesday, October 21, 2015
Insane “Trillion Dollar Platinum Coin” Option Ruled Out By U.S. Treasury To Avert New Debt Crisis / Interest-Rates / US Debt
By: GoldCore
The silly and somewhat insane uber Keynesian “Trillion Dollar Platinum Coin” appears to be now firmly off the table.
The US Congress has once again ruled out the possibility of issuing a “trillion dollar platinum coin” floated as a possible solution to the looming US Debt Crisis.
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Friday, October 16, 2015
Can the Fed Really Print Money? What Would Negative Interest Rates Do? / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Most people believe the Fed can print money. Caught on tape, former Fed chair Ben Bernanke once admitted the Fed prints money.
However, in Hoisington's Third Quarter 2015 Review, economist Lacy Hunt makes the claim the Fed cannot print money. Let's take a look, emphasis mine.
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Thursday, October 15, 2015
What the 'Junk-Bond Crisis' Means for Muni Bonds / Interest-Rates / International Bond Market
By: DW
Dr. David Eifrig writes: It could happen next week... or next month...
Wednesday, October 14, 2015
US Interest Rate Hike Odds For March 2016 Fall Below 50% / Interest-Rates / US Interest Rates
By: Mike_Shedlock
3rd Quarter GDP Forecast Slips to 0.9%
Following today's retail and business sales reports, the Atlanta Fed GDPNow Forecast for third quarter GDP slipped 0.1 percentage points to 0.9%.
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Tuesday, October 13, 2015
Brainard's Wake-up Call to Fed on U.S. Rate Hike Calls / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
The growing inverse correlation between the frequency of Fed speeches and uniformity of the message on monetary policy action cannot be ignored. The newest member of the Federal Reserve Board of Governors hasn't made too many speeches, but her message has been on point since her first speech in June.
In her speech yesterday, Lael Brainard, Federal Reserve Governor since June of this year, dealt a prominent blow to the hawks at the Fed, by contradicting three major premises upon which calls for a 2015 rate hike are built. Having served as Undersecretary of the Treasury for International Affairs for over three years, she knows a few things about international developments. Here are some of the central points of her speech:
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Tuesday, October 13, 2015
The Mindless Stupidity of Negative Interest Rates / Interest-Rates / US Interest Rates
By: MM
MoneyMorning.com By Lee Adler, Editor's Note: We're sharing this Wall Street Examiner column with you today because negative interest rates are destroying trillions of dollars in wealth in Europe right now, cheered on by some of the "smartest" economists in the world – who want to bring NIRP here. Here's Lee Adler with some facts that show why negative rates are a horrible idea…
There are troubling signs that the doves at the Federal Reserve are considering a negative interest rate policy (NIRP) as a way to handle "the next crisis" – and there's always a next crisis…
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Monday, October 12, 2015
Move over ZIRP... Here Comes NIRP! / Interest-Rates / US Interest Rates
By: MoneyMetals
Precious metals prices enter the new week looking to extend the rally that began Oct. 2nd. Silver has gained nearly 10%, and gold is up almost 3.5%. The notion that the Federal Reserve governors may have missed their window to raise interest rates is beginning to sink in with investors.
In fact, if the U.S. economy should fall into recession, investors may see central planners move from zero interest rate policy (ZIRP) to the launch of negative interest rates.
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Monday, October 12, 2015
IMF Fears $3 Trillion Credit Crunch; Lagarde Warns 'IMF Credibility at Stake' / Interest-Rates / Global Debt Crisis 2015
By: Mike_Shedlock
IMF head Christine Lagarde says "IMF credibility is at stake". She blames the US for that development, and calls on US to give more voting power to China to solve the problem.
Sunday, October 11, 2015
Negative Interest Rates Tantalizing Stupidity and the Case for Gold / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Financial Repression Insanity
Purportedly the Fed is ready willing and able to go to next step of financial repression insanity.
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Thursday, October 08, 2015
What Trump and Other Pessimists Don’t Understand About U.S. Debt / Interest-Rates / US Debt
By: Investment_U
Alexander Green writes:I received still more blowback from my last few columns about Donald Trump and the economic pessimists.
Some readers are in no mood to hear anything positive about the state of the country or our current economic situation.
Others realize that the economy is growing, the dollar is strong, inflation is low, American corporations are reporting record profits and U.S. household net worth just hit an all-time high.
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Wednesday, October 07, 2015
Summers Grades Janet Yellen's Fed Performance 'Incomplete' / Interest-Rates / US Federal Reserve Bank
By: Bloomberg
Former Treasury Secretary Larry Summers joined hosts Stephanie Ruhle and David Westin on Bloomberg TV's new flagship morning program, Bloomberg <GO>. He discussed the economy, the 2008 financial crisis, and Janet Yellen's job performance as Federal Reserve Chair.
On what grade he would give Janet Yellen, Summers said: "I'd give her an incomplete because the term is not yet over. But she's done, as I say, I've got great respect for Janet Yellen."
Wednesday, October 07, 2015
QE3 is Over Get Ready for QE4 / Interest-Rates / Quantitative Easing
By: BATR
As the world economy falters and sinks into the abyss of fiscal deflation, the banksters need a new game plan to rescue their debt created monetary system. Notwithstanding, the Federal Reserve would be hard pressed to introduce negative interest rates in the United States as has been tried and tested abroad. Maybe under circumstances of a total meltdown such desperate measures would be forced upon the public, but as conditions presently exist, another dose of quantitative easing is more likely.
Monday, October 05, 2015
Financial Repression – Governments Boost their Coffers and Hold Down Interest Rates / Interest-Rates / US Debt
By: Chris_Vermeulen
Treasury Secretary Jacob Lew said the government will run out of money to pay its bills sooner than previously thought around November 5, 2015. Lacking sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.
Again, another year, to increase the USA debt limit by the government. Will monetary and fiscal policy ever return to “sanity”? Will the political leaders ever become brave enough to quit spending more of the taxpayer’s monies than they bring in without fear of losing elections? Will Americans ever elect someone who doesn’t just promise them more and more “stuff,” and who will just start acting responsibly with the nation’s treasury?
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Monday, October 05, 2015
Fed Interest Rate Hike: "I don't care. It doesn't really make much of a difference" / Interest-Rates / US Interest Rates
By: Bloomberg
Steve Schwarzman, CEO, The Blackstone Group, joined hosts Stephanie Ruhle and David Westin for the debut of Bloomberg TV's new flagship morning program, Bloomberg <GO>. Schwarzman discussed the Federal Reserve, Volkswagen in the wake of the pollution controls scandal,2016, and Ohio State Governor John Kasich.
On whether there will be a rate hike from the Federal Reserve this year, Schwarzman said: "I don't care. It doesn't really make much of a difference. Interest rate hikes of 25% that people have been talking about for 2-1/2 years, I mean really. If you haven't discounted a lot of this stuff, they've got the issue that raising interest rates is probably a good thing. However their problem is that because the US currency has appreciated against almost everyone in the world, in effect, we've had the impact of an interest rate increase already through slowing of the economy."
Monday, October 05, 2015
U.S. Jobs Report Moves Fed One Step Closer to QE IV / Interest-Rates / Quantitative Easing
By: Michael_Pento
The September Non-Farm Payroll Report came in with a net increase of just 142k jobs. The unemployment rate held steady at 5.1% and the labor force participation rate dropped to the October 1977 low of 62.4%. Average hourly earnings fell 0.04% and the workweek slipped to 34.5 hours. There were significant downward revisions of 22k and 37k jobs for the July and August reports respectively.
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Saturday, October 03, 2015
U.S. Interest Rate Hikes Keep On Slippin' Into the Future; Treasury Yields Sink Again / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Treasury Yields Drop Again
Curve Watcher's Anonymous notes a further plunge in yields today following the disastrous payroll and factory order reports.
Yield on the 30-year long bond fell to 2.80% from 2.85% yesterday. Yield on the 10-year note once again sports a 1-handle at 1.97%, down from 2.03%.
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Friday, October 02, 2015
U.S. Rake Hike - Fed Must Thank China and EM / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
The US September jobs report deals a significant blow to the notion of a 2015 Fed hike--against which we consistently disagreed throughout the year - as it achieved the gloomy feat of disappointing across the board -- headline rate (first back-to-back months of sub 200K in 18 months), downward revision in prior months (-59K), notable decline in average hourly earnings, and the unchanged unemployment rate was offset by the decline in the participation rate to a fresh 38-year lows.
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Friday, October 02, 2015
U.S. Three Month Treasury Yields Turn Negative, Recession Warning? / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Curve Watcher's Anonymous points out 3-month treasury yields dipped briefly negative on several days recently.
Yield on the 3-month bond was negative again today. Here is a table I put together with Treasury Yield Quotes from Bloomberg.
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Friday, October 02, 2015
Can You Imagine The Fed Raising Rates In This World? Everything Going Wrong At Once Edition / Interest-Rates / US Interest Rates
By: John_Rubino
After the markets failed to embrace its most recent interest rate dither, the Fed dispatched pretty much its entire PR team to make sure we understood that rates would rise Next Month For Sure.
Then everything kind of fell apart. Emerging market capital flight accelerated…
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Friday, October 02, 2015
US Bond Market - How to Fix This / Interest-Rates / US Bonds
By: John_Mauldin
By Jared Dillian
This is a pickle wrapped in a conundrum surrounded by a puzzle, or something like that. The Fed declined to hike rates, which everyone thought was bullish, and then stocks got on the vomit comet. They’ve been going down on an elevator ever since.
I think what’s interesting here is how shamefully far behind the Fed is on this. Dudley is out there still talking rate hikes. Like, just the other day. He has gone right out of his tree. It’s almost as if he lost his B-Unit and can’t log into Bloomberg.
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Wednesday, September 30, 2015
Junk Bond Market Imminent Collapse Threatens (Unwelcome) BIG Rate Rises / Interest-Rates / International Bond Market
By: Clive_Maund
Everyone is so focused on looking at the Fed and whether or not it decides to raise rates by a puny 0.25%, that they are completely overlooking the fact that it is the market's role to set interest rates, and if the Fed is not up to the job, then the markets will eventually take over and do it in a manner that is likely to involve rises vastly greater than a mere 0.25%, which given the current fragile and extremely unstable debt structure, can be expected to have catastrophic consequences.
Wednesday, September 30, 2015
Panic Is Spreading, Part 1: Surge in Junk Bond Defaults Imminent / Interest-Rates / US Bonds
By: John_Rubino
One of the early signs that a cycle is about to turn down is disorder in junk bonds. That’s because the companies that issue such bonds are by definition financially and/or operationally weak and therefore ultra-sensitive to changes in their environment. A modest drop in, say, consumer spending or the price of wind turbines will hardly be noticed by an Apple or GE but might threaten the survival of those companies’ weakest competitors. And as credit bubbles inflate, the weak in every field tend to proliferate as overexcited bankers and bond funds offer them plenty of rope with which to hang themselves.
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Tuesday, September 29, 2015
Interest Rates All Bad at 0%? / Interest-Rates / US Interest Rates
By: Axel_Merk
We call on central banks to abolish their zero interest rate policy (ZIRP) framework before more harm is done. In our assessment, ZIRP is bad for all stakeholders and may even lead to war.
Friday, September 25, 2015
Central Banks Don't Dictate Interest Rates / Interest-Rates / Central Banks
By: Frank_Shostak
According to mainstream thinking, the central bank is the key factor in determining interest rates. By setting short-term interest rates the central bank, it is argued, through expectations about the future course of its interest rate policy influences the entire interest rate structure. (According to expectations theory (ET), the long-term rate is an average of the current and expected short-term interest rates.) Note that interest rates in this way of thinking are set by the central bank, while individuals in all of this have almost nothing to do and just mechanically form expectations about the future policy of the central bank. (Individuals here are passively responding to the possible policy of the central bank.)
Friday, September 25, 2015
The Fed’s Alice In Wonderland Economy - What Happens Next? / Interest-Rates / US Federal Reserve Bank
By: Casey_Research
By Nick Giambruno
After the president of the United States, the most powerful person on the planet is the chairman of the Federal Reserve.
Ask almost anyone on the street for the name of the U.S. president, and you’ll get a quick answer.
But if you ask the same person what the Federal Reserve is, you’ll likely get a blank stare.
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Friday, September 25, 2015
No U.S. Interest Rate Hike Until 2017, It’s Always 1982 Somewhere / Interest-Rates / US Interest Rates
By: John_Mauldin
By Jared Dillian
First, let’s get the gloating out of the way. I said that the Fed would not hike rates here and here. Nobody likes a chest pounder, so that’s the end of the discussion.
So now, what is the trade? Not only did the Fed not hike rates, but the directive was so dovish, it was far outside the range that any reasonable person thought was possible. Should be bullish, right?
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Friday, September 25, 2015
From ZIRP to NIRP Sudden End of Fed's Ambition to Raise Interest Rates / Interest-Rates / US Interest Rates
By: Alasdair_Macleod
The sudden end of the Fed's ambition to raise interest rates above the zero bound, coupled with the FOMC's[1] minutes, which expressed concerns about emerging market economies, has got financial scribblers writing about negative interest rate policies (NIRP). Coincidentally, Andrew Haldane, the chief economist at the Bank of England, published a much commented-on speech giving us a window into the minds of central bankers, with zero interest rate policies (ZIRP) having failed in their objectives.[2]
Wednesday, September 23, 2015
Time for the Monetary Nuclear Option: Raining Money on Main Street / Interest-Rates / Quantitative Easing
By: Ellen_Brown
Predictions are that we will soon be seeing the “nuclear option” — central bank-created money injected directly into the real economy. All other options having failed, governments will be reduced to issuing money outright to cover budget deficits. So warns a September 18 article on ZeroHedge titled “It Begins: Australia’s Largest Investment Bank Just Said ‘Helicopter Money’ Is 12-18 Months Away.”
Wednesday, September 23, 2015
Federal Reserve Under Yellen / Interest-Rates / US Federal Reserve Bank
By: BATR
Now that the big bluff from the Federal Reserve that interest rates were poised to start their eventual rise has been played, when will the trigger actually be pulled? Assumptions that the Fed act as custodians of the national trust to balance and maintain the economic stability has been proven wrong time and again. Just how well has their efforts translated into the real economy of business activities that reflects positively for the average American? Obviously, if you are not a hedge fund speculator, your response will be guarded at best.
Tuesday, September 22, 2015
Behind the Fed’s Decision: The Government Numbers Don’t Add Up / Interest-Rates / US Interest Rates
By: Rodney_Johnson
After keeping the markets on edge in the days and weeks leading up to today’s decision, the Fed has decided once again to leave interest rates unchanged.As we’ve spent this week discussing “all things Fed,” it’s worth spilling a little ink on what the quasi-government-but-really-private organization is supposed to do.
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Tuesday, September 22, 2015
War on Cash, Bank of England Planning Hyper QE, Scrapping Cash for Digital Currency / Interest-Rates / Central Banks
By: Nadeem_Walayat
The Bank of England announces its latest cunning plan in its ongoing 'War on Cash' under the cover of Europe's refugee crisis that is witnessing Eastern European hypocrisy, such as that of Hungary forgetting its own past of sending hundreds of thousands of refugees westwards for over 60 years, and the most recent wave of 1 million or so of economic migrants many of whom receive in work benefits such as tax credits, nevertheless balk at the thought of giving refuge to a single refugee and instead have mobilised their crack troops against defenseless men, women and children.
Monday, September 21, 2015
Why The Big Banks Want Higher Interest Rates / Interest-Rates / US Interest Rates
By: John_Rubino
Something strange is happening in the banking business.
In theory, a low interest rate environment is good for banks because it allows them to borrow money for next to nothing and lend it to auto or home buyers for considerably more, making a nice fat spread.
And that’s pretty much how it’s been going. U.S. bank earnings were up 7% y-o-y in the second quarter, to a record $43 billion. Bank lending rose across the board from industrial to auto to mortgage loans, and delinquencies fell for the 21st consecutive quarter.
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Sunday, September 20, 2015
R.I.P. Interest Rates / Interest-Rates / US Interest Rates
By: Investment_U
Andrew Snyder writes: I went to the doctor Friday morning. What a problem we have.
“How’s the pain? Do you want some pills for that?” he asked.
“No thanks, doc. Let’s just figure out what’s causing it.”
Read full article... Read full article...
Sunday, September 20, 2015
Has the Fed Lost its Mojo? / Interest-Rates / US Federal Reserve Bank
By: Mike_Whitney
After 6 full years of zero rates and extreme pump-priming that flushed more than $10 trillion dollars into global markets, the Federal Reserve decided that even the slightest uptick in its benchmark Fed Funds rate would trigger enough destructive volatility in emerging markets that it would be better to postpone the rate hike until some unknown date in the future. The announcement that the FOMC planned to keep rates pegged at zero sent stocks briefly higher after which they fell sharply pushing global indices deep into the red.
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Saturday, September 19, 2015
Higher U.S. Interest Rates? Not Next Month, Not Even Next Year, In Three Charts / Interest-Rates / US Interest Rates
By: John_Rubino
Not only did the Fed vote to keep interest rates stable yesterday, it did so overwhelmingly -- with just as many members apparently favoring lower rates as higher. Now all the people who bought the "rate normalization" promise/threat are backtracking. From today's Bloomberg:
Friday, September 18, 2015
Groundhog Day at the Fed / Interest-Rates / US Interest Rates
By: Peter_Schiff
Every dictator knows that a continuous state of emergency is the best means to justify tyrannical policies. The trick is to keep the fictitious emergency from breeding so much paranoia that routine activities come to a halt. Many have discovered that its best to make the threat external, intangible and ultimately, unverifiable. In Orwell's 1984 the preferred mantra was "We've always been at war with Eurasia," even though everyone knew it wasn't true. In its rate decision this week the Federal Reserve, adopted a similar approach and conjured up an external threat to maintain a policy that is becoming increasingly absurd.
Friday, September 18, 2015
Three Reasons Why the U.S. Government Should Default on Its Debt Today / Interest-Rates / US Debt
By: Casey_Research
The overleveraging of the U.S. federal, state, and local governments, some corporations, and consumers is well known.
This has long been the case, and most people are bored by the topic. If debt is a problem, it has been manageable for so long that it no longer seems like a problem. U.S. government debt has become an abstraction; it has no more meaning to the average investor than the prospect of a comet smacking into the earth in the next hundred millennia.
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Friday, September 18, 2015
Fed Remains Paralysed by Fear, Keeps U.S. Interest Rates on Hold at 0.25% / Interest-Rates / US Interest Rates
By: Nadeem_Walayat
The FOMC once more decided to do nothing and keep US interest rates on hold at the panic low level of 0.25% with speculation now switching to whether the Fed will finally get the balls to raise interest rates at its October meeting, or will the Fed chicken out once more fearing that they may spark Financial Collapse 2.0.
Friday, September 18, 2015
The Central Bankster Crucifix / Interest-Rates / Central Banks
By: Barry_M_Ferguson
The FRB, the ECB, the PBoC, and the BoJ are all central banksters. It matters not which country they infest. It matters not which form of gooberment they act as marionette. It matters not how much economic destruction they instigate. Their wicked intent is the same. Total power. Total domination. Total rule. Total control. Total enslavement.
Friday, September 18, 2015
Fed Keeps US Interest Rates Unchanged - Comparison of Sep and July Statements / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
The Fed kept rates unchanged with an unambiguously dovish statement, focusing on weakening inflation, rising market turbulence and a new reference to foreign developments. The dot forecasts pointed to slower growth and lower core inflation and lower fed funds projections. The only hawkish dissent to the decision was from Richmond Fed's Lacker, but this point was made moot by not only due to Lacker's well documented hawkish stance, but also by the fact that the dot plot showed one Fed member expecting negative rates, even if this member is the widely dovish Minneapolis Fed's Kocherlakota.
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Thursday, September 17, 2015
Stock Market Optimism Ahead Of Fed's Interest Rate Decision Release / Interest-Rates / US Interest Rates
By: Paul_Rejczak
Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is neutral, and our short-term outlook is neutral:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish
Thursday, September 17, 2015
Don't Buy the Fed's New "Bribe-a-Bank" Interest Rate Policy / Interest-Rates / US Interest Rates
By: ...
MoneyMorning.com Lee Adler writes: After seven long, strange years, we're now looking at the end of ZIRP as we know it.
And good riddance, too. It's been a disaster for the U.S. economy, the middle class, the housing market – just about every facet of American economic life has suffered from this fiscal disaster masquerading as coherent monetary policy.
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Thursday, September 17, 2015
U.S. Fed Must Avoid Bank of Japan Errors / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
No, the US is not Japan and the Federal Reserve is not the Bank of Japan. But when we assess the implications of what could be the first Fed rate after 7 years of zero interest rate policy in the US, there's no better reference than the BoJ.
Wednesday, September 16, 2015
Lowdown on U.S. Rate Hikes / Interest-Rates / US Interest Rates
By: Axel_Merk
Will she raise or will she not? As financial markets focus on whether we will see a Fed rate hike this week, investors may be in for a rude awakening.
Wednesday, September 16, 2015
U.S. Interest Rate Hike - Will The Fed Pick A Winning Combination? / Interest-Rates / US Interest Rates
By: Raul_I_Meijer
It’s highly amusing to read all the ‘expert’ theories on a Federal Reserve hike or no hike tomorrow, but it’s also obvious that nobody really has a clue, and still feel they should be heard. Don’t know if that’s so smart, but I guess in that world being consistently wrong is not that big a deal.
Thing is, US economic numbers are so ‘massaged’ and unreliable, the Fed can pick whichever way the wind blows to argue whatever decision it makes. As long as jobs numbers get presented for instance without counting the 90-odd million Americans who are not in the labor force, and a majority of new jobs are waiters, just about anything goes in that area. Numbers on wages are just as silly.
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Tuesday, September 15, 2015
One and Done Fed is a Wall Street Fantasy / Interest-Rates / US Interest Rates
By: Michael_Pento
One of the current myths promulgated by Wall Street is that the Federal Reserve will raise rates once this year, breathe a sigh of relief, and be done until the "12th of never". But those who are familiar with our central bank's history are aware that the Federal Open Market Committee (FOMC) has never tightened the Fed Funds Rate just once. A quarter point hiking cycle has no historical basis and is just wishful Wall Street thinking.
Monday, September 14, 2015
Next Generation QE Money Printing Coming Soon / Interest-Rates / Quantitative Easing
By: John_Rubino
The intellectual groundwork is being laid for the next stage of the Money Bubble, and it's going to be epic. Here are excerpts from two articles that appeared over the weekend (and which should be read in their entirety). Both deal with Japan, which went all-in on debt monetization, lost badly, and now needs a new plan.
Sunday, September 13, 2015
How the Fed Is Hurting U.S. Manufacturing / Interest-Rates / US Federal Reserve Bank
By: Investment_U
Sean Brodrick writes: Whether he deserves it or not, Obama is getting kudos on his handling of the economy, particularly the declining unemployment rate. In August, the official headline unemployment rate dropped to 5.1%. But that same jobs data out of the Bureau of Labor Statistics (BLS) contained some sobering news: Manufacturing payrolls are getting shredded.
Sunday, September 13, 2015
Three Critical and Disturbing Facts About the Debt Market / Interest-Rates / US Bonds
By: Investment_U
Andrew Snyder writes: The next five days are going to be some of the most important days for investors in recent history. What happens next will set the stage for big profits or a sustained downturn.
We are worried about what the Fed has done to the interest rate game. As Yellen and her troops prepare to raise rates for the first time in over half a decade, the distortions they created in the market have become flat-out dangerous.
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Saturday, September 12, 2015
The US Has Already Tightened — Which Explains A Lot / Interest-Rates / US Interest Rates
By: John_Rubino
Next week we’ll find out if the longest-ever will-they-or-won’t-they drama involving a virtually insignificant quarter-point interest rate change will amount to anything. But either way, US monetary policy is already a lot tighter than it was a year ago.
The Fed’s balance sheet, for instance, is a measure of how much new currency it is pumping into the banking system. And it’s up only $79 billion, or 1.8%, in the past year. In real terms, that’s flat to slightly negative.
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Friday, September 11, 2015
Bloomberg Interest Rate Hike Odds Still Wrong; Deflationary Bust Coming / Interest-Rates / US Interest Rates
By: Bloomberg
As of September 10, the CME has the of a September hike by the Fed at 24%. Bloomberg says the probability of a move is 28%.
Thursday, September 10, 2015
Confusions About Interest Rates Part 2 / Interest-Rates / Economic Theory
By: Frank_Hollenbeck
Following the 2001 dot-com crisis, interest rates were lowered to 1% and then slowly raised to 5% over a 4-year period. This timid policy still created a massive bubble in housing that finally bust in 2008. Instead of learning from the past, we doubled down on this same failed policy. Interest rates were then lowered to 0% and have been held there with little political will to raise them one iota.
We are now on the eve of another major financial crisis, yet economists (except Austrians) still don’t really understand the role played by interest rates in a capitalist economy. To avoid repeating economic mistakes of the past, we must understand the faulty logic that led us to these errors.
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Thursday, September 10, 2015
Confusion About Interest Rates Part 1 / Interest-Rates / Economic Theory
By: Frank_Hollenbeck
Since 2008, central banks have rushed to lower interest rates to spur growth. This has induced mal-investments in almost all asset classes. For example, with oil prices below $50 a barrel and trending lower, the shale oil industry is in serious trouble as is the banking industry that lent it over $1 trillion.
Of course, economists and faulty economic theory are 100% responsible for what is to come. The professional economist today is like the doctor of the past whose prescription to bleed the patient was considered state-of-the-art medicine; the cure, of course, being much worse than the disease.
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Wednesday, September 09, 2015
Why the Greeks Should Repudiate Their Government’s Debt / Interest-Rates / Eurozone Debt Crisis
By: MISES
Simon Wilson writes: In apportioning blame for the Greek government debt crisis, it would be difficult not to lay the major share on Greece itself. With government jobs paying three times the private sector average, a national rail service with a wage bill four times its annual revenue, a public pension system that would pay out generous benefits at fifty for anyone classified as working in “arduous” professions like hairdressing, there is no shortage of taxpayer-funded largesse running rampant through Greek society.
Wednesday, September 09, 2015
Fed Interest Rate Tightening Cycles and USD Performance / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
Is the peak of the US dollar behind us? Depending on your USD measure of choice, the dollar may have already peaked, when using EUR and JPY, the two largest and most liquid currencies aside from the greenback. If the bulk of the USD bull market starting in summer 2014 was based on heightened expectations of a Fed hike, then would an actual Fed hike signal the peak of the US dollar? Here is our analysis on the response of the US dollar to each of the last three Fed tightening cycles (1994-1995, 1999-2000 and 2004-2006). One common theme was found.
Tuesday, September 08, 2015
Here's Your Insurance Against a $200 Trillion Debt Bubble Crash / Interest-Rates / Global Debt Crisis 2015
By: ...
MoneyMorning.comPeter Krauth writes: The world is awash in debt, and it's simply unsustainable. As worldwide debt levels keep setting new records, there's no chance anyone will ever be paid back.
Even "vampire squid" Goldman Sachs Group Inc. (NYSE: GS), with its tentacles deep into bond markets, thinks so.
The world's central banks now have an insurmountable dilemma: Raising interest rates will just increase the repayment burden. Keeping them low will only inflate the debt bubbles all over.
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Monday, September 07, 2015
4 Reasons Why the Fed Will Try Quantitative Easing - REDUX / Interest-Rates / Quantitative Easing
By: Dr_Jeff_Lewis
While we were led to believe that the Fed would begin tightening upon recovery, new fears of a double dip have sparked the Keynesian clan into moving in the opposite direction. Soon enough, we believe, a new quantitative easing program will be unveiled.Read full article... Read full article...
Friday, September 04, 2015
Meet QT; QE's Evil Twin / Interest-Rates / Quantitative Easing
By: Peter_Schiff
There is a growing sense across the financial spectrum that the world is about to turn some type of economic page. Unfortunately no one in the mainstream is too sure what the last chapter was about, and fewer still have any clue as to what the next chapter will bring. There is some agreement however, that the age of ever easing monetary policy in the U.S. will be ending at the same time that the Chinese economy (that had powered the commodity and emerging market booms) will be finally running out of gas. While I believe this theory gets both scenarios wrong (the Fed will not be tightening and China will not be falling off the economic map), there is a growing concern that the new chapter will introduce a new character into the economic drama. As introduced by researchers at Deutsche Bank, meet "Quantitative Tightening," the pesky, problematic, and much less disciplined kid brother of "Quantitative Easing." Now that QE is ready to move out...QT is prepared to take over.
Friday, September 04, 2015
Bill Gross: Jobs Report Means ‘Fifty-Fifty’ Chance of Fed Sept Interest Rate Move / Interest-Rates / US Interest Rates
By: Bloomberg
Bill Gross of Janus Capital spoke with Bloomberg's Tom Keene and Michael McKee on Bloomberg Radio and Television about today's jobs numbers, the markets and Fed policy.
When asked whether the Fed will raise rates on September 17th, Gross said: "I still think it’s 50/50 and China and global conditions are the dominant factor. Otherwise, I would have said, yes, I think Fischer and Yellen and maybe even Dudley their fingers are itching."
Thursday, September 03, 2015
ECB Preempts Fed Inaction, PBOC Action / Interest-Rates / ECB Interest Rates
By: Ashraf_Laidi
The ECB succeeded in weakening the euro and bund yields with an aggressive downgrade of 2015-2017 forecasts for GDP and CPI, while announcing an increase in the issue share limit of bonds included in QE purchases to 33% from 25%. The increased limit means the ECB can buy a higher share of an individual nation's bond issue, giving it more freedom of concentration in particular issues.
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Thursday, September 03, 2015
The Student Loan Crisis Is Mounting / Interest-Rates / Student Finances
By: Peter_Schiff
Addison Quale writes: "You need a college degree to succeed in America." This idea has become so commonplace that the right to higher education is now a core issue in most political platforms. What if a young person cannot afford a college degree? The "obvious" answer from politicians on both sides of the aisle is that the government should subsidize them. Very few are brave enough to ask the far more important question: "At what cost?"
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Tuesday, September 01, 2015
Forget Decoupling - The Fed will NOT Raise Interest Rates this Year / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
USD under renewed pressure from a combination of renewed China data disappointment, weak US manufacturing ISM and lingering chatter of a September Fed hike. US stock futures began selling off 6 hours before the release of China's manufacturing PMI, which showed the first contraction in six months and the lowest figure in three years. The largely-weaker than expected manufacturing ISM (lowest in 27 months) was accompanied by broader weakness in all components.
Thursday, August 20, 2015
The Fed Talks And The Market Tanks. That’s Different / Interest-Rates / US Federal Reserve Bank
By: John_Rubino
Normally there’s a distinct pattern to the impact of Federal Reserve statements on the financial markets. The tone of equities trading in particular starts to improve as the moment of the announcement approaches; the words turn out to be blandly positive, full of promises of easy money and upbeat forecasts; and share prices soar for a day or two. It’s been thus for most of the past six years, leading large numbers of new investors and recently-minted analysts and traders to see the Fed as a modern version of Plato’s philosopher king, wielding absolute power to achieve perfect justice in the form of rising asset prices.
Thursday, August 20, 2015
Trumping the Federal Debt Without Playing the Default Card / Interest-Rates / US Debt
By: Ellen_Brown
In a post on "Sovereign Man" dated August 14th, Simon Black argued that Donald Trump may be the right man for the presidency:
Read full article... Read full article...[T]here's one thing that really sets him apart, that, in my opinion, makes him the most qualified person for the job:
Thursday, August 20, 2015
Another Day Younger and Deeper in Debt / Interest-Rates / US Debt
By: John_Mauldin
My friend Neil Howe, author of Generations, The Fourth Turning, and other books and president of Saeculum Research, joins us today in Outside the Box with a succinct, eye-opening essay on generational differences in debt levels and attitudes towards debt.
I often write about the problems that come with overindebtedness, but we’re usually talking about public debt, here in the US or abroad. But personal or household debt in America is nearly as massive as government debt, as this chart shows:
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Tuesday, August 18, 2015
How to Avoid Puerto Rico's Debt Crisis and Make Money on It / Interest-Rates / Global Debt Crisis 2015
By: ...
MoneyMorning.com Shah Gilani writes: Puerto Rico is desperately trying to reorganize its $72 billion debt, but it faces a unique hurdle…
You see, it's an unincorporated territory, not a state. It can't actually declare Chapter 9 bankruptcy.
Without those legal protections, the Caribbean island is clearly sunk.
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Tuesday, August 18, 2015
A Street Car Named U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Michael_Pento
sIn the 1947 Tennessee Williams play "A Streetcar Named Desire" as she is being carted off to the mental institution Blanche Dubois utters these famous words ... "I have always depended on the kindness of strangers."
And like Ms. Dubois, the United States has also come to depend on the kindness of strangers to fund a massive $18.3 trillion in debt.
But that kindness the US Treasury has come to depend upon may be waning. Foreign holdings of U.S. Treasury securities fell in May for a second straight month. The Treasury Department reported total holdings were down 0.1% in May to $6.13 trillion. This comes after an even bigger 0.6% decline in April.
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Friday, August 14, 2015
Fed will Cut 'Transitory' in September / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
A Russian saying goes "nothing is more permanent than temporary". At the Federal Reserve, "transitory" may mean "permanently", or could also mean "we have no clue". Oil has dropped by 57% since over the last 12 months but the +200 PhDs at the world's biggest central bank continue to describe lower energy prices as "transitory". At the June FOMC, the Fed made some progress and finally dropped its phrase from the FOMC statement that "energy prices have stabilized".
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Friday, August 14, 2015
Inside the Bank of England - Video / Interest-Rates / Central Banks
By: Anika_Walayat
Take a journey from a unique perspective into the very heart of Britain's financial system, it's central bank, the Bank of England.
Friday, August 14, 2015
Debt Deleveraging as a Biblical Plague / Interest-Rates / Global Debt Crisis 2015
By: Raul_I_Meijer
Eventful days in the middle of summer. Just as the Greek Pandora’s box appears to be closing for the holidays (but we know what happens once it’s open), and Europe’s ultra-slim remnants of democracy erode into the sunset, China moves in with a one-off but then super-cubed renminbi devaluation. And 100,000 divergent opinions get published, by experts, pundits and just about everyone else under the illusion they still know what is going on.
We’ve been watching from the sidelines for a few days, letting the first storm subside. But here’s what we think is happening. It helps to understand, and repeat, a few things:
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Thursday, August 13, 2015
China’s Doing Yellen’s Job and Creating a Trillion Dollar Profit Pivot / Interest-Rates / US Interest Rates
By: Money_Morning
Keith Fitz-Gerald writes: Despite what the markets seem to think and many news sources would have you believe, China’s move to devalue the yuan by 1.9% is not an act of desperation intended to prop up a failing economy. It’s not a surprise. And, it sure as heck is not the end of the financial universe as we know it.
Instead, it’s a brilliant move that singlehandedly changes the investing landscape and creates a fabulous new set of profits if you’ve got the guts and the smarts to make your move.
Read full article... Read full article...
Thursday, August 13, 2015
German-US Bond Yield Spread Breaks Out / Interest-Rates / International Bond Market
By: Ashraf_Laidi
Bond yields fell across the board since mid-June, but the more meaningful fact for currency traders remains yield differentials. For EURUSD watchers, the rate of decline in 10-year bund has been slower than its US counterpart, which led to a stabilisation in the German-US spread (not US-German) to the extent of breaking above an important 3 ½ year trendline.
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Wednesday, August 12, 2015
Junk Bonds - The Next Financial Disaster Starts Here / Interest-Rates / International Bond Market
By: Casey_Research
By Dan Steinhart
Individual investors take note…
Some of the world’s best money managers are betting on the biggest financial disaster since 2008.
You won’t hear about this from the mainstream media. Networks like NBC or CBS don’t have a clue… just like they didn’t have a clue the US housing market would collapse in 2007.
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Wednesday, August 12, 2015
10yr Treasury Notes / Interest-Rates / US Bonds
By: Ed_Carlson
TNX, the yield on the 10 year Treasury note, fell for the fourth week in a row with a loss of 1.36% to close at 21.75 on Friday after challenging the 30-dma earlier in the week. TNX remains in the 2015 trend channel and should find support at the lower boundary and 200-dma both which are near 21.34.
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Tuesday, August 11, 2015
Greenspan Warns Be Afraid of U.S. Bond Market Bubble / Interest-Rates / US Bonds
By: Bloomberg
Former Federal Reserve Chairman Alan Greenspan spoke with Bloomberg's Tom Keene about the U.S. economy, bond market and Fed policy.
On how afraid we should be of bubbles, Greenspan said: "Very much so. I think we have a pending bond market bubble. If we merely substitute the structure of equity prices and we have the price of bonds and instead of expected equity return we do have expected interest rate return. That price earnings ratio is an extraordinarily unstable position."
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Monday, August 10, 2015
U.S. Dollar QE Death Sentence, Us Treasury Bond Black Hole / Interest-Rates / US Bonds
By: Jim_Willie_CB
Rather than stimulus, the USFed's Quantitative Easing is a death sentence for the USDollar. It might provide an ongoing backdoor bailout opportunity for Wall Street banks, and even a window for China to switch from long dated to short dated USTreasurys, but QE is death sentence. It guarantees that the USDollar will be removed from the global premises and placed in the dustbin of history. Foreign banking systems are largely devoted to USTBonds as the foundation for their entire reserves system. The African type of hyper monetary inflation blessed as good and fine stimulus is a sentinel signal by the US Federal Reserve itself, given to the Eastern producing nations who save in the $billions. They will start a caravan to exit the USDollar in their banking systems. They have great challenges in doing so, and must follow a prescribed path. That path is the Chinese RMB as an intermediary device, a transition tool. The goal is the return of the Gold Trade Standard, which will assure the return to the Gold Currency Standard and the Gold Banking Standard. The absent solution to the chronic global financial crisis has been the refusal to put Gold at the apex. Instead, the big banks have become zombies, the economies have become sclerotic, the financial structure have been control rooms, the bond platforms have been fracturing, while the USGovt has relied upon bond fraud, gold thefts, the printing press, and predatory wars to defend the King Dollar regime. It is due for the funeral pyre.
Sunday, August 09, 2015
The Unseen Consequences of Zero-Interest-Rate Policy / Interest-Rates / US Interest Rates
By: MISES
Ronald-Peter Stöferle writes: In a dynamic economy, an action not only triggers just one effect, but always an entire series of different consequences. While the cause of the first effect is easily recognizable, the other effects often occur only later and no such recognition occurs. Frédéric Bastiat described this phenomenon in 1850 in his ground-breaking essay “What Is Seen and What is Not Seen”:
Read full article... Read full article...In the economic sphere, an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them …
Friday, August 07, 2015
Fed Taper Tantrum Coming? It Won't Be Where Nearly Everyone Is Looking! The Next Tantrum / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Investors have been expecting another "Taper Tantrum" when the Fed starts hiking.
The term "Taper Tantrum" refers to the surge in US treasury yields (global government bond yields as well), in summer of 2013 when then-Fed Chairman Ben Bernanke put a spotlight on the wind down of Fed asset purchases (tapering off QE).
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Tuesday, August 04, 2015
Treasury Positioning at Odds with Fed Interet Rate Hike / Interest-Rates / US Interest Rates
By: Ashraf_Laidi
Why is positioning in US 10-year treasury notes at its most bullish levels in 27 years despite several FOMC members calling for at least one rate hike this year? The latest positioning figures from the CFTC show longs exceeding shorts by 65,642 contracts, the biggest net long position since May 2013. Such growing bullishness on the 10-year treasury is consistent with the 5-week decline in bond yields, which coincided with plunging oil prices.
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Saturday, August 01, 2015
QE Fails In Japan: Inflation Nonexistent, Consumer Spending Drops, More Ease Coming / Interest-Rates / Quantitative Easing
By: John_Rubino
After nearly three decades of stagnation, Japan in 2013 went all-in, ordering its central bank, the Bank of Japan, to buy pretty much every bond on the market with newly-created yen. The BoJ's balance sheet -- a rough proxy for the amount of money it has created and dumped into the economy -- soared at a rate that dwarfs, in relation to GDP, the US Fed's QE programs.
Monday, July 27, 2015
Are We Seeing a Trend Reversal with U.S. Interest Rates? / Interest-Rates / US Interest Rates
By: Submissions
Frank Suess writes: In the second quarter, we saw a jump in yields across the board. The yield of 10-Year US Treasuries jumped from 1.9% to 2.4% over the course of the quarter, representing a yield increase of 50 bps. This led to a decline of almost 2% in the Bloomberg US Treasury Bond Index. In Europe the development was much more dramatic; over the quarter, the Bloomberg German Sovereign Bond Index lost around 4.5% in value. This was due to an increase in the German 10-Year yield from 0.2% to 0.8% (60 bps). It is not completely clear what sparked the massive yield increase in Europe. It might have been a technical correction due to the very high prices bonds were trading at, increased risk aversion towards Europe due to the situation in Greece (Bill Gross even called shorting German bunds "the short of a lifetime"), or possibly aggressive short positions by some investors.
Friday, July 24, 2015
A Bond Market Crisis Is Coming... Here's What to Do / Interest-Rates / US Bonds
By: DailyWealth
Dr. David Eifrig writes:
Wall Street is already sending warning signals about the next financial cataclysm. Analysts are using phrases like "liquidity crunch" and "crisis situation."
It could happen next week... or next month...
Predicting exactly how a crisis will happen is difficult. Predicting exactly when is impossible.
Read full article... Read full article...
Friday, July 24, 2015
Not Your Father’s Inflation / Interest-Rates / Global Debt Crisis 2015
By: Dr_Jeff_Lewis
“Profound ignorance masquerading as wisdom - all the worse from the mouths of the prestigious, the PhD, the Nobel Prize winner….” - UnknownIt’s time to revisit British economist Peter Warburton’s April 2001 classic tome “The debasement of world currency: It’s inflation but not as we know it“.
Our friend from GATA, Ed Steer brought it to attention once again.
Read full article... Read full article...
Friday, July 24, 2015
Misperceptions Create Significant Bond Market Value / Interest-Rates / US Bonds
By: John_Mauldin
In today’s Outside the Box, my good friend Lacy Hunt of Hoisington Investment Management reminds us that since the 1990-91 recession, the 30-year Treasury bond yield has dropped from 9% to 3%, a downward move nearly identical to the decline in the rate of inflation, which fell from just over 6% in 1990 to 0% today. Therefore, Lacy says, “(I)t was the backdrop of shifting inflationary circumstances that once again determined the trend in long-term Treasury bond yields.”
Thursday, July 23, 2015
The ‘Real’ Reason the Fed Wants to Raise Interest Rates / Interest-Rates / US Interest Rates
By: Gary_Tanashian
In case you thought you were smart enough to know why the Fed wants to do what it supposedly wants to do [1] MarketWatch sets you straight with the real scoop. We’ll use this as a talking point and see what comes of it…
Here’s the real reason the Fed wants to raise rates
Policy makers want to give themselves some room to maneuver
That is the commonly held belief and who am I to dispute it? A big part of the problem is and has been their refusal to begin a journey toward normalization 2 years ago, when the economy began to visibly (we noted the seeds of that improvement in January of that year) improve. They had no confidence and I was left to wonder (aloud here, frequently and I am sure, sometimes obnoxiously) why Grandma [2] (and her 0% savings account payout) had to continue to bear the brunt of this non-action despite a recovering economy.
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Wednesday, July 22, 2015
Market Bubble in Trouble? Rinse & Repeat / Interest-Rates / Liquidity Bubble
By: EWI
Our new, FREE report shows you specific areas of the U.S. stock market that have become dangerously frothy
When I was in college, I had this weekly ritual. I'd drive home to my parents' house every Friday, run inside to say hello, grab some food, and leave several bags of dirty laundry to be picked up the next morning.
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Friday, July 17, 2015
Bonds and Currencies Brace for BoE and Fed Interest Rate Hikes / Interest-Rates / Central Banks
By: Gary_Dorsch
It's approaching that time of year when traders and central bankers alike depart for long holidays. But this summer is shaping up to be anything but quiet for markets, with betting on a "Greek Exit" from the Euro roiling markets, and Red-chip stocks in China nose diving and requiring unprecedented "Plunge Protection Team" intervention in order to halt the onslaught. After a few weeks of turmoil, the Greek debt crisis has been kicked down the road for another few years, with another EU bailout, and after the Shanghai red-chip index, staged a +10% rebound from its panic bottom lows hit on July 7th, traders now regard these sideshows as "fixed" and under the control of their central planners. With these worries can be put on the back burner for now, it's back to business as usual, - that is to say, back to investing in heavily manipulated markets, in which extreme emergency policies, such as NIRP, ZIRP, and QE have distorted the pricing of virtually all assets, and where your local central bank has your back.
Wednesday, July 15, 2015
The U.S. Fiscal Grand Canyon and the Cycle of Hyperinflation / Interest-Rates / US Debt
By: Dr_Jeff_Lewis
The cycle of hyperinflation is already upon us. It was set in motion long ago. We are in the ultimate conundrum. Politically, the US Government, Treasury, and Central Banks must satisfy - pay for - unfunded liabilities and promises.
But the “money” is is simply a desperate conjuring meant to keep the doors of government open.
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Tuesday, July 14, 2015
Has The Federal Reserve Missed Its Chance To Increase Interest Rates / Interest-Rates / US Interest Rates
By: AnyOption
The finance news space has been bombarded with so many different stories recently that many are starting to forget about one of the biggest stories in the space that we've seen throughout the year; the Federal Reserve. If you remember back to the beginning of the year, there were quite a bit of talks about a Federal Reserve interest rate hike that was to come in June, then it was September, and now, the story seems to have dissipated. Nonetheless, it's still a very important issue to follow; and more importantly, the landscape has changed quite a bit. So today, we'll talk about why Federal Reserve interest rates are so important, how the landscape has changed with regard to the topic, and why I think the Fed may have missed its chance to act. So, let's get right to it...
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Saturday, July 11, 2015
From Tsipras Proposal to Yellen's Speech / Interest-Rates / Eurozone Debt Crisis
By: Ashraf_Laidi
This afternoon's speech by Fed Chair Yellen at 12:30 Eastern (16:30 GMT/17:30 BST) is expected to reveal her reiteration the message that more will be needed from jobs and inflation before rates lift-off, especially 48 hours before another emergency EU/Greece summit. Yellen's take on the China and Greece issues will undoubtedly be highlighted as to be taken into consideration by the Federal Reserve. Yellen will be asked more on these global issues on Wednesday's semi-annual testimony to Congress (a crucial hour, coinciding with the Bank of Canada decision).
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Friday, July 10, 2015
The Central Bankers Dilemma / Interest-Rates / Central Banks
By: Dr_Jeff_Lewis
We are playing with fire.
How quickly we forget about the power of compounding interest - in reverse.
The world is limping along at ultra low interest rates. Otherwise benign movements from such extreme lows are magnified beyond comprehension. An equivalent interest rate move up from 10% has a tiny overall effect, compared with the same move up from lower rates.
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Friday, July 10, 2015
Puerto Rico Debt Crisis: Should U.S. Investors Care? (Video) / Interest-Rates / Global Debt Crisis 2015
By: EWI
White House: No U.S. bailout for Puerto Rico
Editor's note: You'll find the text version of the story below the video.
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Wednesday, July 08, 2015
China Crash, Can You Imagine The Fed Raising Rates In This World? / Interest-Rates / US Interest Rates
By: John_Rubino
$1.4 trillion of Chinese stocks have stopped trading. Greece is finally imploding. The US trade deficit is widening on falling exports.Copper just fell back to 2009 levels. And safe-haven capital flows are revving up again, with Swiss 10-year bonds once again trading with negative yields.
Tuesday, July 07, 2015
Greece Will Lead the West Into a Debt Implosion / Interest-Rates / Global Debt Crisis 2015
By: Graham_Summers
For over 30 years, sovereign nations, particularly in the West have been buying votes by offering social payments in the form of welfare, Medicare, social security, and the like.
When actual bills came due to fund this stuff, Governments quickly discovered that current tax revenues couldn’t cover it (see the image below)… so they issued sovereign debt to make up the difference.
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Thursday, July 02, 2015
The Fuse of the Global Debt Bomb Has Been Lit / Interest-Rates / International Bond Market
By: Graham_Summers
Greece defaulted on a debt payment to the IMF last night at midnight.
Regardless of anything else, we have now seen a developed country “go over the cliff” in terms of negotiating debt payments. This will have global implications for other indebted countries in terms of negotiating tactics going forward.
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Wednesday, July 01, 2015
German Bunds See no GrExit / Interest-Rates / Eurozone Debt Crisis
By: Ashraf_Laidi
The Bunds-Euro relationship remains intact, as both continue to converge along the crucial trendline support since the April bottom. With yet another yields bounce off the support today, bunds are further eliminating Grexit scenario for now as does the single currency.
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Thursday, June 25, 2015
Fed Taper Talk, And The $10 Bill / Interest-Rates / US Interest Rates
By: Steve_H_Hanke
Since May 2013, Fed taper talk has fluctuated between hot and cold. When it’s hot, the markets anticipate a monetary tightening and prices become volatile.
Recently, speculation about just when the Fed will increase interest rates has reared its head, again. Since early 2013, I have said that the Fed would not act until late 2015. Well, it’s now approaching that date and I think the Fed will act, but later, rather than earlier.
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Thursday, June 25, 2015
When a Bond Is Not a Bond / Interest-Rates / International Bond Market
By: John_Mauldin
By Jared Dillian
I don’t know anything about Greece. I actually make it a point not to.
What I’ve found over the course of my career is that the closer people get to an issue, the worse their predictive power is. The forest-for-the-trees phenomenon. Like all the economists who do nothing but watch the Fed, every piece of data, every speech. Their track record in predicting interest rate moves is worse than everyone else’s!
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Thursday, June 25, 2015
When Will US Debt Hit the Wall? / Interest-Rates / US Debt
By: DeviantInvestor
As I see it, the following are true:
- Debt is increasing far more rapidly than growth in the underlying economies that must support that debt. Although this is also true in Japan, the UK, and Europe, I’ll focus on the US.
- Revenue is increasing but less rapidly than debt. This is a problem.
- There will come a time when the interest payments on exponentially increasing government debt will exceed what the economy can support. Call that point “hitting the wall.”
- Higher interest rates will cause the US economy to “hit the wall” sooner. Lower interest rates merely delay the “day of reckoning.”
Thursday, June 25, 2015
European Empire Strikes Back Against Greek Debt Fantasy, Counting Down to GREXIT / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
Greece has managed to survive Monday, Tuesday and Wednesday's bank runs that continue on a DAILY basis courtesy of the Euro-zone tax payer forced to step in as the ECB is provides the Greek banks with daily liquidity that totals every single Euro that is being withdrawn from the Greek banks by fearful depositors as Greece continues to count down to debt default on 30th of June. The question is will Greece survive Thursday? Friday? and off course the 30th of June deadline?
Tuesday, June 23, 2015
Long Term Interest Rates Are On The Up…What’s Next? / Interest-Rates / US Interest Rates
By: Harry_Dent
The Fed has delayed a rate hike yet again. It seems convinced the economy isn’t ready to survive on higher short-term rates. So we continue to see zero rates to stimulate more economic activity. But today the market is proving just how limited the Fed’s influence really is!I’ve been warning for years now that there is a limit to how much you can stimulate the economy with free money and zero interest rate policies before the financial drugs no longer work. Eventually, the system breaks down from excessive debt and overexpansion.
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Tuesday, June 23, 2015
The Greek Debt Crisis Investor Opportunity That's Being Missed / Interest-Rates / Eurozone Debt Crisis
By: ...
MoneyMorning.com Peter Krauth writes: As Greece approaches its next payment deadline, the rhetoric and the stakes are boiling over.
The IMF recently quit negotiations in Brussels, saying it had reached a stalemate.
Then Greek Prime Minister Tsipras said the IMF had "criminal responsibility" for his country's debt crisis.
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Monday, June 22, 2015
Interest Rates Are Rising for All the Wrong Reasons / Interest-Rates / US Interest Rates
By: Michael_Pento
Wall Street carnival barkers are relishing in the fantasy that the economy has finally achieved escape velocity. Therefore, they accept with alacrity that this is the primary reason why interest rates have started to rise. However, the fact still remains for the first half of 2015 GDP growth will probably be less than 1%.
Saturday, June 20, 2015
The Final Phase Of The U.S. Treasury Bond Market Bubble / Interest-Rates / US Bonds
By: Austin_Galt
There has been quite a bit of chatter in recent times about the bond bubble bursting. So, have we seen the final high in bond prices or final low in interest rates? No, I don’t believe so but we are indeed approaching the final phase of this bond bubble.
Let’s try to nail down the end of this bull market in bond prices and bear market in bond yields or interest rates by analysing in detail the charts of the 30yr US T-Bond prices and yields. We’ll begin with the big picture yearly chart of bond prices.
Saturday, June 20, 2015
The Simplest Way to View the U.S. Bond Market / Interest-Rates / US Bonds
By: DailyWealth
Dr. David Eifrig writes: It has been a wild time for fixed-income investments over the last couple years...
Interest rates are historically low in the U.S. In Europe, rates have spent time in negative territory... meaning investors were willing to take a guaranteed loss.
It can be hard to get a handle on what's happening today in the bond market... never mind where things may be headed tomorrow.
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Friday, June 19, 2015
US. Bonds and Banks / Interest-Rates / US Bonds
By: Alasdair_Macleod
This year has seen some big losses develop in the bond markets, though prices have stabilised in recent days. The chart above is of the yield on the lowest investment risk in ten year maturities. Most other 10-year bonds have seen even sharper rises in yield (i.e. greater price falls). This matters because the banking system is heavily invested in sovereign bonds, not only in the short end of the market where it traditionally invests its liquidity, but also in longer maturities between five and ten years. Furthermore, central banks have become exposed to the same risk through their bond purchases with implications for currency stability, but that is a separate issue.
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Friday, June 19, 2015
Big Fat Greek Bank Run - Greece Banking System Could Collapse Monday 22nd June / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
It appears times up for the Greek Trojan Horse that has been parked outside of the European Central Bank for years, slowly but steadily bleeding the euro-zone dry of now in excess of Euro 360 billion (E240 billion bailout + E120 billion banking system support), as the euro-zone bureaucrats and politicians are finally starting to understand what many have understood for the past 5 years that Greece just cannot function within the Euro-zone, it should never have been allowed to join with bogus economic statistics and subsequently should not have been bailed out again and again and again.
Thursday, June 18, 2015
Bond Bubble - The Fed is Now Officially in VERY Serious Trouble / Interest-Rates / US Bonds
By: Graham_Summers
The market action of the last 24 hours can be summated as thus:
The Fed didn’t raise rates, so the US Dollar fell and all risk rallied hard.
The fact the Fed didn’t raise rates is not important. Interest rates have not been at zero for six years. And the last real period of tightening ended in 2006, nearly a full decade ago.
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Thursday, June 18, 2015
GREXIT - Greece Wants to Become Scotland, Seeks Permanent Subsidy from Euro Tax Payers / Interest-Rates / Eurozone Debt Crisis
By: Nadeem_Walayat
The Greece debt crisis is marching towards its end game of GREXIT, as the socialist Syriza government continues to up the anti every other day by threatening to blow a hole in the euro-zone through defaulting on overdue debt payments that now total Euro 1.6 billion, having already delayed payment of for several weeks through the use of the euro-zone rule book as Greece demands bailouts forever to permanently service Greece's debt AND finance government deficit spending.
Thursday, June 18, 2015
UK Jobs, BoE, Sterling and Yield Spreads / Interest-Rates / UK Interest Rates
By: Ashraf_Laidi
Today's UK jobs figures powered the pound across the board as average weekly earnings growth (excluding bonuses) shot up to a six-year high of 2.7% in the three months to April y/y, exceeding market expectations for a 2.1% rise. Substracting the 0.1% level of inflation, real earnings come in at 2.6%, also the highest since 2009. If wage gains persist on their upward trend, then wage cost inflation would follow, forcing the gilt market to price more aggressive expectations for a BoE rate hike.
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Wednesday, June 17, 2015
Geopolitics Will Trump Economics in Greece / Interest-Rates / Eurozone Debt Crisis
By: John_Browne
Based on the continued failure of the negotiating parties to make any substantive progress in the talks over Greek debt payments, the financial world is tied up in knots over a possible Greek exit from the European Union. The uncertainty has manifested in both high and low finance, with a sharp sell-off in bonds, particularly EU and Greek government debt, and heightened retail withdrawals from Greek banks as depositors become wary of capital controls that would be imposed in the case of an exit. All concerned parties should likely breathe easier. Despite Greece's almost complete lack of financial integrity, neither NATO nor the EU can afford the political cost of a Greek exit from the EU.
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Wednesday, June 17, 2015
Global Bond Market Crash Could Be “Ground Zero” for the Biggest Financial Crisis Ever / Interest-Rates / Bond Bubble
By: ...
MoneyMorning.com Shah Gilani writes: Let’s start with a surprising truth.
Though not many folks know this, the credit crisis-spawned stock market crash of 2007-’09 created a hefty number of millionaires
There’s a reason for this, and that reason sits inside the simple market maxim that every crisis is accompanied by big opportunities.
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Wednesday, June 17, 2015
Let’s Just Get This Greece Thing Over With / Interest-Rates / Eurozone Debt Crisis
By: John_Rubino
Guys, please. As much as we all love a good crisis, this is getting old. The threats, the name-calling, the apocalypse certain to occur if one side doesn’t immediately cave to the other’s unreasonable demands. Seems like your Greek tragedy has been going on forever, and like a long-running TV show that keeps pushing the big reveal into the next season, your audience is beginning to lose interest.
Or is that the goal? Exceed our attention span, send us off to more vibrant stories like Russia or ISIS or Caitlyn Jenner — and then, when no one is looking, hit us with something really crazy. By now, that possibility is all that’s keeping us tuned in.
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Wednesday, June 17, 2015
Stop the Fed!? / Interest-Rates / US Federal Reserve Bank
By: Axel_Merk
We are concerned the Fed causes both economic and political stability to deteriorate. And, no, this is not about discouraging the Fed to hike rates. This analysis is about pointing out that the road to hell may be paved with the best of intentions. For the economy to prosper, we need a re-thinking not just at the Fed, but also with some Fed critics. Let me elaborate...
Tuesday, June 16, 2015
Why the Fed Is Afraid To Raise Interest Rates / Interest-Rates / US Interest Rates
By: Michael_Pento
Even though the major stock market averages are flat for the first six months of the year, by nearly every measure the stock market is still extremely overvalued. This point is not lost on Ms. Yellen and company, as the Fed Chair herself has recently assented that the current value of stocks are "quite high". Given this, the Fed must privately be afraid that even a small change in the Fed Funds Rate could serve as the needle that pops the massive bubble in the stock market.
Monday, June 15, 2015
Monetary Quackery in Ireland / Interest-Rates / Credit Crisis 2015
By: Antonius_Aquinas
If Ireland is ever going to leave PIIGS status (the acronym for Europe’s most indebted and financially challenged economies – Portugal, Italy, Ireland, Greece, Spain), it must stop listening to, and then criminally prosecute the monetary authorities which have brought the country to financial ruin. It can start this most necessary process with the nation’s central bank governor, Patrick Honohan. Not only must Professor Honohan be hauled away, preferably in chains, but the sinister institution in which he heads, Ireland’s central bank, Banc Ceannais na hÉireann, must be eradicated.
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Monday, June 15, 2015
Bond Market Bombshell - Deflation Rules! / Interest-Rates / US Bonds
By: Clive_Maund
DEFLATION RULES! - because periodic recessions, necessary to rebalance the economy after periods of growth, cannot be put off forever by the short-term expedient of printing money. The result of such corrupt and evasive practices is that the deflationary forces build up to catastrophic and overwhelming proportions leading to economic collapse and depression. This is the point that we have arrived at now. Why can't governments keep the game going indefinitely by printing more and more money? - because the debt grows and grows until it becomes apparent even to dull-witted bond / Treasury holders that they are never going to get their money back, so they start selling and the selling snowballs into an avalanche, driving interest rates through the roof. Bond and stockmarkets crash and the economy sinks into a dangerously deep depression, all because governments stubbornly refused to do the right thing all along, and interfered with and obstructed normal market forces, culminating in their idiotic and ruinous QE, ZIRP and now even NIRP.
Saturday, June 13, 2015
What You Really Need to Know to Play Rising Rates and Win / Interest-Rates / US Interest Rates
By: ...
MoneyMorning.com Keith Fitz-Gerald writes: Millions of investors are understandably flummoxed by the prospect of rising rates, and with good reason – it’s something that they’ve never had to contend with because interest rates have been on a one way trip down since 1981 when they peaked above 15%.
Naturally, Wall Street’s hype machine is in full gear and the headlines are terrifying. For every one telling you this isn’t a big deal there are 10 telling you it’s the end of the financial universe as you know it.
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Saturday, June 13, 2015
The Future of Greece and Gold / Interest-Rates / Eurozone Debt Crisis
By: Arkadiusz_Sieron
What are the possible scenarios for Greece and what do they imply for the gold market? The base-case scenario is that a bailout deal will be reached in coming days since no one wants the Grexit. Without the agreement, Greece would lose access to its external funding (like current bailouts funds, Eurozone’s crisis fund, IMF’s support or ECB’s Emergency Liquidity Assistance), whilst creditors risk Greece’s default, financial contagion and the loss of the euro’s prestige. However, both sides took tough positions, since Syriza does not want to disappoint its voters and does not believe in austerity policy, especially during recession, while creditors believe that the Eurozone is immune to possible Grexit. It is true that Greece and its creditors can only play the game of chicken to negotiate the best agreement and save face before their respective voters, but at this point, any mistake in negotiations can trigger a new crisis in Europe and increased volatility on the forex market. Read full article... Read full article...
Thursday, June 11, 2015
Is The Age Of Negative Interest Rates Ending Already? / Interest-Rates / International Bond Market
By: John_Rubino
History teaches that long trends end only when everyone is finally convinced that they’ll keep going.
Maybe no trend in modern times has been as convincing as interest rates. The yield on long-term Treasury bonds, for instance, has been falling for as long as most people have been alive:
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Wednesday, June 10, 2015
How to Play the Bond Market Crash / Interest-Rates / International Bond Market
By: ...
MoneyMorning.com Shah Gilani writes: A week ago, in a strategy piece detailing ways to handle the looming bond-market crash, I recommended shorting the iShares PLC Markit iBoxx Euro High Yield Bond ETF (LON: IHYG).
Several readers wrote in to say that “not every brokerage lets you buy this.” Some do, in fact: In this day and age, many brokerages let you buy any shares, anywhere. But for those of you whose brokerages won’t let you, I wanted to give you an alternative.
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Monday, June 08, 2015
Get Ready for the Greatest Trade in History / Interest-Rates / International Bond Market
By: ...
MoneyMorning.com William Patalon writes: In Wall Street lore, it's known as the "Greatest Trade Ever."
It's also known as "The Big Short."
In 2006, John Paulson was a relatively unknown hedge-fund manager – just another face in the crowd.
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Saturday, June 06, 2015
Greece’s Current Debt Problems / Interest-Rates / Eurozone Debt Crisis
By: Arkadiusz_Sieron
Greece is again on the brink. Hellas stood on the edge for the first time in spring 2010. In May 2010 the European Union and International Monetary Fund approved the first bailout worth €110 billion, under the condition of austerity measures. The first rescue package missed its targets as lenders’ economic forecasts for Greece were too optimistic. Therefore, in February 2012 the Troika (the Eurogroup, the European Central Bank and the International Monetary Fund) finalized the second rescue package worth a €173 billion (including money left over from the first bailout) provided by the newly created European Financial Stability Facility. Read full article... Read full article...
Friday, June 05, 2015
US Jobs Report Gives Green Light for a Interest Rate Hike? / Interest-Rates / US Bonds
By: Anthony_Cherniawski
Good Morning!
TNX is back in the news this morning with a huge spike in yields. The monthly Jobs Report came out much better than expected. Never mind that the vast bulk of those jobs was fictitious, AKA the CES Birth/Death Model. This gives the Fed the green light to hike rates, er…to follow what the market is already doing with the rates. This is an awfully tight corner for the Fed to be in.
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Friday, June 05, 2015
The Ugly Truth Behind the Fed's Quantitative Easing / Interest-Rates / Quantitative Easing
By: ...
MoneyMorning.com Shah Gilani writes: The growing income and wealth gap between the rich and poor, most of whom used to be called middle class, has many fathers. But behind the scenes one primary cause emerges. It's the greatest financial disruptor of modern times: Quantitative Easing (QE).
While the jury's out on whether QE will eventually be the step-ladder that lifts us out of the lingering Great Recession, as its proponents argue, the facts demand that the verdict on QE's egregious enrichment of the rich and subjugation of everyone else is: "guilty."
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Friday, June 05, 2015
Bernanke is Still Bubble Blind / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
Even though the former Chairman of the Federal Reserve is now getting paid privately for his economic and market prognostications, he is still unable to identify or acknowledge the monumental bubbles that central banks have engineered. Mr. Bernanke, who was recently interviewed in Korea, tried to assure investors that rate hikes (whenever they begin) would be good news for the U.S. economy. He was also very "optimistic" there would not be a hard landing in China. And, not surprisingly, the man who is now gainfully employed at the Brookings Institution, Pimco and hedge fund Citadel, is also "encouraged" by Japanese Premier Shinzo Abe's growth strategy. This is despite the fact that the thrust of Abenomics has been to depreciate the value of the Yen by 35 percent in the past two and a half years.
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Thursday, June 04, 2015
Japan’s Easy-Money Experiment and the Future / Interest-Rates / Quantitative Easing
By: MISES
Brendan Brown writes: The International Monetary Fund (IMF), once the conductor of a global dollar exchange standard based partially on gold convertibility, has mutated into the official platform for the 2 percent inflation standard launched surreptitiously by the Greenspan Fed in July 1996. The Federal Open Market Committee (FOMC) then approved a position paper by Professor Yellen that price stability should mean 2 percent inflation forever. Europe joined the standard in 1998, and Japan became the newest member in January 2013.
Thursday, June 04, 2015
Global Bond Market Rout - Draghi Says 'Get Used to Higher Volatility' / Interest-Rates / International Bond Market
By: Mike_Shedlock
Bond Rout in Pictures
German 10-year bonds hit a yield low of .048% on April 16. Since then it's been a pretty steep uphill climb in yield (down in price).
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Tuesday, June 02, 2015
The Coming Bond Market Collapse: Make a Killing – While Everyone Else Gets Killed / Interest-Rates / US Bonds
By: ...
MoneyMorning.com Shah Gilani writes: We’re hurtling toward the biggest bond bubble the world has ever seen.
It’s going to start leaking.
Then it’s going to pop.
Today I’m going to tell you what to look for – because I’m all over this.
I’m also going to share four handpicked recommendations that will soar when the bond bubble bursts.
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Monday, June 01, 2015
Bikers, Bonds, and Black Swans / Interest-Rates / International Bond Market
By: DeviantInvestor
A “black swan” event occurred at a gathering of outlaw bikers on Sunday, May 17 in Waco, Texas. According to news stories a fight broke out between several motorcycle gangs at the Twin Peaks restaurant. At least nine bikers are dead, another 17 were injured, and perhaps as many as 170 were detained or jailed.
Monday, June 01, 2015
Bond Bubble Bust Won’t Cause Great Rotation / Interest-Rates / Global Debt Crisis 2015
By: Michael_Pento
For the first time in its country’s history, Portugal sold 6 month T-bills at a negative yield. The 300 million euros ($333 million) worth of bills due in November 2015 sold at an average yield of minus 0.002%. A negative yield means investors buying these securities will get back less money from the government than they paid when the debt matures.
To put this in perspective, the 10 year note in Portugal now yields just 2.38%, down from 18% a mere three years ago. Back in 2012, creditors grew wary of the countries referred to as PIIG’s (Portugal, Ireland, Italy and Greece) and their ability to pay back the massive amounts of outstanding debt. Consequently, creditors drove interest rates dramatically higher to reflect the added risk of potential defaults.
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Monday, June 01, 2015
Dangerous Debt Trend And What It Could Do to Your Wealth / Interest-Rates / Global Financial System
By: Investment_U
Andrew Snyder writes: It is a fascinating trend - something every investor must be aware of. It’s yet another reason interest rates are likely to stay lower for far longer than most folks ever expected.
If rates rise, after all, countless governments are in big trouble.
Everywhere we look, return-desperate investors are turning to the debt market and its virtually free money. It’s one thing when companies use borrowed money to buy their own shares. It’s a victimless crime.
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Monday, June 01, 2015
Monetary Reform in Iceland: Maybe There is Still Hope? / Interest-Rates / Credit Crisis 2015
By: Submissions
Antonius Aquinas writes: Despite the barrage of catastrophic financial data throughout the Western world, there may be a glimmer of hope coming from the tiny Nordic island of Iceland.
It must not be forgotten that it was Iceland which was one of the first to feel the fallout of the financial crisis of 2007-08. Unlike most of the other nations, however, Iceland showed tremendous backbone and did not allow, for the most part, any of the NWO monetary agencies to intervene in its affairs. So, any Icelandic currency reform considerations must be taken seriously.
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Thursday, May 28, 2015
U.S. Fed Exported QE Travesty: Meet The BLICS Nations / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
The aggravated global financial situation is working toward a series of powerful climax events. The various USDollar platforms are either undergoing seizure or suffering from abandonment by primary players. The grand Reich Finance application is failing finally, with extraordinary lies, propaganda, market rigging, doctored statistics, and $trillion patches leaking. The Western banking system is being lashed at another level, after the multi-lateral lashing with derivatives tied the big Western banks all together following the Lehman killjob in 2008. A new global lashing has begun to show itself, yet another obscenity. Witness the export of QE globally by the USFed via the unlimited vast Dollar Swap facilities (massive slush funds). The new 5 BLICS nations under Western thumb are being used to purchase huge tracts of USTreasury Bonds, surely using Dollar Swap funds, on behalf of the USFed master criminal organization. One is left to wonder what the sweetener was for the five nations, like perhaps shared narcotics funds, or a promise of hidden banking system relief. The self-dealing using nations to buy USTBonds with free money has come to the fore, in another desperate attempt to save the system. It cannot be saved. It is cratering. It is rotting from the inside. It is fracturing. It will fail. The fiat paper currency system and its many attendant systems are seizing up, being rejected, and are failing in what has begun to be the grandest financial event in modern history.
Thursday, May 28, 2015
The ECB and the Negative-Interest-Rate Game / Interest-Rates / ECB Interest Rates
By: Frank_Hollenbeck
The ECB is now two months into its bond buying binge but the European Central Bank (ECB) never clearly explained the goal and purpose of its own version of quantitative easing. The deflation bogeyman was never a serious threat, nor was it based on any solid theoretical foundation.
A possible justification may have been to make the 1 percent much wealthier so that their extravagant lifestyles trickled benefits down to the average working stiff. Another possible reason may have been to lower the value of the euro to benefit exporters at the expense of the rest of European consumers, the middle class, and the poor. This would be a violation of the unwritten rule that monetary policy should not be targeting the value of the currency directly.
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Thursday, May 28, 2015
We're Now Frighteningly Vulnerable to a Bond Market Crash / Interest-Rates / US Bonds
By: ...
MoneyMorning.com Shah Gilani writes: Water doesn’t flow uphill.
It’s a lesson in physics so basic that even schoolkids know it.
In fact, everyone knows it…
Everyone except – apparently – the world’s central bankers.
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Tuesday, May 26, 2015
U.S. Fed Considers a More Seasoned Approach / Interest-Rates / US Interest Rates
By: Peter_Schiff
Just as the steady torrent of awful economic data, which began in the First Quarter and continued well into April and May, had forced many market analysts to grudgingly concede that 2015 would not see the robust economic growth that most had expected, the statisticians arrived on the scene like a cavalry charge and routed the forces of pessimism with a wave of their spreadsheets.
Monday, May 25, 2015
Janet Yellen is Right: She Can't Predict the Future / Interest-Rates / US Interest Rates
By: Dr_Ron_Paul
This week I found myself in rare agreement with Janet Yellen when she admitted that her economic predictions are likely to be wrong. Sadly, Yellen did not follow up her admission by handing in her resignation and joining efforts to end the Fed. An honest examination of the Federal Reserve's record over the past seven years clearly shows that the American people would be better off without it.
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Sunday, May 24, 2015
Mario Draghi’s Slippery Downward Slope / Interest-Rates / ECB Interest Rates
By: Raul_I_Meijer
Mario Draghi made another huge faux pas Thursday, but it looks like the entire world press has become immune to them, because it happens all the time, because they don’t realize what it means, and because they have a message if not a mission to sell. But still, none of these things makes it alright. Nor does Draghi’s denying it was a faux pas to begin with.
And while that’s very worrisome, ‘the public’ appear to be as numbed and dumbed down to this as the media themselves are -largely due to ’cause and effect’, no doubt-. We saw an account of a North Korean defector yesterday lamenting that her country doesn’t have a functioning press, and we thought: get in line.
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Saturday, May 23, 2015
Are We in Another Credit Bubble? And Is It Different than Before? / Interest-Rates / US Debt
By: EWI
Part 1 of our FREE report on the recent build-up in credit includes a chart of U.S. corporate debt issuance since 1998 you don't want to miss
Whatever your politics, creed or nationality -- we can all agree that a huge catalyst for the 2008-9 global financial meltdown was the universal binge of bad credit.
A huge part of that bad-debt pile were the "don't-ask-don't-tell" high-yield bonds -- a.k.a. junk bonds -- which were used to fund a lot of things, including corporate takeovers.
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Saturday, May 23, 2015
Yellen Interest Rate Hike If Economy Improves....Really? / Interest-Rates / US Interest Rates
By: Jack_Steiman
I didn't know that already? Fed Yellen made sure she reminded us today of this reality. A bad economy means no rate hikes and a good means there will be. I'm glad I understand things better now. So if we get a bad GDP, possibly even a negative one next week, the market will love it? It just may work out that way. It almost seems as if the bulls can't lose. A good number means things are getting better so let's celebrate that with some upside action.
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Friday, May 22, 2015
Inaccurate Economic Statistics and The Threat to the Bond Market / Interest-Rates / US Bonds
By: Alasdair_Macleod
Statistics have become very misleading: in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher.
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Thursday, May 21, 2015
Illusions of Time and a Ship of Fools / Interest-Rates / UK Interest Rates
By: Tom_Naysburn
Election success has handed Mr Cameron and the Conservatives sole charge of the ship and the opportunity to fashion a new rudder with which he can chart a course through these shark invested waters.
It’s been said many times before that the only conversation ever worth having in politics or intellectual discourse is about “the money”, not because it in itself has any great value to society, but because we value everything we do in it. This is undoubtedly true yet so few want to talk about it, just look at the mainstream media who appear to feign the belief that the economics world is flat and the sun rises twice a day. Most of them maybe blissfully ignorant of their acquiescence but those who do stand on the bridge of the ship of fools in a grubby and tawdry garb.
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Wednesday, May 20, 2015
Will Interest Rates Ever Rise? / Interest-Rates / Global Financial System
By: BATR
Wrapped in a worldwide currency depression, the intentional zero interest rate strategy has fostered great damage to the practice of saving. Nevertheless, not everyone believes or blames central banksters for enacting a deliberate policy. Reporting on one such denier is UK columnist Jeremy Warner. He writes in the Telegraph article, When will interest rates rise? The way things are going, maybe never.
Monday, May 18, 2015
Interest Rates Spiking Everywhere / Interest-Rates / Global Financial System
By: John_Rubino
Just as ultra-low interest rates start to seem normal, the markets decide otherwise. US 10-year Treasury bonds yielded about 1.9% in April and are now above 2.20%:
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Monday, May 18, 2015
Global Bond Bubble Will Explode Violently / Interest-Rates / International Bond Market
By: Michael_Pento
Central banks are incapable of saving economies or creating growth. The only thing a central bank can do is create inflation. These market manipulators set forth on a journey seven years ago to save the world by engaging in massive monetary manipulation, euphemistically called Quantitative Easing (QE), and a Zero interest rate policy known as (ZIRP).
As I could have told them before they started, all this easy money will fail to create viable growth. The economy, held back by massive debt levels, initially clocked in at 0.2% for the first quarter. This number is set to be revised down to negative territory due to a huge increase in the trade deficit during March. And the second half isn’t setting up to be much better either.
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Monday, May 18, 2015
Bond Market Chaos Is Spinning Out of Control / Interest-Rates / US Bonds
By: ...
MoneyMorning.com Michael Lewitt writes: A few weeks ago, the man formerly known as the Bond King, Bill Gross, tweeted that shorting German bunds would be the trade of the century.
I was gratified to see that he was reading my mind, as readers of my Credit Strategist newsletter already know.
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Sunday, May 17, 2015
Velocity of Money - The Chart the Fed Doesn’t Want You to See / Interest-Rates / US Interest Rates
By: Investment_U
Andrew Snyder writes: The folks at the Fed are getting desperate. Their patient is slowly healing, but he refuses to do it without a big dose of painkillers. It’s clear that if the money manipulators hide their pills now, our addict will throw an economic fit none of us is eager to experience.
On Wednesday, markets were shaken when the world’s top pill pusher Fed Chief Janet Yellen boldly told us that stocks are overpriced. It was a half-cocked assertion that Alex Green quickly overcame (read his argument here).
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Friday, May 15, 2015
Double Black Diamond - What a Bond Bear Market Looks Like / Interest-Rates / US Bonds
By: John_Mauldin
I was a halfway decent skier when I was a kid. Good enough that I could navigate every trail on the mountain except for one or two. Good enough that I could do the double black diamonds.
My grandfather built a cabin on the access road to Sugarbush, Vermont, in the ‘80s and sold it in the ‘90s. Makes me weep when I think what that thing would be worth now. I wasn’t kidding when I said I come from a financially unsophisticated family.
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Wednesday, May 13, 2015
Debt Bomb - Big Volatility Shakes Bond Market Investors / Interest-Rates / US Bonds
By: EWI
Is the debt bomb about to go off?
Editor's note: You'll find the text version of the story below the video.
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Tuesday, May 12, 2015
U.S. Bond Bear Market Still Underway? / Interest-Rates / US Bonds
By: Tony_Caldaro
The has been lots of talk lately of a Bond market top. This type of talk has actually been going on, and off, for a few years. To our surprise we find we have not written a Bond specific report in nearly three years: https://caldaro.wordpress.com/2012/07/02/bonds-and-long-term-rates/. In that report we detailed why we expected Bond yields to be bottoming in 2012. The 10YR did make a new yield low that year at 1.39%, and it has remained above that low ever since – currently 2.27%. The 30YR also made a new low yield that year at 2.45%. It then rose to 3.98% in 2014, but renewed its decline into a lower low at 2.23% in February of this year – currently 3.04%.
Saturday, May 09, 2015
Credit Insanity: The Biggest Debt Bomb in History and the Fuse is Lit / Interest-Rates / Credit Crisis 2015
By: EWI
Dear investor,
Exclusive invitation: Our friends at Elliott Wave International have just released a new subscriber-level summary report, Credit Insanity: The Biggest Debt Bomb in History and the Fuse is Lit, for their paying subscribers. Once I read it, I asked EWI if I could share it with you, too, and they graciously agreed, but asked that I don't make too big of a deal about it, because it was intended for subscribers only.
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Thursday, May 07, 2015
Global Bond Markets in Perspective / Interest-Rates / International Bond Market
By: Gary_Tanashian
The world is getting hyped up about bond yields lately with bonds of all stripes declining, as if we are in the midst of a debt Armageddon (we are and have been in the midst of a decades-long and still intact 'debt for growth' Ponzi operation). Here is some perspective...
Thursday, May 07, 2015
U.S. Fed Embarrassment of Transparency / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
Over the past decade or so, "transparency" has become one of the buzzwords that has guided the Federal Reserve's culture. The word was meant to convey the belief that central banking was best done for all to see in the full light of day, not in the murky back rooms of Washington and New York. The Fed seems to be on a mission to prove that its operations are benevolent, fair, predictable, and equitable. Part of that transparency movement took shape in 2007 when the Fed began publicizing its Gross Domestic Product (GDP) forecasts, which previously (to the frustration of investors) had been kept under wraps. Most of the Fed's policy moves are tied to how strong, or how weak, it believes the economy will be in the coming year. As a result, its GDP forecast is perhaps the single most important estimate it make.
Tuesday, May 05, 2015
TLT Breaks a Head & Shoulders Neckline / Interest-Rates / US Bonds
By: Anthony_Cherniawski
TLT just crossed the neckline of its Head & Shoulders formation, suggesting a very steep decline to 107.76.Read full article... Read full article...
Tuesday, May 05, 2015
The U.S. Fed Needs Your Help / Interest-Rates / US Federal Reserve Bank
By: Harry_Dent
Rodney Johnson writes: The Fed needs your help. This stately body of academics has worked for years to rejuvenate the U.S. economy, but to no avail.
You can’t say they’ve been lazy in their efforts. When their first quantitative easing (QE) program failed to create a bounce back in housing, they started up another one, QE2. When that failed they brought in QELite, followed by Operation Twist.
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Tuesday, May 05, 2015
The Collapse of Cash / Interest-Rates / Global Financial System
By: Michael_Pento
Despite all of the central bank manipulations over the past seven years, it is finally becoming clear economies will not be able to achieve escape velocity. The U.S. central bank has the longest track record of treading down the path of monetary manipulations. And has achieved anemic average annual growth of 2.2% since 2010. Therefore, to further demonstrate the failure of money printing to engender economic growth, the dismal Q1 GDP read of just 0.2 % displays the failure of this policy once again. Wall Street Shills have been quick to once again blame snow in the winter for the Q1 miss. However, it is becoming evident that Q2 will not produce any such anticipated rebound.
Monday, May 04, 2015
U.S. Long Bond, an Historic Trading Opportunity? / Interest-Rates / US Bonds
By: Dan_Norcini
This past week saw a huge swing in interest rates at the long end of the curve with the long bond in particular getting knocked for a loop.
Saturday, May 02, 2015
Everyone Piles Into Junk Bonds - The End Is Near? / Interest-Rates / International Bond Market
By: John_Rubino
Six years into a recovery, stocks at record levels, high-end real estate in the stratosphere and debt levels soaring in virtually every public and private sector. Time to scale back and protect those gains, right? Wrong, apparently, for a depressingly obvious reason: Huge sections of the investing public can’t afford to move into cash or even into conservative paper like short-term Treasuries.
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Thursday, April 30, 2015
Bill Gross on Pimco Hiring Bernanke and Fed Interest Rate Hike 2015 / Interest-Rates / US Interest Rates
By: Bloomberg
Bill Gross of Janus Capital spoke with Bloomberg Television's Erik Schatzker about today's Federal Open Market Committee statement and the outlook for Federal Reserve policy, global bond markets and Pacific Investment Management Co.'s move to hire former Fed Chairman Ben S. Bernanke as an adviser.
On Pimco hiring Bernanke, Gross said: "Obviously it's a public relations effort….To be able to hook up with Ben Bernanke, I think it is. And that was one of the reasons why we did it with Alan Greenspan [when I was at Pimco], but we found out that there were some very positive benefits to it as well."
Tuesday, April 28, 2015
Thoughts from the Frontline: The Third and Final Transformation of Monetary Policy / Interest-Rates / US Federal Reserve Bank
By: John_Mauldin
The law of unintended consequences is becoming ever more prominent in the economic sphere, as the world becomes exponentially more complex with every passing year. Just as a network grows in complexity and value as the number of connections in that network grows, the global economy becomes more complex, interesting, and hard to manage as the number of individuals, businesses, governmental bodies, and other institutions swells, all of them interconnected by contracts and security instruments, as well as by financial and information flows.
Tuesday, April 28, 2015
Rush Hour! A Bond Market Traffic Jam / Interest-Rates / US Bonds
By: Harry_Dent
Rodney Johnson writes:
In the early 1990s I was a young bond trader with a Wall Street firm.
The business was not exactly like the movies, but it wasn’t too far off, either. We got to work by 7:00 a.m., set the strategy for the day — “Are we buying more or selling more?” — and then got on the phones.
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Saturday, April 25, 2015
Negative Interest Rates Financial Black Hole / Interest-Rates / International Bond Market
By: GoldSilverWorlds
It feels like not a single soul is worried about the increasing amount of negative interest rates. Ignorance or indifference? This could become a very expensive ordeal.
A black swan event is a metaphor for an enormous problem that develops underneath the surface and then suddenly puts the whole financial system at risk. The financial crisis of 2008 was a black swan event, for example, that slowly developed in the US real estate market where excess had ruled in the years before.
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Wednesday, April 22, 2015
Bill Gross - German 10-Year Bunds Short of a Life Time / Interest-Rates / Germany
By: Bloomberg
Bill Gross of Janus Capital spoke with Bloomberg Television's Alix Steel about yields on the 10-year German bund, his bet against German debt and the European Central Bank's program of quantitative easing.
On shorting the bund, Gross said: "Most investors would probably want to wait for 12 to 18 months because that's when the Eurozone and the ECB's quantitative easing program ends. And one of the reasons for the overvaluation of bunds has to do with Mario Draghi and his program of EUR60 billion a month in terms of buying power. And so you don't want to fight the Fed or the ECB, I suppose, and then getting in early is doing that to a certain extent."
Friday, April 17, 2015
The Consequences of The Fed's Interest Rate Hike / Interest-Rates / US Interest Rates
By: Arkadiusz_Sieron
Although sometimes we doubt whether the Fed is going to increase interest rates soon, it is worth analyzing the consequences of such a game-changing move. The hike would be the first in nearly a decade. Theoretical effects of rising interest rates are well-known: higher interest rates mean higher borrowing costs (something to consider: if you have a variable rate mortgage and believe that Fed will eventually hike interest rates, think about locking in at current low rates with a fixed-rate mortgage), lower asset prices, reduced risk-premium and a stronger greenback. All of these are relatively bad for the stock market. Higher discount rates mean lower stock prices, while reduced risk-premium makes equities less attractive compared to new issues of bonds. Higher borrowing costs hurt indebted companies, while a stronger greenback negatively affects the exporters and international businesses, which are a significant part of the U.S. stock market. This is why the equity indices were generally falling in March in anticipation of the Fed's hike and surged after the publication of the dovish FOMC statement.
Wednesday, April 15, 2015
Boom Zero Interest Rates / Interest-Rates / US Interest Rates
By: Gary_Tanashian
There is so much data flying around out there. From the Credit data we reviewed yesterday to weakening manufacturing and exports to employment up nicely one month and down big the next, to frisky consumers (the economy’s ‘back end’, putting it nicely) out there confidently living it up.
Wednesday, April 08, 2015
Cost of Negative Bank Interest Rates / Interest-Rates / Credit Crisis 2015
By: BATR
So you thought that the unimaginable could not happen. The signal is heard loud and clear. Keeping your money in a fiduciary account will not only earn no interest; there will be an actual cost of parking your funds in a bank relationship. The madness that has engulfed the financial sector is preparing to escalate the systematic looting of saved capital. Ponder the consequences of negative bank rates and ask, what exactly can anyone do or where can they place their money for safekeeping. The first objective of entrusting your funds to a financial institution is to have the ability to obtain access to the return of your capital.
Tuesday, April 07, 2015
U.S. Interest Rates - How the Federal Reserve Has Completely Fooled Us for Years / Interest-Rates / US Interest Rates
By: DailyWealth
Dr. Steve Sjuggerud writes: We must be idiots...
The Federal Reserve has completely fooled us for more than six years...
"Higher interest rates are just around the corner," they tell us today.
The thing is, they've told us that over and over – since the Fed first cut interest rates to zero back in 2008.
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Monday, April 06, 2015
3 Sigma Extremes In the U.S. Treasury Bond Market / Interest-Rates / US Bonds
By: DeviantInvestor
US T-Bond futures closed Friday, March 27 up nearly 12% from the February close. That was the 3rd largest monthly percent move since 1977 when my data begins and created a 3.61 standard deviation change. This is a huge move. What does it mean?
The US T-Bond market peaked on March 25 at an all-time high over 165, up from about 75 in 1990. Bonds move inversely with yields, so yields have dropped to their lowest level ever. This is not surprising because central banks have been monetizing sovereign debt, buying bonds, and supporting the bond and stock markets. Several $Trillion in European sovereign debt currently “pays” negative interest – an extreme condition. The Bank of Japan has aggressively purchased Japanese government bonds as well as Japanese stocks – another extreme example of a bond bubble.
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Wednesday, April 01, 2015
Did The Fed Just Admit to Deep Uncertainty About Our Financial Security In Retirement? / Interest-Rates / Pensions & Retirement
By: Dan_Amerman
Generally speaking, the chairperson of the Federal Reserve is treated by the mainstream financial media as being the very paragon of respectability. If the Fed says it - then the voice of economic authority has spoken, and we need to listen carefully.
Yet, recent comments by Janet Yellen have instead made her a source of "controversial" economic ideas, with some financial reporters and their editors apparently feeling a duty to protect their reading audience - and let them know this is not acceptable economic thinking, but rather is "far outside the mainstream."
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Wednesday, April 01, 2015
Iceland Ponders Radical Banking Plan to Eliminate Fractional Reserve Lending / Interest-Rates / Global Financial System
By: Mike_Shedlock
I have long railed against fractional reserve lending, duration mismatches (e.g. banks issuing 2-year CDs and lending money for 15-year mortgages), bank's ability to lend money into existence, and deposit insurance.
Fractional reserve lending allows banks to lend out a near infinite amount of credit with essentially no backing. Money inevitable creates asset bubbles, but as long as the bubbles are expanding it appears the system is solvent.
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Wednesday, April 01, 2015
Bernanke Double Tap / Interest-Rates / US Federal Reserve Bank
By: Brady_Willett
The promotion of 'risk taking' during Bernanke's tenure was, without question, done at the immediate expense of traditional 'savings'. Deal with it Bernanke.
Former Fed Chairman, Ben Bernanke, began his new 'blog' yesterday with a dandy entitled 'Why Are Interest Rates So Low?' Given that only those with a financial acumen would read a blog from Bernanke, the silliness offered was remarkable. Nevertheless, here goes:
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Tuesday, March 31, 2015
No Body Understands Debt - Living in a Free-Lunch World / Interest-Rates / Global Debt Crisis 2015
By: John_Mauldin
“Everyone is a prisoner of his own experiences. No one can eliminate prejudices – just recognize them.”
– Edward R. Murrow, US broadcast journalist & newscaster (1908 – 1965), television broadcast, December 31, 1955
“High debt levels, whether in the public or private sector, have historically placed a drag on growth and raised the risk of financial crises that spark deep economic recessions.”
– The McKinsey Institute, “Debt and (not much) Deleveraging”
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Tuesday, March 31, 2015
Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Ben Bernanke just started his own blog at the Brookings Institute. His first post, from today, Inaugurating a New Blog is the announcement.
Let's dive into Bernanke's second post of the day: Why are Interest Rates So Low?
Bernanke: Low interest rates are not a short-term aberration, but part of a long-term trend. As the figure below shows, ten-year government bond yields in the United States were relatively low in the 1960s, rose to a peak above 15 percent in 1981, and have been declining ever since. That pattern is partly explained by the rise and fall of inflation, also shown in the figure.
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Monday, March 30, 2015
No FED Bets From the BIS / Interest-Rates / Central Banks
By: Dr_Jeff_Lewis
It is becoming harder and harder to ignore the fact that central banking policy isn’t exactly working out for the real economy. More wealth has been funneled toward an increasingly small and concentrated pool of unproductive paper wealth. But low and behold, it looks like the political-monetary landscape is being groomed in preparation for the next leg of this ongoing train wreck. Now the Bank for International Settlement (BIS), the central bank bank of central banks, is throwing the Fed under the bus.
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Friday, March 27, 2015
Central Banks Paralysed / Interest-Rates / Central Banks
By: Alasdair_Macleod
Though the Fed would deny it, it is clear from the minutes of the last Federal Open Market Committee (FOMC) meeting that a rise in interest rates has been put off indefinitely. The subsequent rally in the price of gold and the sudden fall in the dollar tend to confirm this conclusion.
The Fed Funds Rate, which is the interest rate the Fed targets to set all other rates, has now been less than 0.25% for six and a quarter years, gradually declining from roughly 0.15% to about 0.10% today. It was set at a target range of between zero and 0.25% in December 2008.
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Friday, March 27, 2015
Atlanta Fed President's Dilemma / Interest-Rates / US Federal Reserve Bank
By: Dan_Norcini
'tis the week to hear from the various Fed governors once again.
Today it is Atlanta Fed president Dennis Lockhart.
I am finding his comments rather unsettling after reading one part of them.
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Thursday, March 26, 2015
The Monetary Approach Reigns Supreme / Interest-Rates / Money Supply
By: Steve_H_Hanke
We are still in the grip of the Great Recession. Economic growth remains anemic and below its trend rate in most parts of the world. And what’s more, this state of subdued economic activity has been with us for over seven years.In the U.S. (and elsewhere) the central bank created a classic aggregate demand bubble that became visible in 2004. The Fed’s actions also facilitated the creation of many market-specific bubbles in the housing, equity, and commodity markets. These bubbles all dramatically burst, with the bankruptcy of Lehman Brothers in September 2008.
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Tuesday, March 24, 2015
Janet Yellen Give'em the Old Razzle Dazzle / Interest-Rates / US Federal Reserve Bank
By: Peter_Schiff
Janet Yellen channels Billy Flynn? Last week the Fed Chairwoman treated us to a master class of rhetorical misdirection which produced some memorable examples of doublespeak, including the soon to be classic "Just because we removed the word 'patient' does not mean we're going to be 'impatient."' But perhaps more surprising than her new heights of verbal dexterity was the market's euphoria at being so blatantly manipulated. Never has the financial world enjoyed a lie so thoroughly.
Monday, March 23, 2015
The Negative Interest Rates in Europe / Interest-Rates / ECB Interest Rates
By: Arkadiusz_Sieron
We wrote in one of our daily articles that Sweden had cut its main interest rate into negative territory (-0.10 percent). That way the Riksbank followed other European central banks. Currently, except Sweden, the negative interest rates are set by the Central Bank of Denmark, the European Central Bank and the Swiss National Bank. What does such a historically unusual monetary policy mean for the financial markets?
Monday, March 23, 2015
Yellen Runs Out Of Patience, But Not Excuses / Interest-Rates / US Federal Reserve Bank
By: Michael_Pento
The Fed removed the word Patience from its statement made following the FOMC meeting that concluded on Wednesday. But, taking out that one word proved to be mostly irrelevant. The removal of the patient language was more than offset by the Fed's lowering of its GDP growth estimates and its projection for when and how high it will raise rates based on its previously incorrect assessments of inflation and growth. Ms. Yellen said in the FOMC press conference that removing "Patient" did not mean she would become impatient with raising rates. It is clear that the dollar's strength and the cascading economic data reported since the start of 2015 caused the Fed to push out its timing for its first rate hike and the overall level for which it will finally reach equilibrium.
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Sunday, March 22, 2015
The "Natural Interest Rate" Is Always Positive and Cannot Be Negative / Interest-Rates / Economic Theory
By: Thorsten_Polleit
Some economists have been arguing that the “equilibrium real interest rate” (that is the “natural interest rate” or the “originary interest rate”) has become negative, as a “secular stagnation” has allegedly caused a “savings glut.”1
The idea is that savings exceed investment, and that a negative real interest rate is required for bringing savings in line with investment. From the viewpoint of the Austrian school, the notion of a “negative equilibrium real interest rate” doesn’t make sense at all.2
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Saturday, March 21, 2015
Yield Curve, Futures, Suggest No U.S. Interest Rate Hike Until December / Interest-Rates / US Interest Rates
By: Mike_Shedlock
Curve Watcher's Anonymous is investigating the yield curve following Janet Yellen's exceptionally dovish FOMC announcement on Wednesday.
Friday, March 20, 2015
Yellen's Tiger Riding Dilemma Keeps Interest Rates Near Zero / Interest-Rates / US Interest Rates
By: Dan_Amerman
Riding a tiger is one thing. But getting off the tiger, without that tiger then whirling around and consuming you – now that is another thing altogether.
A short non-econospeak translation of the results of the March 17-18 Federal Reserve meeting is that Fed chairwoman Janet Yellen still maintains that she is getting off that tiger – someday – but not at this moment because she doesn't know how to keep the US economy and markets from being eaten in the process.
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Friday, March 20, 2015
Janet Yellen Needs a Lesson in Culture / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Shah Gilani writes: The interesting news coming out of Federal Reserve Chairwoman Janet Yellen’s Q&A yesterday was her response to a question about bad bank “culture.”
Apparently, it’s not the Fed’s concern.
Yellen said, “While changing the culture of organizations is not something that we can achieve through supervision, we will make sure that the banks that we supervise have appropriate compliance regimes in place.”
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Thursday, March 19, 2015
There Will Be No U.S. Interest Rate Hike in June / Interest-Rates / US Interest Rates
By: Casey_Research
Jared Dillian writes: You might have heard that the FOMC removed the word “patient” from its directive yesterday, in that it would no longer be “patient” in waiting to remove monetary policy accommodation.
Lots of people were betting—have been betting for weeks—that this would be the meeting where Janet Yellen would lay out the path for a rate hike in June. The dollar has gone straight up against just about every G10 currency.
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Tuesday, March 17, 2015
ECB's QE / Interest-Rates / Quantitative Easing
By: Arkadiusz_Sieron
Just one week after the surprising Swiss decoupling from the euro peg, the ECB unleashed its quantitative easing program. On January 22, the President of the ECB, Mario Draghi, announced a €1.1 trillion monetary injection plan, which would start in March 2015 and last until the end of September 2016, or "until we see a sustained adjustment in the path of inflation". What does this €60bn monthly bond-buying program imply for the economy and gold market?
Tuesday, March 17, 2015
The Fed Will Likely Remove 'Patient' from its Statement, But Not from its Actions / Interest-Rates / US Federal Reserve Bank
By: Ashraf_Laidi
Although oil prices rallied more than 20% following the January Fed decision, their swift decline to fresh six-year lows raises questions about whether the Fed will underestimate threat of deflation as it did with GDP growth over the last three years. A June rate hike would be a policy mistake, especially as the US dollar index is heading for its biggest quarterly gain since Q4 1992. Adding Q3 & Q4, the USD index is up 23%. And yields remain muted as bond traders do not buy into a summer rate hike.
Tuesday, March 17, 2015
Government Bonds - The Most Crowded Trades on Wall Street / Interest-Rates / International Bond Market
By: EconMatters
The most crowded trade on Wall Street, the globe, or a beach in Brazil is the Bond Yield Chasing/Price Appreciation trade. This sector or asset class is an absolute bubble, the magnitude of which has never been seen in a mainstream asset class, and one that is deemed conservative and safe by investors which makes the tail risk for these assets off the charts. We literally are looking at an 8 sigma event down the road in this asset class.
Monday, March 16, 2015
Beware of The Inverted Yield Curve! / Interest-Rates / US Interest Rates
By: Michael_Pento
In the movies, an edgy musical score is an effective tool that warns the audience something really bad is about to happen. Like the shrill screech in Psycho, certain sound effects forebode impending doom. In like manner, economics also has a similar warning sign of imminent market chaos. This omen is called the inverted yield curve. And it's no coincidence that the last seven recessions have been preceded by this ominous predictor of economic and stock market disaster.
Monday, March 16, 2015
The ECB Should End QE Next Month / Interest-Rates / Quantitative Easing
By: EconMatters
Mario Draghi backed into Unenviable Corner
This was an instance where the markets pushed Mario Draghi in a direction that really wasn`t necessary, an area he knew deep down was fruitless, and in the end will be proven to be a complete waste of time, forestalling the inevitable structural changes required for Europe to grow in a competitive fashion over the next decade.
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Friday, March 13, 2015
Rising Interest Rates are a “wild card.” Here’s how to play it… / Interest-Rates / US Interest Rates
By: Money_Morning
Keith Fitz-Gerald writes: This week's trading featured a three-day losing streak for U.S. markets on fears that the Fed may hike interest rates earlier than expected, with the Dow, S&P 500, and Nasdaq shedding around 1.24%, 1.50%, and 1.57% respectively.
Bring it on!
I've pointed out repeatedly since the financial crisis began that the "good is bad" meme followed by traders – which triggers market dips with every piece of significant good news, thanks to paranoia that the Fed will seize on that news to raise rates – only creates buying opportunities for investors with the right tactics.
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Friday, March 13, 2015
Watch As All the Bond Market Rats Jump Ship before FOMC Meeting / Interest-Rates / US Bonds
By: EconMatters
Short-Term Market Flipping
Markets are just hilarious these days, there is no meaningful investments in the era of High Frequency Trading, Spoofing Algos, Pump & Dump IPO Schemes and ZIRP free money to borrow at the drop of a hat.
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Friday, March 13, 2015
The Crazy Man's Guide to the U.S.Bond Market / Interest-Rates / US Bonds
By: John_Mauldin
I invite you to inspect the following chart of 10-year interest rates in the US.
If you don’t have a lot of experience with these things, let me clue you in: This is a very scary-looking chart. It’s a classic head-and-shoulders bottom in yields.
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Thursday, March 12, 2015
Sub-Zero Interest Rates as an Endless Daylight Saving Time / Interest-Rates / Economic Theory
By: MISES
Brendan Brown writes: We all know about Milton Friedman’s money helicopter idiom and how President Obama’s architect in chief of Quantitative Easing used it to justify his “Great Monetary Experiment.” Less well known is Friedman’s idiom about daylight saving time, how he used this to illustrate the case for flexible exchange rates, and how it is now apparently justifying the plunge of money market rates in Europe to sub-zero levels.
Wednesday, March 11, 2015
Six Days Until U.S. Bond Market Crash Begins / Interest-Rates / US Bonds
By: EconMatters
Run for the Exits
Early on Tuesday morning, realizing this was going to be a robust selloff in equities, the ‘smart money’, i.e., the big banks, investments banks, hedge funds and the like, ran to the old staple of buying bonds hand over fist with little regard for the yield they are getting paid for stepping in front of the freight train of rate rises coming down the tracks.
Tuesday, March 10, 2015
A Patient Fed Considers Losing Patience / Interest-Rates / US Interest Rates
By: Peter_Schiff
The below is an abridged version of a longer article that appears in the Winter 2015 Euro Pacific Global Investor Newsletter
I have always argued that quantitative easing and zero percent interest rates were misguided policies to combat economic weakness. But as the years went on, misguided turned into irresponsible, which led to ridiculous, and then turned into dangerous. But lately, the only word that comes to mind is "surreal." How should we react when central bankers begin to speak like Willie Wonka?
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Monday, March 09, 2015
U.S. 30 Year US T-Bonds Price Forecast / Interest-Rates / US Bonds
By: Austin_Galt
There has been quite a bit of chatter recently about interest rates in the US with many proclaiming interest rates are now headed up. Are these voices right? Having just analysed the technicals of the 30 Year US Treasury Bonds, it is my considered opinion that they are both right and wrong.
Keeping in mind that interest rates go up as bond prices go down, let’s investigate the price charts and we’ll mix it up by starting with the monthly chart first.
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Friday, March 06, 2015
U.S. Corporate Bond Market Building Stress / Interest-Rates / Corporate Bonds
By: EWI
Editor's note: This article is excerpted from "The State of the Global Markets 2015 Edition," a comprehensive report by Elliott Wave International, the world's largest independent market-forecasting firm. For a limited time, you can download the full report, for free, and use its year-in-preview insights to prepare, survive and prosper through the global investment landscape of 2015 and beyond. Download the full, 53-page report here -- it's free.
Tuesday, March 03, 2015
Bill Gross Says Fed May Raise Rates 25 Basis Points in June / Interest-Rates / US Interest Rates
By: Bloomberg
Bill Gross of Janus Capital spoke with Bloomberg Television's Trish Regan about the outlook for Federal Reserve policy, the U.S. economy and his objectives at Janus Capital.
On what he aims to do at Janus, Gross said: "I wanted to show clients and to show the world, to the extent that they're interested, that I can continue to produce a track record like I did at PIMCO. I won't have five to 10 to 15 years of leeway like I had at PIMCO in terms of proving that. But certainly for the next two, three or four years. I'm a very competitive person and I like to post numbers that are better than the market and better than the competition."
Sunday, March 01, 2015
Subprime Rising - U.S. Debt Breaking Bad Part 2 / Interest-Rates / US Debt
By: James_Quinn
‘If you’re committed enough, you can make any story work. I once told a woman I was Kevin Costner, and it worked because I believed it’ – Saul Goodman – Breaking Bad
“As calamitous as the sub-prime blowup seems, it is only the beginning. The credit bubble spawned abuses throughout the system. Sub-prime lending just happened to be the most egregious of the lot, and thus the first to have the cockroaches scurrying out in plain view. The housing market will collapse. New-home construction will collapse. Consumer pocketbooks will be pinched. The consumer spending binge will be over. The U.S. economy will enter a recession.” – Eric Sprott – 2007
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Saturday, February 28, 2015
U.S. Debt Breaking Bad / Interest-Rates / US Debt
By: James_Quinn
“At this juncture, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.” – Fed chairman, Ben Bernanke, Congressional testimony, March, 2007
“Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.” – James Grant, Grant’s Interest Rate Observer
The Federal Reserve issued their fourth quarter Report on Household Debt and Credit last week to the sounds of silence in the mainstream media. There were minor press releases issued by the “professional” financial journalists regurgitating the Federal Reserve’s storyline. Actual analysis, connecting the dots, describing how the massive issuance of student loan and auto loan debt has produced a fake economic recovery, and how the accelerating default rates in auto loans and student loans will produce the next subprime debt implosion, were nowhere to be seen on CNBC, Bloomberg, the WSJ, or any other status quo propaganda media outlet. Their job is not to analyze or seek truth. Their job is to keep their government patrons and Wall Street advertisers happy, while keeping the masses sedated, misinformed, and pliable.
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Saturday, February 28, 2015
Fed Raising U.S. Interest Rates - Shovelin’ Schmitt Against the Tide / Interest-Rates / US Interest Rates
By: John_Mauldin
There is an obsession in the marketplace over the date when the Fed will once again begin to raise rates. As if another 25 basis points is going to change the economics on tens of trillions of dollars of investments. But as we reflect on the issue more deeply, it becomes obvious that a minor bump in the fed funds rate will indeed change a great deal of economics all over the world.
No, it won’t do much to the cap rate on your latest real estate purchase, but it is likely to greatly affect the pricing of the currency and commodity markets. And those markets will affect corporate profits, which will affect the stock market. It’s all connected.
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Wednesday, February 25, 2015
Debt Be Not Proud / Interest-Rates / Global Debt Crisis 2015
By: John_Mauldin
Some things never change. Here is Eugen von Böhm-Bawerk, one of the founding intellectuals of the Austrian school of economics, writing in January 1914, lambasting politicians for their complicity in the corruption of monetary policy:
We have seen innumerable variations of the vexing game of trying to generate political contentment through material concessions. If formerly the Parliaments were the guardians of thrift, they are today far more like its sworn enemies. Nowadays the political and nationalist parties ... are in the habit of cultivating a greed of all kinds of benefits for their co-nationals or constituencies that they regard as a veritable duty, and should the political situation be correspondingly favorable, that is to say correspondingly unfavorable for the Government, then political pressure will produce what is wanted. Often enough, though, because of the carefully calculated rivalry and jealousy between parties, what has been granted to one has also to be conceded to others — from a single costly concession springs a whole bundle of costly concessions. [emphasis mine]
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Wednesday, February 25, 2015
Lowest Interest Rates For 3000 Years! / Interest-Rates / Global Financial System
By: John_Rubino
Business Insider's Myles Udland just posted a chart, drawn from research by the Bank of England, showing interest rates for the past 3,000 years. And for all those who've been feeling like today's "new normal" is actually profoundly abnormal, here's your proof. It turns out that interest rates, both long and short-term, are lower than they've ever been. Not lower than in this cycle, or post-war or in the past century, but ever, going back to the earliest days of markets.
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Monday, February 23, 2015
If Debt Was The Problem... / Interest-Rates / Global Debt Crisis 2015
By: John_Rubino
Confounded Interest just posted a nice summary of a McKinsey report on the growth of global debt during what some persist in calling the "great deleveraging." Turns out that since the crisis of 2008, debt has actually risen by $57 trillion, and the ratio of debt to GDP is up 17 percentage points to 286%. Meanwhile, central banks are monetizing 100% of newly-issued sovereign debt.
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Thursday, February 19, 2015
Sovereign Debt Monetization Parade - The Debt Heaven Fallacy / Interest-Rates / Global Debt Crisis 2015
By: Jim_Willie_CB
Today marks the Chinese New Year, the day promised for unleashing forces from the East which complete the Global Paradigm Shift. Let it rain; let it pour. For a full generation, the Western central bankers have relied upon debt to solve debt saturation problems as well as economic slowdowns founded within the credit cycle. In the last four years, they have added reliance upon free cost printed money to solve debt saturation and insolvency problems. The USTreasury Bond market has vanished for all practical legitimate purposes, a harbinger of the USDollar death event. With no surprise to the Jackass, the entire Western financial and economic system is not just decaying, but failing.
Monday, February 16, 2015
The Russian Banking Crisis / Interest-Rates / Russia
By: Arkadiusz_Sieron
We have shown so far that all ruble crises were accompanied by a strong U.S. dollar and low oil prices. We have concluded that Russia's current problems resemble those from 1998, though possibly even more severe than seventeen years ago, because the biggest country in the world is cut off from the international funding. But what about the following banking crisis in Russia?Read full article... Read full article...
Monday, February 16, 2015
Can Europe Recover From Its Easy-Money Obsession? / Interest-Rates / Quantitative Easing
By: MISES
Brendan Brown writes: The announcement of the euro-QE was not the start of Europe’s monetary Dark Age. That started many years ago with Chancellor Kohl’s undermining of the “hard deutsche mark Bundesbank” in the late 1980s. The darkness further descended when the newly created European Central Bank (ECB) implemented monetary frameworks which essentially tied Europe into a global 2-percent-inflation standard, following the US Federal Reserve.
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Saturday, February 14, 2015
U.S. Treasury Long Bond Breakdown / Interest-Rates / US Bonds
By: Dan_Norcini
Well, here we go again. I do not know how many times over the past year or so I have noted what looked like a chart breakdown in the US long bond. By that I specifically mean a close BELOW the 50 day moving average. Generally, that will get technicians to sit up and take notice and begin to approach a market from the short side. Each time I have noted this however, the bonds have done a flip-a-roo and back up they have gone continuing the bull streak.
Wednesday, February 11, 2015
Goldman Sachs’s Cohn: Fed in ‘Tough Position’ on Interest Rate Hike / Interest-Rates / US Interest Rates
By: Bloomberg
Gary Cohn, President and COO of Goldman Sachs, joined Bloomberg Businessweek reporter Brad Stone for an interview on Bloomberg TV. He spoke about the company's investments in the technology industry, regulation of the financial industry and the outlook for oil prices and Federal Reserve policy
When asked whether we will see a rate increase this year, Cohen said: "The Fed is in a very tough position...They’re going to be constrained by circumstances, going to be concerned about the strength of the dollar, and other countries are going to continue to devalue.”