Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, May 31, 2013
Why U.S. Treasury Bonds Are Still the Worst Investment / Interest-Rates / US Bonds
By: InvestmentContrarian
Sasha Cekerevac writes: Savers have had a difficult time finding suitable places to allocate capital from which they can derive income. I’ve previously warned against allocating new funds to the investment strategy of U.S. Treasuries, as this would likely be the worst investment over the next decade.
Now, it appears that investors are increasingly coming to the same conclusion that I stated several months ago in these pages: U.S. Treasuries are set for a significant drop in price.
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Thursday, May 30, 2013
Fed Money Printing Real Conundrum! / Interest-Rates / Quantitative Easing
By: Robert_M_Williams
Back in the heady days of Alan Greenspan, when you couldn’t identify a bubble until it was too late, the Maestro was busy printing. The money went into the tech stocks up until that train went off the tracks in early 2000. So the Fed started to print even more and that led to a housing bubble. As most of us are painfully aware, the housing blew up in 2007 so Greenspan’s predecessor, Ben Bernanke, had to put the printing press into a higher gear. The Fed then created mandates in order to justify the excesses and they included increased growth and employment. Unemployment must drop to 6% or less and growth must surpass 3% while keeping inflation at 2%. The end result of all this is a chart of the money supply that looks like this:
Monday, May 27, 2013
Funny Money Turns Serious / Interest-Rates / Quantitative Easing
By: Brady_Willett
When former Asian Development Bank head, Haruhiko Kuroda, was nominated to be the next Bank of Japan Governor on February 27, 2013 he was not shy about stating his intentions: “there is "plenty of room for monetary easing”” (WSJ). And after landing the job as BOJ Chief, Kuroda immediately confirmed that he would do “whatever it takes” to end deflation. Well, a mere two months and a massive new printing scheme later, Kuroda is already on the defensive, arguing that a recent jump in bonds yields is manageable and asset prices are not behaving irrationally.
Sunday, May 26, 2013
High Risk of Japan Economic Instability as Rates Rise Even With 70% Debt Monetization / Interest-Rates / Global Debt Crisis 2013
By: Mike_Shedlock
When political leaders do out of there way to make make mollifying statements on the economy, it's a sure thing the opposite is about to happen. Platitudes are flowing in Japan as Haruhiko Kuroda, Japan’s central bank governor, says the risk of systemic instability is “not large”.
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Wednesday, May 22, 2013
Why Bernanke and His Pals Are Terrified / Interest-Rates / Quantitative Easing
By: Graham_Summers
Two big events have occurred/ are occurring.
1) Chicago Fed President, Charles Evans who is one of the biggest pushers for QE, stated that the Fed has “the appropriate monetary policy in place” and that the economy is “improving quite a lot.”
2) The Bank of Japan is beginning a two-day policy meeting today.
Regarding #1, Evans has been one of the biggest pushers for more QE. Throughout 2011 and 2012, every time he appeared on TV he stated that the Fed should do more.
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Tuesday, May 21, 2013
Japan Debt Crisis Is 30 Times Bigger Than Greece! / Interest-Rates / Global Debt Crisis 2013
By: Graham_Summers
Japan has fueled much of this latest rally in stocks, driving the marketing first with promises of money printing by the Prime Minister in November 2012, and then a massive $1.2 trillion QE program announced by the Bank of Japan last month.
The result of this has been a collapse in the Yen and a 70%+ rally in the Nikkei in the last six months.
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Friday, May 17, 2013
The Biggest Financial Bubble About to Burst! / Interest-Rates / US Bonds
By: DeepCaster_LLC
“Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system. The system remains still in the throes and aftershocks of the 2008 panic and the near-systemic collapse, and from the ongoing responses to same by the Federal Reserve and federal government. Further panic is possible and hyperinflation is inevitable.
“The economic and systemic solvency crises of the last eight years continue. There never was an actual recovery following the economic downturn that began in 2006 and collapsed into 2008 and 2009. What followed was a protracted period of business stagnation that began to turn down anew in second- and third-quarter 2012. The official recovery seen in GDP has been a statistical illusion generated by the use of understated inflation in calculating key economic series (see Public Comment on Inflation). Nonetheless, given the nature of official reporting, the renewed downturn likely will gain recognition as the second-dip in a double- or multiple-dip recession.
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Friday, May 17, 2013
How the U.S. Government Makes $120 Billion From Student Loans Misery / Interest-Rates / Student Finances
By: Money_Morning
David Zeiler writes: Business has been good for the federal government when it comes to student loans.
Over the past five years, student loans have generated profits of $120 billion for the Department of Education.
And the latest projections from the Congressional Budget Office (CBO) put the take from student loans for the 2013 fiscal year at $48.6 billion - helped along by a change in 2010 that eliminated the middleman and made the Education Department the direct lender for all government-backed loans.
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Wednesday, May 15, 2013
Warning: How the Bond Market Bubble Will Secretly Sabotage Your Retirement / Interest-Rates / US Bonds
By: Money_Morning
David Zeiler writes: A tool intended to make retirement investing easier may result in many Americans taking an unwitting hit to their portfolios when the bond bubble finally pops.
We're talking about target-date funds, designed to be "set it and forget it"-style retirement vehicles for people who don't want to bother with actively managing a portfolio.
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Wednesday, May 15, 2013
Warning U.S. Treasury Bond Bull Market May Be Over / Interest-Rates / US Bonds
By: DailyGainsLetter
Moe Zulfiqar writes: When the financial crisis took grip on the U.S. economy, investors fled the stock market and ran towards bonds—more specifically, high-quality U.S. government bonds. The reason behind this was very simple: they would rather invest their money in something where they knew their capital was safe than in the stock market, which was uncertain at the very best.
Tuesday, May 14, 2013
Why I'm NOT Betting on Higher Interest Rates / Interest-Rates / US Interest Rates
By: DailyWealth
Dr. Steve Sjuggerud writes: Bill Gross is the world's greatest bond investor. But I'm not betting on his latest market call... And you shouldn't either.
Gross is to the bond market what Warren Buffett is to the stock market...
Just like Buffett, Gross has managed to trounce his peers for decades even as his assets under management have grown to an incredible size. Gross' firm PIMCO now manages over $2 trillion in assets, making it the world's largest bond investor.
Tuesday, May 14, 2013
The Return of the Bond Vigilante... in Japan / Interest-Rates / Global Debt Crisis 2013
By: Jeff_Berwick
On April 11th we went public stating that shorting Japanese Government Bonds (JGBs) was an effective means of, "Profiting from The End Of The Monetary System As We Know It" (TEOTMSAWKI).
Less than a month later, on May 10th, after a month replete with numerous halts of the market over intraday crashes JBGs had their worst day in the last five years. Yields rose higher by 11bps to 70bps in the 10 year bond and ended up 10 basis points higher on the day.
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Monday, May 13, 2013
Hedge Funds Are Pouring Into Distressed Debt / Interest-Rates / Corporate Bonds
By: Money_Morning
Greg Madison writes: Regulators have demanded that banks stop engaging in so much risky behavior - chiefly, distressed debt investing. And the banks have begun to curtail this type of investing.
But this has led to an unprecedented - though not unpredictable - situation: It seems the hedge funds are picking up the slack.
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Sunday, May 12, 2013
European Finances Still in taters, Ireland, Spain.... Still on the Brink / Interest-Rates / Eurozone Debt Crisis
By: Raul_I_Meijer
Ireland was one of the first European countries to get hit by the financial crisis. It decided to bail out its banks at the direct cost of the taxpayer. In 2012, those banks were still overleveraged (and still are today) to the same level as for instance Cyprus, with assets over 800% of GDP. Probably only Iceland has been worse (UK?!). According to IMF/EC, 2012 Irish national debt was 117% of GDP; not a pretty number either. This all as a lead-up to a May 5 article by Dan White in the Irish Independent that TAE's own Nicole Foss sent over recently. But first a little history, for who may be bit shaky on it, just for fun, and to explain how Ireland got to have its present population of 4.5 million people.
Sunday, May 12, 2013
European Banking Is Getting Scary / Interest-Rates / Eurozone Debt Crisis
By: GoldSilverWorlds
The past week was not only characterized by US equity markets making one all-time high after another. Much less excitement was associated with one frightening message after another related to the state and prospects of the (European) banking sector.
Saturday, May 11, 2013
On the Verge of the Biggest Bond Market Implosion of All Time / Interest-Rates / Japanese Interest Rates
By: Graham_Summers
Japan should serve as a lesson to central planners around the world.
Japan’s stock market/ real estate bubble burst in the early ‘90s. Since that time Japan has launched NINE QE efforts equal to roughly 25% of its GDP. And GDP growth has worsened despite these efforts from 2% to 1%. Ditto for employment.
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Friday, May 10, 2013
Global Interest Rates From An Austrian Economics Viewpoint / Interest-Rates / International Bond Market
By: GoldSilverWorlds
Interest rates all over the world are at historic lows or even negative in some instances.The recent interest rate cut by the European Central Bank brought the interest in Europe to its lowest level ever. The US is going through its fifth consecutive year of almost zero interest rates, which is the longest period ever in times of “peace.” People should question what the longer-term implications are for our economies and for society as a whole. An answer to this question is given by Claudio Grass who wrote about the matter in his latest outlook report (Global Gold Outlook Report)
Friday, May 10, 2013
The Fed Admits it's Dug itself into a Very Big Hole / Interest-Rates / Quantitative Easing
By: Bloomberg
Charles Plosser, president of the Philadelphia Federal Reserve Bank, told Tom Keene and Sara Eisen on "Bloomberg Surveillance" today that "we've dug ourselves a very large hole" and that "when I've weighed the costs and benefits of this [quantitative easing] policy, I've decided that the costs outweigh the benefits."
Plosser also said that it is "disturbing" to him that "more and more is being expected of central banks." He said, "We are expected to solve all the world's problems. Our fiscal authorities are not doing a very good job in any country."
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Friday, May 10, 2013
Long-Term Investors in Danger From Higher Inflation Expectations? / Interest-Rates / Inflation
By: InvestmentContrarian
Sasha Cekerevac writes: One of the biggest concerns for investors when it comes to long-term investing is the safe return of their capital. Following the 6.75% levy imposed by Cyprus on deposits of less than 100,000 euros, many investors were shocked that such an event could take place.
Certainly, long-term investing does have risks, including a hidden hazard of the possibility that a rising inflation rate will erode wealth just as easily as the levy imposed by Cyprus on bank deposits.
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Thursday, May 09, 2013
Bank of England Celebrates 50 Months of Stealth Inflation Theft From Savers and Tax payers / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England today kept interest on hold at 0.5% for the 50th month, as Britain's central bank continues to support its bankster brethren in the crime syndicate that calls itself Britain's banks who continue to literally get away with crimes without any real consequences as evidenced by the over 6 year old LIBOR scandal that the mainstream press and financial regulator only awoke to mid last year. As far as I am ware no one has gone to prison for this mega-fraud, instead the CEO's of Britians major banks have been retired on mega-pension handouts whilst all of the fines are at the end of the day being picked up by British tax payers.