Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, November 05, 2010
South Korea, Hong Kong, Brazil, China, Complain about Bernanke's QE Policy / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
A parade of countries have expressed grave concerns over the Fed's misguided Quantitative Easing policy.
South Korea Aggressively Considers Curbing Capital Inflows
Thursday, November 04, 2010
Fed QE2, Insanity Prevails Over Common Sense / Interest-Rates / Quantitative Easing
By: Andy_Sutton
It certainly looks as though once again insanity has prevailed over common sense. In what has become a recurring theme in our world, particularly from a policy standpoint, the Federal Reserve announced another round of government bond purchases, dubbing the effort ‘QE2’. I wonder if QE2 is any relation to R2D2 from the popular Star Wars series? I think a rather strong argument could be made that the little guy has more common sense than the entire board of Fed governors. All jest aside, however, there are rather serious ramifications to this latest round of pumping; especially since there is no reason to believe the results will be any different than the last effort. Banks and the Government will maintain the status quo while Main Street languishes.
Thursday, November 04, 2010
QE2 Is Likely to More Successful than QE1 / Interest-Rates / Quantitative Easing
By: Paul_L_Kasriel
On November 3, the FOMC announced that it would increase the quantity of its outright holdings of securities by a net $600 billion by the end of the second quarter of 2011. Thus, the Fed has re-embarked on a policy of quantitative easing. Its first real "voyage" of quantitative easing, QE1, started at the end of November 2008 and ended in March 2010. The expected (hoped for?) outcome of a quantitative -easing policy is increased nominal demand for goods and services. Under normal circumstances when the commercial banking system is not constrained by actual or expected capital inadequacy, the Fed is able to stimulate the nominal demand for goods and services by lowering its key policy interest rate, the federal funds rate.
Thursday, November 04, 2010
The Next Major Disaster Developing for Bond Market Investors / Interest-Rates / US Bonds
By: EWI
Elliott wave analysis can warn you of trend changes when the rest of the investment public least expects a market reversal. With that in mind, we have created a new report for our free Club EWI members: "The Next Major Disaster Developing for Bond Holders."
In this free report, you get some of the latest commentary on fixed-income markets adapted from various Elliott Wave International's publications, including 2010 issues of Robert Prechter's monthly Elliott Wave Theorist and its sister publication, The Elliott Wave Financial Forecast.
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Thursday, November 04, 2010
$600 billion Fed funny money! Big LIE! / Interest-Rates / Quantitative Easing
By: Larry_Edelson
This is it — the hot news that Wall Street was waiting for with bated breath.
Fed Chief Bernanke’s going to buy another $600 billion in Treasury securities to pump liquidity into the economy.
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Thursday, November 04, 2010
Reasons Why QE2 Will Fail / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
Dr. El-Erian, CEO and co-CIO of PIMCO states several reasons why QEII will backfire.
1. The Fed is going it alone, without meaningful structural reforms
2. Emerging economies burdened by capital inflows in the wake of QEII will react with currency wars, protectionism, and capital controls
3. Resultant commodity price increases will increase input costs and reduce earnings of American companies
Wednesday, November 03, 2010
Fed Announces QE2 to Make a Dent in the Unemployment Rate / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
The FOMC policy statement, as widely expected, indicated the Fed's plan to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. At the end of October 2011, the Fed's balance sheet stood at $2.278 trillion, with its holding of securities at $2.039 trillion.
Wednesday, November 03, 2010
Fed Anounces $600 Billion QE2 to Buy U.S. Treasury Bonds and Reinvest $250 Billion More / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
As expected, the Fed announced a "modest" $600 billion second round of Quantitative Easing. Estimates rated as high as $2 trillion.
Wednesday, November 03, 2010
What to Expect from the Federal Reserve’s Next Round of Quantitative Easing, QE2 / Interest-Rates / Quantitative Easing
By: Money_Morning
Jon D. Markman writes:
The U.S. Federal Reserve today (Wednesday) is all but certain to announce a second round of quantitative easing - "QE2."
Most analysts believe the Fed will pledge to buy another $500 billion in U.S. Treasuries, but I think it will go even further. My expectation is that $500 billion in Treasury purchases over six months will be just a first step, and that the full amount contemplated - as much as $2 trillion - is much larger than consensus.
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Wednesday, November 03, 2010
Real Bills (loans) are Harmful / Interest-Rates / Fiat Currency
By: Shelby_H_Moore
And analogously saving at interest rates, insurance, and all other forms
of futures contracts (promises and surety) are harmful.
Someone recently attempted to distill Real Bills, but missed the key essence of the problem with Real Bills:
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Wednesday, November 03, 2010
Why Quantitative Easing Is Similar to Monopoly / Interest-Rates / Quantitative Easing
By: Jared_Levy
The second iteration of quantitative easing (QE2) is supposed to make "money easier" -- make it flow from the banks to consumers to businesses, etc. The first round of quantitative easing pumped billions of U.S. dollars into the system, but not much of it made it into my hands, and I'm guessing yours either...
If you have ever played Monopoly and have been "the bank," you get to control all the money that is divided out to each player.
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Tuesday, November 02, 2010
A Refresher Ahead Fed's Announcement of Second Round of Quantitative Easing / Interest-Rates / Quantitative Easing
By: Asha_Bangalore
The Fed is widely expected to announce the second round of quantitative easing (QE) after the FOMC meeting on November 4. The goal of the policy change is to bring about an increase in real GDP above the tepid 2.0% pace reported for the third quarter such that it eventually makes a dent in the current elevated unemployment rate of 9.6%. The details of QE2 in terms of timing, size, and speed are awaited.
Tuesday, November 02, 2010
Goldman Sachs 50-Year Bonds Show Why Investors Should Steer Clear of Wall Street / Interest-Rates / International Bond Market
By: Money_Morning
Martin Hutchinson writes: Last week, Goldman Sachs Group Inc. (NYSE: GS) sold $1.3 billion of 50-year bonds with a 6.125% interest rate. The issue was specially designed - with bonds in denominations as low as $25 - so the securities could be sold to small retail investors.
At last, Goldie's done something for the little guy ...
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Monday, November 01, 2010
U.S. Treasury Bond Market Stabilises / Interest-Rates / US Bonds
By: Levente_Mady
The bond market stabilized last week. Although the economic data schedule was rather busy, trading was more heavily influenced by the Treasury auctions and month end activity as the second tier fundamental news did not offer any major surprises. While the volatility in the currency markets continued, the chop was more sideways and less directional. Trading in stocks and bonds had the same directionless character. The Treasury auctions were somewhat strange during this cycle. Normally the shorter maturities are relatively well received and the longest tranche can hit some bumps. Last week the 2 year auction was mediocre, the 5 year was sloppy but the 7 year bonds were very well received on Thursday setting up – as advertised - a seasonal bond rally into month end very nicely.
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Friday, October 29, 2010
QE2 Sends U.S. Interest Rates Higher / Interest-Rates / US Interest Rates
By: Mike_Larson
So if the latest reporting is to be believed, QE2 is a fait accompli.
The Wall Street Journal on Wednesday said the Federal Reserve plans to purchase “a few hundred billion dollars” worth of Treasuries over a period of “several months.” The Fed will stick largely with Treasury notes, rather than bills or bonds, with the lion’s share of the buying focused on securities with maturities between two and ten years.
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Friday, October 29, 2010
Are the German Bund Bulls Finished? / Interest-Rates / International Bond Market
By: Seven_Days_Ahead
During the Euro zone sovereign debt crisis the Bund was a strong safe-haven trade. This may seem paradoxical given the nature of the crisis: investors were worried about the solvency of several Euro zone governments, but sought shelter from government default in the Euro Bund.
Thursday, October 28, 2010
U.S. Treasury Bond Market Developing Disaster / Interest-Rates / US Bonds
By: EWI
Greetings investor,
If you have money in mutual funds, Treasury bonds, municipal bonds or high-yield bonds, Robert Prechter has just issued a crystal-clear warning for you: Your money could be at risk.
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Wednesday, October 27, 2010
PIMCO Bill Gross's Arrogant Endorsement of Fed's QE Policy / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
It is not often you see bond managers openly embrace Ponzi schemes, but that is exactly what Bill Gross did in his post Run Turkey, Run.
Read full article... Read full article...There’s another important day next week and it rather coincidentally occurs on Wednesday – the day after Election Day – when either the Donkeys or the Elephants will be celebrating a return to power and the continuation of partisan bickering no matter who is in charge. Wednesday is the day when the Fed will announce a renewed commitment to Quantitative Easing – a polite form disguise for “writing checks.” The market will be interested in the amount (perhaps as much as an initial $500 billion) as well as the targeted objective (perhaps a muddied version of “2% inflation or bust!”). The announcement, however, has been well telegraphed and the market’s reaction is likely to be subdued. More important will be the answer to the long-term question of “will it work?” and perhaps its associated twin “will it create a bond market bubble?”
Wednesday, October 27, 2010
Quantitative Easing Program Confirmed by Federal Reserve / Interest-Rates / Quantitative Easing
By: David_Urban
Not content on waiting to reveal to the markets after the conclusion of the November 3rd Federal Reserve meeting, the St. Louis Fed just published an article in the latest Monetary Trends entitled 'Is More QE in Sight?'
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Wednesday, October 27, 2010
U.S. Treasury Bond Bubble about to POP! / Interest-Rates / US Bonds
By: Claus_Vogt
Financial history shows that interest rates — and hence bond prices — have risen and fallen in long-term trends spanning decades. The following chart shows the 10-year Treasury since 1953.
As you can see, rates started rising shortly after the recession that ended in May 1954. In the second half of the 1960s this uptrend gathered speed. The market seemed to smell high inflation coming in the 1970s. And by the end of that decade and into 1980/81 rates soared. In fact, they peaked at slightly more than 15 percent — six times higher than the 1954 low!
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