Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, August 24, 2010
Why US Treasury Notes Will Eventually Yield Nothing / Interest-Rates / US Bonds
By: Barry_M_Ferguson
For all investors seeking income, I have some bad news for you. US Treasury notes and bonds will eventually yield nothing. That’s right, I said it. “Zero percent interest coupons”. Many pundits would argue the opposite. And yes, the argument for higher interest coupons in the future is valid and sound. The US is currently following a strategy of debt destruction such that as I write, the nation is closing in on $13.5 trillion in debt. To see the number is quite startling. It is: $13,500,000,000,000.00. Mercy! The number is so large, most calculators can’t account for all the numeric placeholders. The number is so large, we now round up by hundred billions. The number is so large, the late astronomer, Carl Sagan, referred to really large numbers as “billions and billions”.
Tuesday, August 24, 2010
A U.S. Treasury Bond Bubble? Not Likely! / Interest-Rates / US Bonds
By: Guy_Lerner
My thoughts on the bond bubble can be summarized in two words: "not likely". When commentators have to tell you it is a bubble, it isn't a bubble. Or to put this in another context, name me one market top in the last 10 years where the commentators on CNBC where not imploring their audience to buy at the top. If anything, the commentators have this aura of incredulousness. "How dare bonds head higher and stocks head lower. Doesn't everyone know how undervalued equities are?" When CNBC throws in the towel and when they utter those famous words - "is it to late to buy now?" - then we can consider the possibility of a bond bubble.
Tuesday, August 24, 2010
Bill Gross Pushing for MORE Bailouts for PIMCO Bond Fund / Interest-Rates / US Bonds
By: Mike_Stathis
Two years ago when Fannie Mae and Freddie Mac were collapsing, former Goldman Sachs CEO and U.S. Treasury Secretary Henry Paulson repeated the promise of “no more bailouts,” so as to calm worried Americans who feared they would be on the hook for hundreds of billions of dollars of toxic mortgages held by these GSEs.
Monday, August 23, 2010
What Does Debt-Based Money Imply for Interest Payments? / Interest-Rates / US Debt
By: Robert_Murphy
In a previous article, I explained the sense in which our fractional-reserve, fiat financial system is built upon debt-based money. In this perverse arrangement, new dollars come into existence through the creation of government and private debt. Going the other way, if the private sector and the federal government ever began seriously paying down their debts, the supply of US dollars would shrink.
Sunday, August 22, 2010
U.S. Treasury Bond Market Continues to Power Ahead / Interest-Rates / US Bonds
By: Levente_Mady
The long bond futures moved up another couple of points as the fundamental backdrop looks to be increasingly dire. In spite of the bullish bias of equity options expiry week, stocks struggled mightily last week as the stocks to bonds investment flows gained momentum. We are back to the risk versus safe haven trade as the US Dollar and bonds benefitted from their perceived safe haven status.
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Thursday, August 19, 2010
The Utility of Debt / Interest-Rates / US Debt
By: Dr_Jeff_Lewis
For many, debt is a burden. For many others, it's a utility to be respected. Regardless of which position you take, realize that there are some situations in which debt is beneficial - and others where it's just dangerous. For the US Government, debt is now just simply dangerous.
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Wednesday, August 18, 2010
U.S. Treasury Bonds Inverse Chart, If This Were A Stock.... / Interest-Rates / US Bonds
By: Guy_Lerner
See figure 1 a weekly price chart. The 40 week moving average (i.e, red line) is heading higher, and prices are trading above key pivot points, which are areas of support (buying) and resistance (selling). In essence, this is a "beautiful" chart with lots of momentum (i.e., note the breakout gaps). If this were a stock, the analysts and pundits would be all over the "breakout" ---blah, blah, blah.
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Tuesday, August 17, 2010
U.S. Treasury Bonds vs Dow Jones 30 Yield Analysis / Interest-Rates / Investing 2010
By: Dian_L_Chu
Government bonds across the globe are benefiting from concern about anemic economic growth, the risk of deflation in the US, and the Federal Reserve’s decision to reinvest maturing bonds and buy US Treasuries. Yields on Japanese, German, UK and US government bonds fell to fresh multi-month and, in some cases, all-time lows.
Tuesday, August 17, 2010
This Market Just Flashed a Huge Warning Signal / Interest-Rates / US Bonds
By: DailyWealth
Tom Dyson writes: David Rosenberg calls it the smoking gun...
Rosenberg and I just spoke on the phone. You might not know his story, but David Rosenberg is a Wall Street legend.
Monday, August 16, 2010
Corporate Bonds, The Safest Source of High Income Today / Interest-Rates / Corporate Bonds
By: DailyWealth
Tom Dyson writes: What's the safest way to earn high income right now? You buy bonds...
American companies are absolutely loaded with cash. Take Microsoft, for example. It has $35 billion in cash and only $6 billion in debt. Accountants would say Microsoft has a net cash position of $29 billion.
Saturday, August 14, 2010
Quantitative Easing No Exit - Stage Left or Right / Interest-Rates / Quantitative Easing
By: Peter_Schiff
This week, national attention was fixated on JetBlue flight attendant Steven Slater, whose bold, creative, and controversial exit strategy could revitalize his future prospects. Not nearly as noticed was the Federal Reserve's decision on Tuesday to avoid finding an exit strategy for its own never-ending career trap. Unfortunately, the Fed's choices affect our lives much more than Slater's.
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Friday, August 13, 2010
QE2, Fed Policymakers Screw It Up Again! / Interest-Rates / Quantitative Easing
By: Mike_Larson
Albert Einstein famously defined insanity as doing the same thing over and over again and expecting different results. But apparently the message hasn’t gotten through to the folks in the Eccles Building in Washington. Because the Federal Reserve is at it again!
This week, policymakers met in D.C. and decided to fire up the printing presses. Led by “Helicopter Ben” Bernanke, they pledged to buy new Treasury securities whenever old Treasuries or mortgage securities matured or were paid off.
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Thursday, August 12, 2010
Hey DeLong! U.S. Treasury Bond Bubble Prices Do Not Justify Bubble Prices! / Interest-Rates / US Bonds
By: Brady_Willett
The U.S. government bond market is the last of the great asset bubbles. We know this, first and foremost, because no one in any position of power in America is willing, and perhaps more precisely able, to enact the painful policies required to ever repay current/future obligations - and yet the market does not, as yet, seem to care.
Thursday, August 12, 2010
Japanese Style Deflation Fear Strikes Global Bond Markets / Interest-Rates / Deflation
By: Gary_Dorsch
The US-economy has not experienced sustained deflation since the Great Depression of the 1930’s, when consumer prices fell 10% between 1929 and 1933. But Japan has been battling falling prices since 1995, – triggered by the bursting of the Nikkei-225 equity bubble, and a unrelenting slide in land prices. Central bankers and macro-economists from all corners of the earth have been studying Japan’s descent from its giddy economic prosperity in the 1980’s, and into the deflation trap in the 1990’s, that Tokyo’s financial warlords have still been unable to remedy.
Thursday, August 12, 2010
Gold and U.S. Treasury and Mortgage Bonds Naked Shorts As Liquidity Machine / Interest-Rates / US Bonds
By: Jim_Willie_CB
The article of July 22nd on "Smoking Guns of USTreasury Monetization" hit more desks, raised more dust, and brought more attention than expected to the grand fraud in progress using USGovt debt securities. The glaring actions continue without any hint of legal prosecution but deep foreign resentment among creditors as publicity mounts. Nobody appreciates counterfeit of the instruments held in great volume as supposed savings. The only counterfeit of honorable origin is of Microsoft products, since mostly stolen and surely not the output of in-house innovation.
Wednesday, August 11, 2010
Front Running the Fed Treasury Bond Purchase Announcement - Who Knew? / Interest-Rates / US Bonds
By: Mike_Shedlock
Curve Watchers Anonymous is paying close attention to the following snip from the Bloomberg article Pimco Calls Fed Rate Policies ‘Good for Risk Assets’
Read full article... Read full article...The central bank said in a separate statement that it will announce a purchasing schedule today and that its buying will be concentrated “in the two- to 10-year sector” of the maturity spectrum, though it will also buy other maturities as well as Treasury Inflation Protected Securities.
Wednesday, August 11, 2010
Impotent U.S. Fed 'Swings' Limp Appendage / Interest-Rates / US Interest Rates
By: Alex_Wallenwein
Bernanke and the other Fed governors know they are out of bullets, and that even if they had any bullets left, there would be nothing to shoot them at. So, the next best policy option on August 10, 2010 was for them to at least appear to be doing “something” to assure financial markets and institutional investors that they could rest (in peace?) in the secure knowledge that, because the Fed is doing “something” at least, there must still be something it can do to make the economy all better.
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Wednesday, August 11, 2010
Credit Easing Goodbye, Quantitative Easing Ahoy! / Interest-Rates / Quantitative Easing
By: Axel_Merk
The Federal Open Market Committee (FOMC) has decided to reinvest any proceeds from maturing securities acquired through its $1.25 trillion mortgage-backed security (MBS) purchase program. The proceeds won't be invested in short-term, but in long-term Treasuries.
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Tuesday, August 10, 2010
Quantitative Easing Take II Into Uncharted Territory / Interest-Rates / Quantitative Easing
By: Mike_Shedlock
In response to Will Quantitative Easing Spur Inflation? Job Creation? Credit Expansion? Do Anything? (a point-by-point discussion of thoughts from Chris Ciovacco at Ciovacco Capital Management regarding quantitative easing), I received a nice reply from Chris.
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Monday, August 09, 2010
U.S. Treasury Bond Market Continues to Power Ahead / Interest-Rates / US Bonds
By: Levente_Mady
The bond market continues to power ahead. The long bond futures tested the 130 level for the first time in 20 months and look set for a slight breather heading into the long auction cycle next week.
While stock investors seem to be oblivious of the mounting evidence of a significant deflationary loss of economic momentum (or maybe they just choose to ignore it on purpose), the Federal Reserve will get its chance to vocalize its concerns following their Policy Meeting scheduled for next Tuesday.
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