Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Tuesday, January 20, 2009
Credit Crisis Explained: History of Debt Bubbles and Long-term Interest Rates / Interest-Rates / Credit Crisis 2009
By: John_Mauldin
There is a reason I call this column Outside the Box. I try to get material that forces us to think outside our normal comfort zones and challenges our common assumptions. And this week's letter from Hoisington Investment Management Company does just that. Let me give you two quotes to pique your interest: "Monetary policy works by creating the environment for a renewed borrowing and lending cycle. This cycle would require that the debt to GDP ratio, which is already at a record level, grow even higher. Would such an outcome really be that desirable when the controlling problem of the U.S. economy is too much improperly financed debt? If the Fed were able to engender an increase in the debt to GDP ratio, this might merely serve to postpone the reckoning of the current debt levels while laying the foundation for an even more vicious unwinding down the road.Read full article... Read full article...
Monday, January 19, 2009
U.S. Treasury Bond Market Enters 2009 Trading Range / Interest-Rates / US Bonds
By: Levente_Mady
The bond market appears to be settling down into a trading range after the sharp rally during the last 2 months of 2008. The Long Bond essentially recovered the losses from the previous week. The financial sector continues to unravel and the effects are translating into massive problems for the global economy. Read full article... Read full article...
Thursday, January 15, 2009
The Trading Opportunity of 2009 Shorting U.S. Treasury Bonds / Interest-Rates / US Bonds
By: Guy_Lerner
In a previous post on long term Treasury bonds, I reviewed some of the technical factors that have me bearish. "So it is highly likely, from this perspective, that Treasury bonds will be an under performing asset class over the next 12 months. But more importantly, will this market top lead to an investing opportunity (i.e., by shorting Treasury bonds)? In other words, will the market top lead to a secular trend change in Treasury bonds?" Read full article... Read full article...
Thursday, January 15, 2009
U.S. Treasury Bond Bubble in Trouble? / Interest-Rates / US Bonds
By: Brady_Willett
If you have not yet read about the ominous U.S. Treasury bubble (which has been around for awhile ), here is recent a recap: “Risk-free return” is the standard tag attached to the government's solemn obligations. An investor I know, repulsed by prevailing government yields, has a timelier description – “return-free risk”.James Grant – December 4, 2008
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Wednesday, January 14, 2009
Credit Crisis Contraction Gaining Positive Traction / Interest-Rates / Credit Crisis 2009
By: Prieur_du_Plessis
In order to gauge the progress being made to unclog credit markets and restore confidence in the world's financial system, I monitor a range of financial spreads and other measures. By perusing these, as summarized in this “Credit Crisis Watch” review, one can ascertain to what extent the various central bank liquidity facilities and capital injections are having the desired effect. Read full article... Read full article...
Wednesday, January 14, 2009
Ultra-Short Treasury Bond ETF Heading Sharply Higher / Interest-Rates / US Bonds
By: Mike_Paulenoff
Below is what I wrote about the ProShares UltraShort 20-year T-Bond ETF (AMEX: TBT) exactly 24 hours ago, which appears to have unfolded pretty close to expectations. If the pattern continues to unfold as I expect, the TBT should hold between 39.00 and 38.50 ahead of a potent upleg that continues the advance off of the 12/18 low at 35.51. Read full article... Read full article...
Tuesday, January 13, 2009
Breakpoint for the Global Monetary System / Interest-Rates / Global Financial System
By: Dr_Krassimir_Petrov
CHAOS & ORDER - The global monetary system is at a critical juncture. It is fast approaching a breakpoint. We take a philosophical worldview based on chaos theory that considers the evolution of seemingly stable complex systems reaching a bifurcation point, where the whole system rather unpredictably either “explodes” or “implodes” with a lightning speed. The transition is perceived as “chaotic” – the old order collapses and a new order is established. We think that the global monetary system approaches bifurcation – the breakpoint. Read full article... Read full article...
Monday, January 12, 2009
Bond Market Plunges as Yields Move Sharply Higher / Interest-Rates / US Bonds
By: Levente_Mady
The bond market traded off for 2 weeks after 8 consecutive weeks of substantial gains. The pullback was sharp, but insignificant relative to the magnitude of the unprecedented move that the long bond futures made over the past 2 months. As expected, once the yearend buying demand was out of the way, the bong bond cracked in a significant fashion. Last week the market faced the same tug of war that is likely to dominate the market going forward: supportive fundamental news countered by increasing supply concerns. During the first full trading week of the year, the bears won the battle in spite of relatively successful Treasury Note auctions. Read full article... Read full article...
Friday, January 09, 2009
The Fed’s U.S. Treasuries Bubble Trouble / Interest-Rates / US Bonds
By: Peter_Schiff
A few weeks ago when the Fed announced a strategy designed to bring down long-term interest and home mortgage rates through unlimited Treasury bond purchases, government debt staged a spectacular rally. To the unschooled market observer, the spike may be difficult to understand. After all, why would the value of Treasury bonds rise while their underlying credit quality is deteriorating faster than Bernie Madoff’s social schedule? The move is actually a perfect illustration of the tried and true Wall Street strategy of “buy the rumor and sell the fact”.Read full article... Read full article...
Friday, January 09, 2009
U.S. Debt Crisis 2009, What must our Creditors be Thinking? / Interest-Rates / US Debt
By: Chris_Galakoutis
I read an article recently about problem gambling. You can't help but notice all the poker on television these days. Gambling, lotteries, and all forms of speculation become more popular in inflationary times, as more people have difficulty making ends meet. Problem gambling has been known to strain relationships, interfere with responsibilities at home and work, and lead to financial catastrophe, as more good money is thrown after bad.Read full article... Read full article...
Thursday, January 08, 2009
UK Interest Rate Cut to New All Time Low of 1.5% / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England cut UK interest rates earlier today by 0.5% to 1.5%, the lowest that the base rate has been in the BoE's 315 year history. The series of rate cuts are a belated panic response to the UK economy plunging over the edge of a cliff that looks set to endure GDP contraction of 3% this year which is worse than any 12 month period since World War 2. Sterling rallied from near record lows against the Euro buoyed by a less than expected cut as many market commentators had expected rates to be cut by 1% today. Read full article... Read full article...
Thursday, January 08, 2009
U.S. Treasury Bills, Can you hear the Bond Market POP!? / Interest-Rates / US Bonds
By: Daniel_Smolski
Keynesian capitalism continues to bring with it a saga of never ending bubbles. In just the past decade, we have been faced with the internet bubble bursting of 2000 and a massive real estate bubble that has brought the American economy to its knees. All are examples of a gross misallocation of resources caused by an excess money supply searching for home. The recent credit crunch has provided us with an opportunity to deflate and wipe away all unnecessary liquidity but the Federal Reserve, along with their posy of world bankers, have chosen instead to attempt to reflate a balloon that has already burst. Turning on all the world's liquidity taps has thus far proven to be working. We have beaten down the “evil” that is deflation and we look forward to an era of continued inflation. Inflation that will, undoubtedly, spiral out of control and potentially lead to a period of hyper-inflation. Read full article... Read full article...
Wednesday, January 07, 2009
Your Country Needs You to Buy Government Bonds / Interest-Rates / US Bonds
By: Adrian_Ash
"Are you 100% American? Prove it! Buy US government bonds..." - Poster from the US Treasury promoting the Third Liberty Loan, 1918
THE BRITISH PRIME MINISTER, David Lloyd George, joked in 1915 that it was Britain's political and financial stability which would always enable it to raise "the last million".
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Wednesday, January 07, 2009
U.S. Dollar Dead Bounce Ends, Treasury Bond Bubble Begins to Dissipate / Interest-Rates / US Bonds
By: Jim_Willie_CB
The marquee line best describing the past two to three months has been that the Dollar Death Dance has been fueled by failure of US banks & corporations, along with sponsored assaults against speculative hedge funds. The climate has changed from liquidation and bankruptcies, obviously steered and exploited by the Powerz, toward more legitimate attempts to have a recovery initiative take root across the landscape, It is fast approaching a wasteland. The most vivid signal of market manipulation, intended to benefit the USGovt borrowing costs, and designed to promote the totally false notion of a Flight to Safety, has been the USTreasury bubble. Read full article... Read full article...
Wednesday, January 07, 2009
Long-term U.S. Treasury Bonds Update / Interest-Rates / US Bonds
By: Guy_Lerner
I have been bearish on long term Treasury bonds long before it was fashionable, and this past week, Barron's has a cover story on Treasuries entitled, "Get Out Now!" It is their belief that "the bubble in Treasuries looks ready to pop, sending prices on government debt sharply lower." Read full article... Read full article...
Wednesday, January 07, 2009
Zero Interest Rate Policy and the Liquidity Trap / Interest-Rates / Credit Crisis 2008
By: Mick_Phoenix
Welcome to the Weekly Report (published 4 Jan 09). I had a nice break over Christmas and the New Year, having spent a week in Norway skiing enjoying guaranteed snow and a good exchange rate to Sterling, thus avoiding the horrible reality of a less than 1:1 Sterling/Euro tourist rate. Sometimes all this macro-econobabble has its uses.
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Wednesday, January 07, 2009
U.S. Treasury Bond Bubble Bursting? / Interest-Rates / US Bonds
By: Captain_Hook
They've done it now. The Fed has revealed the level of panic they are in behind the scenes by cutting rates to zero and promising unbounded quantitative easing . Here, it should be noted that based on remarks from the Fed Policy Statement Tuesday, quantitative easing is now set to go beyond the bailout style monetiziations of financials that have primarily characterized re-inflation efforts under the gaze of Bernanke and Paulson so far to include just about anybody who needs ‘social assistance', which apparently includes all degrees of bad investors / speculators these days. Make a bad investment. No worries if you're an American apparently as ‘the check is in the mail'. Read full article... Read full article...
Tuesday, January 06, 2009
U.S. Banks Refuse to Detail How They’re Spending Federal Bailout Money / Interest-Rates / Credit Crisis Bailouts
By: Money_Morning
William Patalon III writes: After receiving hundreds of billions of dollars in taxpayer-funded federal bailout money, the biggest U.S. banks say they can't track how that money is being spent.
Some of the banks are outright refusing to discuss the matter, a new study has found. Read full article... Read full article...
Monday, January 05, 2009
U.S. Treasury Bond Bubble Primed for Inevitable Crash / Interest-Rates / US Bonds
By: Paul_Lamont
As Treasury Bill yields fell during the early 1930's, Treasury Bonds moved in the opposite direction . As you can see from Table 48 (also from A History of Interest Rates ), Bonds rose in yield (fell in price) during the banking crises of 1930-32. Read full article... Read full article...
Friday, January 02, 2009
U.S. Treasury Bond Bubble Ripe for Explosion / Interest-Rates / US Bonds
By: John_Browne
Bonds in 2009: A Tough Call - The second half of 2008 will be remembered as the era in which justifiably panicked investors fled the global equity markets and flooded into the bond markets, particularly the U.S. Treasury market. As I write this, the migration largely continues.Read full article... Read full article...