Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Friday, July 27, 2007
Central Banks Print Money Whilst Money Market Interest Rates Fall / Interest-Rates / Credit Crunch
By: Submissions
KEEPING OUR EYES PEELED FOR THE SILVER AND GOLD BASIS
Setting up the trip-wire
Gamblers shorting the dollar and bonds beware. Rumors about the imminent demise of the dollar and the bond market are grossly exaggerated. Bear in mind not only that the casino owner rigs your odds. He is also rigging the value of chips in which payoffs are made, thereby confusing the issue further.
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Friday, July 27, 2007
Back to Banking Basics - Risk Rating Agencies Assigning AAA to Risky Debt / Interest-Rates / Risk Analysis
By: Adrian_Ash
REMEMBER WHEN banks lent money using the cash deposited with them?
That's how most people still imagine banking works, even today. The banks hope to profit simply by charging more on their loans than they pay out to cash depositors. The art (or science) comes in choosing only the most credit-worthy borrowers, or adjusting the interest rate charged to higher risk debtors accordingly.
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Tuesday, July 24, 2007
Nolte Notes - Sublime to Sub-prime / Interest-Rates / Subprime Mortgage Risks
By: Paul_J_Nolte
The market focus has begun to move from the sublime to sub-prime. Housing was to be well contained, earnings growth (although slowing) was to march inexorably higher and investors mergers and acquisitions were going to (eventually!) remove every stock from the markets. Then Friday happened. Earnings warnings from Caterpillar and a miss by internet giant Google cast doubt about the overall strength of earnings for the quarter.Read full article... Read full article...
Monday, July 23, 2007
Bear Stearns / Subprime Crisis - Looking for Contagion in All the Wrong Places / Interest-Rates / Credit Crunch
By: John_Mauldin
This Week in Outside the Box we Join Bill Gross of Pimco in his July 2007 Investment Outlook as he strives to address the implications of the Bear Stearns hedge fund debacle, the toxic waste that is Wall Streets' innovative derivative products and their respective valuation, rather, lack thereof.Read full article... Read full article...
Friday, July 20, 2007
The State of the Credit Markets / Interest-Rates / Credit Crunch
By: John_Mauldin
In this issue:
Hot Fun In The Summertime
Collateralized Loan Obligations
The Economic Outlook for Leveraged Credits
The New Mickey Mouse Club
Planes, Trains and Automobiles
This week I am already in Maine and getting ready for a weekend of fishing with my son Trey, so I am going to take off a week from writing the letter. I spoke this morning to the Maine chapter of the Chartered Financial Analysts in Portland. The question of the day was about the subprime markets, private equity and the debt markets in general. And these are the right questions, as this is the part of our economic world with the most risk.
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Wednesday, July 18, 2007
UK Inflation CPI Falls But Interest Rates Set to Rise to 6% By October 2007 / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
Yesterday the 'official' measure of UK inflation the Consumer Price Index (CPI) fell from 2.5% to 2.4%, and thus trending in the right direction towards the 2% target after a scare earlier in the year when the CPI breached the upper limit of 3%, prompting the Governor of the Bank of England to write a letter to the former Chancellor Gordon Brown explaining why the Bank had failed to control inflation.Read full article... Read full article...
Tuesday, July 17, 2007
Bear Stearns Yet to Report Mortgage Bond Losses - Bish, Bosh, Loads of Dosh! / Interest-Rates / Credit Crunch
By: Adrian_Ash
"...Wasn't Bear Stearns supposed to report the losses at its two mortgage-bond hedge funds on Monday this week...?"
"BEAR STEARNS Investors Await Tally on Losses," said the Wall Street Journal two weeks ago. The two-week deadline, set by America 's fifth-largest securities firm itself in an email to investors, came and went yesterday.
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Tuesday, July 17, 2007
Bank of England’s Rate Raising Cycle Is Far From Over! / Interest-Rates / UK Interest Rates
By: Mario_Innecco
Today we saw the O.N.S. (Office of National Statistics) release the C.P.I. and the R.P.I. for the month of June. The C.P.I. or the consumer price index came out at a 2.4% year on year rate and actually dropped from 2.5% in May but the financial markets were expecting a drop to 2.3%, while the R.P.I. or the retail price index came out at 4.4% year on year which was on the back of an expected decrease from 4.3% to 4.2%.Read full article... Read full article...
Tuesday, July 17, 2007
US Bond Market and Interest Rates Quarterly Review and Outlook - Second Quarter 2007 / Interest-Rates / US Bonds
By: John_Mauldin
This week in Outside the Box, we take a closer look at the bond market and its underlying drivers. HMIC's Van Hoisington and Dr. Lacy Hunt anticipate lower inflationary pressures on account of faltering consumer spending and further deterioration in the housing market.Read full article... Read full article...
Friday, July 13, 2007
When Bad Debts Attack - Japan a Warning to the US Fed / Interest-Rates / Credit Crunch
By: Adrian_Ash
"...Memo to the US Fed: When the Dollar collapse comes, you might not get chance to even give money away..."
BEN BERNANKE has his helicopter. John Maynard Keynes had old bottles buried in coal mines.
And the Japanese government? How can Tokyo dish out free money and put an end to deflation, that horror of falling prices and wages?
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Friday, July 13, 2007
Bond Market - Time to Face the Music / Interest-Rates / US Bonds
By: Peter_Schiff
This week, bond rating agencies Moody's and Standard & Poor's finally announced downgrades on billions of dollars of bonds backed by subprime mortgages. Though the cuts will certainly not reflect the full weakness of the bonds, and will not include nearly as many issues as they should, they nevertheless amount to the beginning of the end of the phony mortgage investment market and the unrealistically high home prices that it helped support.Read full article... Read full article...
Thursday, July 12, 2007
Hyperinflation and the Bond Markets / Interest-Rates / US Bonds
By: David_Shvartsman
Here's one for all you economic philosophers and "bond market vigilante"-types. The question I'm currently turning over in my mind is this: can the U.S. experience hyperinflation, or will the possibility of such an extreme inflationary spiral be held in check by the bond markets?The current thinking on the possibility of the United States experiencing hyperinflation seems to be split between those who say it can (and likely will at some point in the future), and those who feel it cannot, for precisely the reason stated above.
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Thursday, July 12, 2007
CDO - Compound Damage Orgy / Interest-Rates / US Bonds
By: Jim_Willie_CB
Collateralized Debt Obligations are the CDO bonds under fire, soon to suffer huge losses, subject of debt downgrades, object of failed auctions. We are talking about hundreds of billion$ in bond losses. A vicious circle has begun, sure to continue for a length of time ten times greater than what is expected, like into 2010. Home values are on the decline, the basis collateral for such asset-backed bonds, some of which hold car loan portfolios also in trouble. Homeowner defaults are on the decline, the basis income for such asset-backed bonds. The foreclosure process will aggravate the already swollen supply of homes. Hedge fund collapse will aggravate the already shaky supply of CDO & mortgage bonds. This is a worst case scenario unfolding on a horrific scale.Read full article... Read full article...
Tuesday, July 10, 2007
The Dash for Cash Goes Global / Interest-Rates / Global Financial System
By: Adrian_Ash
"...How much intangible debt now needs to be squeezed into how much real money...?"
IS THIS WHAT a credit crunch feels like on the ground? Way behind the curve of my own domestic finances as ever, I've been trying to raise a fresh mortgage on my house – well, for around half of its outstanding value, at least.
In fact, I'm just one of 750,000 borrowers in the United Kingdom about to come out of a two-year fixed deal to find interest rates have risen from 4.50% to 5.75% since late 2005 – and all of the lenders I've approached just raised their rates.
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Sunday, July 08, 2007
Interest Rate Rises - Bank of England Today, European Central Bank in September? / Interest-Rates / ECB Interest Rates
By: Paul_L_Kasriel
As widely expected, the Bank of England (BOE) raised its policy rate by 25 basis points to 5.75% this week. This represents a cumulative increase of 125 basis points in a year's time. Although the European Central Bank (ECB) held its policy rate steady at 4.00%, its president, Claude Trichet, hinted that there would be more rate increases in the not-too-distant future.Read full article... Read full article...
Saturday, July 07, 2007
Where is the Real Risk in the Subprime Debacle? / Interest-Rates / Credit Crunch
By: John_Mauldin
In this issue:
Honey, I Bet the Farm
Five Cents on the Dollar
Not Your Mother's AAA
Five Cents on the Dollar
Credit Default Swaps? Who Is the Counter-Party?
So, Where's the Problem?
La Jolla, London, and Denmark
This week we continue to look at an alphabet soup of problems: RMBSs, CDOs, Alt-A, BBB and - a new acronym to put on your radar screen - the very useful CDS. When does an AAA rating not mean an offering is ready for prime time? What type of contagion are we seeing from the Bear Stearns blow-up? I survey my friends in the hedge funds space, trying to find some evidence of cracks in the foundation, and let you know what I hear. We will again look at a wide variety of items and see if we can discern some connections.
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Thursday, July 05, 2007
Garbage Bonds and Bonfires / Interest-Rates / US Bonds
By: Jim_Willie_CB
HOLIDAY
In keeping with the Independence Day holiday, a preface is offered. The irony is stiff as a board, as thick as a fog, as ugly as a pig. Citizens in the Untied States have never seen such a broad, deep, palpable threat to their liberty, this time from within, in terms of the system and its leadership. Dependence, the opposite of the celebrated theme, is running strong. The corporate agenda takes a one-day holiday. Refer to waging war, deceiving the masses, selling out the Middle Class, undermining the institutions, and rendering any threat to systemic reform as anti-business or unpatriotic.
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Wednesday, July 04, 2007
UK Interest Rates To Rise to 5.75 percent as a Consequence of Excessive Expansion of Money Supply / Interest-Rates / UK Interest Rates
By: Nadeem_Walayat
The Bank of England is expected to raise UK interest rates tomorrow from 5.50% to 5.75%. This is inline with the Market Oracle two year forecast for UK interest rates to hit 5.75% by Sept 07.
The Money Markets are pricing in a rise in UK interest rates, with the Pound hitting a new 26 year high against the US Dollar trading towards $2.02, and the 3 month Inter bank rate rallying to a near 6 year high of 5.96%.
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Friday, June 29, 2007
Absolute Bond Contagion to Hit Financial Markets / Interest-Rates / US Bonds
By: Jim_Willie_CB
When the contagion (denied no longer) is systemic, pervasive, broad, multi-faceted, and ominous in its lethal potential, perhaps one can calmly conclude that the system is merely adjusting to a total change in the seas. NO WAY !!! Without much doubt whatsoever, Bear Stearns is GROUND ZERO for the bond market firestorm.
BS was forced to extend $3.2 billion in loans to its hedge fund clients, who attempted to liquidate but could not. That represents 25% of the BS entire capital. Don't worry. Both hedge funds will eventually die, but when they do, BS will possibly die with them. A few months time is all they bought. Call it a STAY OF EXECUTION in legal parlance.
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Monday, June 25, 2007
Will The US Bond Market Break The Camel's Back? / Interest-Rates / US Bonds
By: Clif_Droke
“Bond shockwaves to ripple through U.S.” was the big, bold headline that greeted readers of the Financial Times newspaper following the recent bond sell-off and corresponding rise in yields. “A sell-off in the financial markets this week could have serious implications for the whole economy, says Krishna Guha.” Pretty dramatic stuff to say the least. But that's to be expected as the news media uses the latest financial “crisis of the week” to scare the average investor into believing financial collapse is imminent.Read full article... Read full article...