Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Thursday, February 17, 2011
The Fed is Wrong – Inflation Has Arrived! / Interest-Rates / Inflation
By: Sy_Harding
Fed Chairman Bernanke says inflation is still benign and not a concern. He’s wrong! And he’s behind the curve, dangerously so!
Inflationary pressures have been rising and recognized in many major global economies for quite some time, which has had their central banks raising interest rates and tightening monetary policies in efforts to bring rising prices under control. So far without effect, thanks to the intensity of the inflationary pressures.
Wednesday, February 16, 2011
U.S. Bond Market Failure as China and Russia Join PIMCO in Selling U.S. Treasury / Interest-Rates / US Bonds
By: Justin_John
The 10 year yield is waiting like dynamite with fuse lit, ready to blow the top off. 10 year yield are holding at 3.6% and any clean break of 3.7% will see 5.3% as the next target literally killing the recovery and taking down equities with it for the next 10 years.
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Tuesday, February 15, 2011
Why Increasing Bank Credit Can Only End in Catastrophe / Interest-Rates / Inflation
By: Richard_Daughty
I have to admit that I was stunned that Fed Credit (the magical fairy dust from which money appears out of thin air) two weeks ago went up by a huge $19 billion, which the Fed itself used to buy $18.4 billion in government debt. In one week! In One Freaking Week (OFW)!!
As Eric Fry, Editorial Director of The Daily Reckoning, puts it, "The effect of this bizarre transaction is that one branch of the government issues debt securities, while another branch of the government purchases those securities"!!!
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Sunday, February 13, 2011
Modern Monetary Theory Part II: Money and The Limits of Empire / Interest-Rates / Quantitative Easing
By: Jesse
The limit of the Fed's and Treasury's ability to create money is the value and acceptance of the dollar and the bond in market transactions.The Weimar government never 'ran out of money.' Zimbabwe never 'ran out of money.' And if interest is paid 'in your currency money' you can never fail to service your debt either.
Sunday, February 13, 2011
China Syndrome Debt Bubbleomics And Crude Oil / Interest-Rates / US Debt
By: Andrew_Butter
Along with the emergence of the much heralded “Green Shoots” that must by now be turning into roses (?), has come the sinking realization that (a) just piling debt on debt is not a long-term solution to anything, and that (b) perhaps there might have been more “wrong” under the blanket of mark to market (when markets were in a bubble), and mark to fantasy when they crashed, than can be swept under the carpet forever; like perhaps something structural?
Sunday, February 13, 2011
Modern Monetary Theory: The Sophistry of the US Dollar and Debt Monetization / Interest-Rates / Quantitative Easing
By: Jesse
soph·is·try (s f -str ). n. pl. soph·is·tries. 1. Plausible but fallacious argumentation. 2. A plausible but misleading or fallacious argument.
This is a very well written and important piece by Mr. Cullen Roche at his site Pragmatic Capitalism. It does a good job of capturing the essence of modern monetary theory that I like to think of as post-Nixonian fiat, gaining its realization and fruition in Reaganomics and the Greenspan Fed.
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Saturday, February 12, 2011
The Future Public Debt Trajectory, Projections and Drastic Measures / Interest-Rates / Global Debt Crisis
By: John_Mauldin
A Bit of Background
Drastic Measures
The Future Public Debt Trajectory
Debt Projections
This week I find myself in Bangkok, and I must admit to enjoying the experience a great deal, so much so that I am going to preview a portion of my coming book, Endgame, so that I can go back out and play tourist. Next week I get back to my more or less regular schedule, but I think you will enjoy this first portion of chapter six, where we look at an important paper from the Bank of International Settlements on “The Future of Public Debt.” It is not a pretty one. We are watching one of the last great bubbles begin to deflate – the bubble of government and government debt – all over the developed world. This is a serious weight that will be a drag on our growth, and it is interesting to contemplate as I sit in Bangkok, a city that is vibrant and teeming with opportunity.
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Saturday, February 12, 2011
U.S. Treasury Yield Curve Starts to Decline / Interest-Rates / US Interest Rates
By: Donald_W_Dony
After three years of progressive climbing, the U.S. Yield curve is now starting to decline. Yield curves start to fall when short term bond yields rise at a faster pace then long bond yields. This event typically occurs in the first or second year of a bull market.
The economic factors that drive this movement (declining yield curve) can vary from one cycle to the next but the implications are normally the same. They represent growing economic strength.
Friday, February 11, 2011
How to Profit from Rising Interest Rates / Interest-Rates / US Interest Rates
By: Terry_Coxon
Terry Coxon, The Casey Report writes: In the fall of 2008, the Federal Reserve responded to the Lehman bankruptcy by igniting a rapid expansion in the U.S. money supply. It did so because, by its lights, the immediate and obvious menace to the economy was a deflationary collapse, with one giant bankruptcy breeding another. And it went about the task without compromise; the monetary base more than doubled in less than a year, and the public's M1 money supply (checkable deposits plus hand-to-hand currency) jumped by 20%.
Friday, February 11, 2011
U.S. Treasury Bonds Set to Rally / Interest-Rates / US Bonds
By: Joseph_Russo
When planning trips or special events, it is wise to check the weather forecast to make certain that conditions are expected to be suitable for those plans.
Likewise, when planning investments or shorter-term trades, it is also prudent to gain access to a reliable market forecast that is suitable to ones interests, timeframes, and objectives.&
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Friday, February 11, 2011
What Dissension in the Fed's Ranks Means / Interest-Rates / US Interest Rates
By: Mike_Larson
A remarkable thing happened this week. Truly remarkable. But just in case it got lost amid the Egyptian chaos … coverage of the subzero temperatures up north … or the after-analysis of the Super Bowl, I’m going to shout it from the rooftops for you:
A couple of Federal Reserve officials actually stood up and said “Enough is enough!”
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Friday, February 11, 2011
Investors Protect Yourself From the Looming U.S. Muni Bond Market Storm / Interest-Rates / US Bonds
By: Money_Morning
Shah Gilani writes: Let's make one thing perfectly clear: Wall Street analyst Meredith Whitney is not crying wolf. Whitney - who gained fame for correctly predicting the U.S. banking implosion that presaged a global credit crisis - is now warning us about defaults in the $2.9 trillion municipal bond market.
Whitney is being savaged for this latest prognostication, mostly by institutional money managers who resent the way that she's roiled the traditionally sleepy "muni" market.
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Thursday, February 10, 2011
The Euro Dollar Market and Financial Crises / Interest-Rates / US Bonds
By: Christopher_Quigley
Eurodollars are time deposits denominated in U.S. dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve. Consequently, such deposits are subject to much less regulation than similar deposits within the U.S., allowing for higher margins. The term was originally coined for U.S. dollars in European banks, but it expanded over the years to its present definition: a U.S. dollar-denominated deposit in Tokyo or Beijing would be likewise deemed a Eurodollar deposit. There is no connection with the euro currency or the euro zone. The first Eurodollars were created by deposits made by the Moscow Narodny bank in 1957 to its branch in London to protect Russian State foreign reserves during the cold war.
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Thursday, February 10, 2011
Fed Dual Mandates, the Price of Gold, and Tinfoil Hats / Interest-Rates / Central Banks
By: Mike_Shedlock
As noted in Republicans Attack Dual Mandate, a group of Republicans want to remove the Fed’s employment mandate and have the Fed focus solely on keeping prices stable.
This got me thinking once again about dual or triple mandates, and also the price of gold.
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Thursday, February 10, 2011
Insights from Q&A of Bernanke’s Testimony / Interest-Rates / US Interest Rates
By: Paul_L_Kasriel
Chairman Bernanke's testimony today was a repetition of the February 3, 2011 speech at the National Press Club. He stressed that the unemployment rate was unacceptably high and inflation was low. In Q&A session, Representative Ryan questioned Chairman Bernanke about whether the Fed is monetizing debt. Bernanke explained that "debt monetization" stands for a permanent change in money supply to finance the debt. He went on to add that the Fed plans to reverse course, thus it is not debt monetization. Money supply grew 4.2% from a year ago during the week ended January 24 (see Chart 1), which is hardly indicative of impending inflationary pressures.