Bloomberg.com – A Low-Yield Bond World Everyone Loved to Hate Is Ending in Tears Remember when everyone in the bond market bemoaned living in a low-volatility, low-yield world? Those days are ending. Prices are swinging more than they have on average during the past few years and there’s yield to be had if you have… Continue reading The End Of The Low-Bond Yield World?
The Telegraph – To save itself, Greece must exit the euro A Syriza election victory threatens default and disorderly exit from the euro for Greece. This would be a disaster for all. But done properly, the reintroduction of sovereign currencies within the eurozone would provide a bright new beginning Of all the instabilities that concern… Continue reading Why Greece Must Exit The Euro
Bloomberg.com – Speed Trader Study Shows Treasuries Hurt When Breaking News Hits High-frequency trading in the U.S. Treasury market makes it harder for investors to buy and sell bonds when news events cause prices to move, according to the Bank of Canada. Researchers studied how liquidity changed as algorithmic-trading programs, which are much faster than… Continue reading HFT And Bonds
Bloomberg – Fed Seen Looking Past Low Inflation to Drop ‘Considerable Time’ The Federal Open Market Committee, which meets today and tomorrow in Washington, will adopt a word such as “patient” to describe its approach to policy, according to 68 percent of 56 economists surveyed by Bloomberg late last week. Only 23 percent said the… Continue reading More On The “Considerable Time” Debate And Whether Or Not The Fed Pulls A “Bullard”
<Click on chart for larger image> Comment Since the financial crisis everyone has been looking for bubbles in financial markets. A popular place to look for one is in the bond market (interest rates). To-date the huge rise in rates expected by many economists has not happened. However, almost no one looked for a bubble… Continue reading Recent Crude Oil Forecasts
Reuters – Bundesbank sceptical of quantitative easing even if inflation falls below zero Having largely exhausted its policy toolkit with the key interest rate at a record lows of 0.05 percent, broad-based purchases of sovereign bonds – also known as quantitative easing (QE) – are seen as the ECB’s last resort to revive the economy.… Continue reading Are We Sure ECB QE Is Coming?
The Financial Times – Steven Major: Time to leave the German Bund party At a time when there is a widespread expectation that the European Central Bank will soon launch its version of “quantitative easing”, it might seem counterintuitive to suggest selling German Bunds. But we take the view that the balance of risk and… Continue reading More Bond Bearishness, Worldwide Edition
<Click on graphic for larger image> Business Insider – EL-ERIAN: Here’s The Sad Reality Of Russia’s Dramatic Midnight Central Bank Rate Hike Here is a sad reality if you are a Russian trying to cope with an economic recession and a currency implosion; (and it is something that is having a broader impact on many… Continue reading Russia’s Carnage
Comment We will have our Treasury International Capital Report out later today. Bloomberg – China’s Treasury Holdings Fall to Lowest Since February 2013 China’s holdings of U.S. Treasuries fell to a 20-month low in October, as yuan appreciation indicated less of an impetus to buy the government securities. China held $1.25 trillion in U.S. debt… Continue reading Foreign Holdings Of Treasuries
Comment This was last week’s Barron’s cover story: December 8, 2014 <Click on graphic to go to that issue> Comment Since this cover came out: The S&P’s decline from its high is more than 5% as of this writing The S&P erased 3 weeks of back-to-back gains for first time since Oct 07 The S&P… Continue reading Why Contrarians Look At Covers
Forbes – Marty Fridson: How Good Are Credit Ratings? “How good are the ratings?” I frequently get asked this question by investors who are not experts in bonds but have heard criticism of the credit opinions of Moody’s, Standard & Poor’s, and Fitch Ratings. Most recently, the rating agencies came under attack for their performance… Continue reading A Nice Word About Credit Rating Agencies