Free Republic

...One other factor that could lift bond prices is that Treasury could be forced to stop selling new bonds, which would limit the supply available for investors. Limiting supply typically helps to lift prices. Thursday's auction of 7-year Treasuries came in with a yield of 2.25%, the lowest rate Treasury has had to pay for notes of that term since last November.

Failure to raise the Federal debt ceiling limit could "roil the financial markets and cause severe economic problems," "cause profound damage to our country," and have “dire consequences.” So wrote the Los Angeles Times, Washington Post, and New York Times. But the year was 1995, not 2011. Other ills predicted during that contentious debate were rising unemployment, reduced GDP growth, and soaring interest rates. That was at a time when President Clinton and Democrats were fighting off attempts by Republicans to link cutting the deficit to the increase in the debt ceiling and a continuing resolution on spending. Then as...

The $1 Billion Armageddon Trade Placed Against The United States Bond Market Interest-Rates / US Bonds Jul 25, 2011 By: Money Morning Jack Barnes writes : Someone dropped a bomb on the bond market Thursday - a $1 billion Armageddon trade betting the United States will lose its AAA credit rating. In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world. The massive trade wasn't placed in bonds themselves; it was placed in the futures market. The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03...

The Federal Reserve is unlikely to change monetary policy for years as the economy remains mired in an extended period of slow growth, Pimco's Bill Gross told CNBC. As Fed Chairman Ben Bernanke prepares his much-awaited Humphrey Hawkins speech, the co-CEO of the world's largest bond manager said he sees no end in sight to the central bank's policy of sub-zero real interest rates. "What Bernanke should explain in terms of his language is it's really going to be a long, long time from which the Fed deserts its 25 basis points Fed funds target," Gross said. "That means perhaps...

Some pundits and lots of the media are pointing to the fact that manufacturing is hiring again. Those media and pundits are feeding us more junk...the most successful of the auto makers is Ford ...At $85 Billion for 67,000 rehires, that is more than $ 1 million per rehire for the auto bailouts at GM and Chrysler. More than $1 million per rehired worker is a horrible return on investment! ...And the costs for Obama’s programs continue to rise. ...Some argue that Obama inherited this situation. Did he? He was part of Congress from 2005 to 2009. He was part...

How To Keep A Damaged Financial And Economic System Afloat? Interest-Rates / Credit Crisis 2011 May 15, 2011 - 12:38 PM By: Bob Chapman The elitists who run America from behind the scenes have serious problems in trying to keep a badly damaged financial and economic system afloat. Ironically, these same characters are the ones responsible for the system and the condition that it is in today. It is not only confined to the US, but it prevails in England, Europe and other countries as well. Central bankers are all in constant touch with each other to employ tactics that...

...Money managers now expect interest rates to increase as the Fed has to deal with the inflation from increasing food and energy prices that are not in the CPI. And money managers expect taxes to be increased to pay for government programs, which will suck money out of the economy. What will increased interest rates and taxes do to home values, to stock values, to bond values and to jobs? They will all fall. George Soros, bankers, insurance companies and Wall Street who all gave lots of money to Obama, will all make lots of money again by selling assets...

Have the sharks lured you back into the investment water? Well, you are about to lose everything again, like in 2009 – and Obama is letting the sharks do it because they gave him lots of money. And who are those sharks? George Soros, executives of Goldman Sachs, Fed Chairman Ben Bernanke, bankers, insurance companies and Wall Street. Let's look at these things: inflation, GDP, unemployment, housing, oil and taxes... ... Money managers are now moving lots of money into cash and treasuries from stocks and bonds. Why? Low interest rates have been driving up the values of stocks and...

Gold futures settled at a record Wednesday, getting a boost after the Federal Reserve kept its key interest rate at an historic low range and said rates will likely stay low for an “extended period.” The Federal Reserve’s Federal Open Market Committee on Wednesday left its key interest rate at an historic low range of 0% to 0.25% and said its $600 billion bond-buying program would end as scheduled on June 30. The decisions were widely expected. Read more about the Fed decision. “The continued wording of exceptionally low rates for an extended period says it all,” Keith Springer, president...

65 Ways That Everything That You Think That You Own Is Being Systematically Taken Away From YouApril 12, 2011 Everything that you own is slowly being taken away from you. It is being done purposely and it is being done by design. Many Americans like to think of themselves as "well off", but as will be demonstrated below, we don't "own" nearly as much as we think that we do. The truth is that most of us have to frantically run around accumulating wealth as rapidly as we can so that we can somehow stay ahead of the rate that...

U.S. Will Default On Its Debt Interest-Rates / US Debt Apr 04, 2011 - 04:13 PM By: DailyWealth Dr. Steve Sjuggerud writes: "I am confident that this country will default on its debt," Bill Gross wrote this week. Bill Gross is not some anti-American crackpot... quite the contrary. He manages the world's biggest bond fund. As the founder and chief investment officer of PIMCO, he's responsible for over $1.2 trillion in assets – mostly in bonds. And last month, in his main bond fund, he got rid of all of his U.S. government bonds. "[I've] been selling Treasurys because they...

Pimco Dumps All U.S. Treasury Bonds, Six Reasons Why They Got it Wrong Interest-Rates / US Bonds Mar 10, 2011 - 12:43 PM By: Mike Shedlock Pimco's Bill Gross has been dumping US government debt in favor of other alternatives including emerging-market opportunities. Looking ahead, I think it's more likely to be a bullish setup for treasuries than not. First, please consider the news. Bloomberg reports Pimco’s Gross Eliminates Government Debt From Total Return Fund Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., eliminated government-related debt from his flagship fund last month as the...

The signs of currency devaluation are all around us. Yesterday (Feb. 4th) commodities surged. Gold surged too. Are we really supposed to believe there is that much extra demand for commodities and gold, or their supply that restricted, that prices have been positively skyrocketing these last few months? Of course not. What has been happening is a devaluation in the underlying currency these commodities are priced in, the US Dollar. Currency depreciation can be tough to spot in an environment such as the current one, as most people will look for currencies to appreciate vs other currencies. What they are...

There is an old adage on Wall Street: no one rings a bell to signal a market top or bottom. Yet, I have found that bells do ring; it’s just that few people know exactly what sound to listen for. Perhaps the biggest and most liquid of all markets is for US government bonds. That market has been rallying for almost thirty years. The bull can be traced back to 1981, when Treasury bond yields peaked at about 15%. At that time, high inflation and a weakening dollar had justifiably squelched demand for Treasuries. Even the ultra-high interest rates were...

As the yield on the 10-year Treasury hits a six month high, you can almost hear all the doors slamming over in refi land. While you'd think most borrowers had already refinanced their loans to take advantage of the recent record-low interest rates, many have actually not, and their opportunity is fast falling. Refinance applications have fallen steadily since the first week in October, as mortgage rates began to rise. Now a $500 billion block of loans has become "clearly not refinanceable" according to Deutsche Bank. "The mortgage rate for a high concentration of 30-year borrowers clusters just below 5.00...

<p>Federal Reserve Chairman Ben Bernanke this Sunday will make his second appearance on 60 Minutes, defending the central bank's controversial $600 billion bond buying program.</p> <p>And he doesn't rule out the possibility that more could be on the way.</p> <p>"He explains why the Fed announced its intention to buy $600 billion in Treasury securities, defending against charges the move will lead to inflation and not ruling out the purchase of more," CBS said Friday.</p>

Round two of the economic crime of the century has begun. On January 12, Lawrence Summers, President Obama's designee to become director of his National Economic Council, sent a letter to congressional majority and minority leaders seeking the second half of the $750 billion approved by Congress last October.   Citing Obama's economic speech of January 8, Summers wrote: "As the President-elect recently stated, 'we start 2009 in the midst of a crisis unlike any other we have seen in our lifetime.'" As you no doubt recall, last September Congress, fearing the wrath of constituents, rejected a bailout scheme put together...

The Fed Underwrites Asset Explosion By Frederick Sheehan 10/30/10 North Weymouth, Massachusetts “That the economists…can explain neither prices nor the rate of interest nor even agree what money is reminds us that we are dealing with belief not science.” – James Buchan, Frozen Desire (1997) The Federal Reserve is in disarray. Unsure of whether its QE2 strategy (quantitative easing – second round) should be tabled (see speeches of Thomas Hoenig, president of the Kansas City Federal Reserve Bank) or if it should pump $10 trillion into the economy (the unsolicited advice from economic columnist Paul Krugman), the New York Federal...

Here's What It Means That The Interest Rate Was Negative On The TIPS Auction Today Gregory White Oct. 25, 2010, 2:53 PM Image: AP Today's TIPS auction came in negative for the first time ever, with 5-year TIPS yielding negative 0.55%. TIPS are Treasury Inflation Protected Securities. The idea is you buy this version of a Treasury and it is hedged against inflation, with the CPI as the judge. It would seem that a negative TIPS number means deflation in the short term. But that's not quite true. What it means is that investors are betting the principal paid out...

China’s central bank unexpectedly announced Tuesday that it would raise interest rates for the first time in nearly three years, apparently in the hopes of dampening inflation and cooling off this country’s hot property market. The move had an immediate effect on markets worldwide, sending stocks lower on exchanges in Europe and the United States as investors weighed the effect on China’s continued economic growth and its ability to serve as an engine for a global recovery. The major Wall Street stock indexes were down sharply. Oil prices, also sensitive to the world economic outlook, fell by more than 2...