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The Fed-led Long Bond Rally That Never Was

Nico Isaac — Tue, 19 Jan 2010 03:45:00 ET

If aliens landed on earth today and asked, "Take Us to Your FINANCIAL Leader," the final destination would not be the White House. It'd be the Eccles Building, the famous headquarters of the Federal Reserve Board. The story goes that the Fed is the all-knowing, infinite-power wielding "OZ" of the U.S. economy. With the flip of its monetary-policy switch, the central bank can manipulate the course of any financial market in the direction of most benefit.

Interest Rates: Think Central Banks in Control? Think Again.

Vadim Pokhlebkin — Tue, 18 Aug 2009 10:45:00 ET

If you believe that central banks' "potent directors" carefully watch economic indicators and deftly adjust interest rates accordingly, this will come as a shock: Central banks are no more in control of interest rates than they are of the weather. Three examples prove this point.

Paper Trading Heroine

Jeff Reckseit — Thu, 30 Jul 2009 04:45:00 ET

Two art school students were in a bar throwing back shots and comparing their commodity trading spread sheets on their iPhones:

“I am getting so-o-o-o creamed in corn; I have no yen for getting pounded in the loonie; and my affair with silver is finished.”

“Tell me about it, dude. I got burned in coffee; I can’t concentrate on OJ; and I have no interest in 10-years. I yield. I give up.”

“Me too. Lucky we were only paper trading.”

High-Yield Debt: Is It Time To Fill Your Trunk With Junk?

Nico Isaac — Wed, 08 Jul 2009 05:45:00 ET

In case you haven't had your radios tuned to W-A-L-L Street, junk is now music to the ears of the financial mainstream. To wit: In the first half of 2009, high-yield bonds saw a whopping 28.6% return, completely erasing the 25% shortfall from last year. Also, an estimated $41 billion in corporate debt was issued, an 81% increase from 2008...

June 24 FOMC Meeting: Can the Fed Defeat the Bear?

Nico Isaac — Wed, 24 Jun 2009 03:45:00 ET

t's Federal Open Market Committee time again. And, even before the June 24 meeting adjourned, word-parsers were dissecting the "minutes" like a high school biology student with a frog. In short: While everyone with a pulse guesses at the meaning of Bernanke-speak, ALL of them hope his words give the stock market something to celebrate.

Prechter on T-Bonds, THEN and NOW

Robert Folsom — Tue, 16 Jun 2009 04:45:00 ET

That was in 2002. Jump ahead to 2008 and early 2009 -- we've seen the gargantuan size of the U.S. government's bailout schemes, and watched the Federal Reserve's unprecedented steps to keep interest rates low. Clearly the time had come for Prechter to focus again on government debt...

The Fed Does Not Lead the Bond Market, It FOLLOWS

Nico Isaac — Tue, 26 May 2009 02:45:00 ET

According to conventional economic wisdom, the Federal Reserve is to the U.S. bond market what a hypnotist is to his patient. A typical trance would induce the following behavior: "When you hear the words 'rate cut' or 'cash infusion,' you will proceed to act like a BULL and rally." In reality, however, the bond market completely ignores the "soothing" voice of the Central Bank. Then it does whatever the hooey it wants.

U.S. Bond Market Stays One Step A-"Fed"

Nico Isaac — Fri, 01 May 2009 06:15:00 ET

For all you obscure holiday buffs out there, today is the first Friday of May: International "No Pants Day." (Seriously, look it up) The annual event seems especially relevant seeing as the U.S. Federal Reserve has just been caught with its metaphorical trousers down...

The Story Told By Treasury Yields: Deflation

Nico Isaac — Mon, 06 Apr 2009 05:30:00 ET

As the year 2007 rolled into 2008, the mainstream financial experts were certain of one thing (if you don't count death and taxes): Inflation would take the U.S. economy by storm. The picture of Treasury Yields, however, foretold an entirely different story: Deflation.

T-Bills Are Telling You What The Media Won't

Robert Folsom — Tue, 09 Dec 2008 05:30:00 ET

Was the $32 billion supply of ZERO-YIELD securities available at today's Treasury auction enough to meet the demand?