bonds - What We're Reading

More On Why Raising Rates Matters

Posted by StockBuz on May 30, 2013 at 9:30am

It's not just about big business being able to borrow and refinance debt at low (ZIRP) rates. It also impacts home buying affordability, consumer spending, higher chargecard APRs for the little guy who can barely afford it and yes, yield for the big dogs. From an investment standpoint, large investors will pay attention. As an example the 10 year yield is now at 2.15. Yesterday, it crossed the dividend yield of the S&P 500. This means it is now more profitable to buy bonds than to invest in the stock market. An interesting perspective. Check it out at MrTopStep

The Cost of Robbing Peter To Pay Paul

Posted by StockBuz on March 18, 2013 at 10:00am

Reprinted from http://mauldineconomics.com

Would the Real Peter and Paul Please Stand Up?

By Dylan Grice

In a previous life as a London-based ‘global strategist’ (I was never sure what that was) I was known as someone who was worried by QE and more generally, about the willingness of our central bankers to play games with something which I didn’t think they fully understand: money. This may be a strange, even presumptuous thing to say. Surely of all people, one thing central bankers understand is money?

They certainly should understand money. They print it, lend it, borrow it, conjure it. They control the price of it... But so what? What should be true is not necessarily what is true, and in the topsy-turvy world of finance and economics, it rarely is. So file the following under “strange but true”: our best and brightest economists have very little understanding of economics. Take the current malaise as prima facie evidence.

Let me illustrate. Of the many elemental flaws in macro

The Long Bond: How Low Can It Go?

Posted by StockBuz on December 17, 2011 at 8:54pm

This originally posted by Carl Swenlin from DecisionPoint via StockChart.com [see link below]

LONG-BOND YIELD: HOW LOW CAN IT GO?

The 30-year bond yield has dropped below three percent many times this year, dropping as low as 2.694% in October. It has been trending up since then, but today it looks as if the October low could be retested.

On the daily bar chart below we can see that the rising bottoms line has been penetrated at the time this intraday snapshot was taken. This is not a decisive break, but it is a logical one, since the triangle formation is a continuation pattern, and a continuation of the larger down trend should be expected.

To determine if the October low has historical credibility as long-term support, let's look at monthly chart going back to 1943. As we can see, the long-term support is just above 2%. Hoisington Investment Management Company in their Third Quarter 2011, Quarterly Review and Outlook stated, "In view of the United States extreme over-indebtedne

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