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Bonds & Interest Rates

The Global War on Cash

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Posted by Visual Capitalist

on Wednesday, 18 January 2017 11:52

Screen Shot 2017-01-18 at 10.37.10 AM

All around the world, lawmakers are making an urgent push to eliminate the use of physical cash.

It's not only the recent demonetization in India - it's also the Western nations that want to eliminate big denomination bills, including the U.S. and Europe.

See who declared war - and who is going to get caught in the crossfire - in today's "can't miss" infographic for The Money Project.

Screen Shot 2017-01-18 at 10.36.14 AM

....also from Martin Armstrong:

The War on Cash – One Giant Leap Forward For Government



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Bonds & Interest Rates

The Yield Curve is Critical of Fed Credibility

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Posted by Michael Ashton - E-piphany

on Friday, 06 January 2017 07:01

I was planning to write an article today about the shape of the yield curve. Since the Global Financial Crisis, the Treasury curve has been very steep - in early 2010 the 2y/10y spread reached almost 300bps, which is not only unprecedented in absolute terms but especially in relative terms: a 300bp spread when 2-year yields are below 1% is much more significant than a 300bp spread when 2-year yields are at 10%.

43397 a

But what I had planned to write about was the phenomenon - well-known when I was a cub interest-rate strategist - that the yield curve steepens in rallies and flattens in selloffs. The chart below shows this tendency. The 5-year yield is on the left axis and inverted high-to-low. The 2y/10y spread is on the right axis. Note that there is substantial co-movement for the recession of the early 1990s, throughout the ensuing expansion (albeit with a general drift to lower yields), in the recession of the early 2000s, the ensuing expansion, and the lead-up to the GFC.



Read more...

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Bonds & Interest Rates

The 2017 Bond Strategy Backed By Goldman and BlackRock

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Posted by Brian Chappatta & John Gittelsohn

on Wednesday, 04 January 2017 09:05

  •  Unconstrained bond funds promise gains in any rate environment
  • $21 billion in redemptions show investors aren’t convinced yet

 

The 2017 Bond Strategy Backed By Goldman and BlackRock

For the world’s biggest bond managers, 2017 might just be the year that unconstrained funds finally live up to the hype.

Although the bond funds -- long marketed for their potential to shine in any environment -- have failed to deliver consistently over the years, bond managers are convinced they’re about to have something of a moment. Donald Trump’s election has reignited the prospects for inflation and growth both in the U.S. and abroad, which will likely lead to higher interest rates and spell the end of the bond market’s three-decade bull run.

-1x-1

...read more HERE



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Bonds & Interest Rates

Breakout Of 35-Year Downward Yield Range Will Blow-Up Interest Rate Derivatives ($500 Trillion+)

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Posted by Gijsbert Groenewegen via 321Gold.com

on Wednesday, 28 December 2016 07:56

gro122616-1Nothing makes sense anymore. The markets keep going up like it is going out of fashion Trump’s honeymoon period or not. Trump might be getting a strong cabinet around him and have good ideas to stimulate the economy…though you first have to spend money (increasing debt) before you make money, which takes time.

....continue reading HERE

 

...related from Martin Armstrong: 

Bewared of Bond Funds



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Bonds & Interest Rates

Beware of Bond Funds

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Posted by Martin Armstrong - Armstrong Economics

on Wednesday, 21 December 2016 08:21

50-War-Bond

We are entering a phase of rising interest rates, so bond funds will do poorly. We are not yet at a stage where U.S. government bonds would default or be swapped. Therefore, my recommendation has only to do with rising rates. What you should do is stay short-term, like 90-day paper or less, be it corporate or government. This is just an interest rate play moving into 2018.

As we move into 2018....continue reading HERE

....related: 

Treasury Bonds Are 'Contrarian' Mega Bullish



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