Bonds & Interest Rates

How to Drink from a Firehose

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Posted by John Mauldin - Mauldin EconomicsMauldin Economics

on Monday, 15 May 2017 07:20

Rosengren & Carney
Draghi Heckled
Treasury Hat Trick
Stop Drinking Now
A Brief Commercial
Orlando, Washington DC, St. Thomas, and SIC 2017

Basic economics tells us all resources are scarce, but our demand for them is not. Hence we need methods to allocate the limited supply of each resource. A significant part of economics is the study of those methods.

One exception to the rule, though, has developed in the last few years: The amount of information available to us is practically unlimited. Open your internet browser, and most of that information is just a few clicks way. But if media industry profits (or lack of them) are any indication, demand for that information is anything but infinite.

One problem with information is that much of it is biased. I know, for instance, that when I read a certain economist commenting on recent data, he is going to put a spin on it that reflects the particular economic soapbox he prefers to stand upon. And while I will occasionally take time to read such people, just to kind of keep up on “influencers,” they often don’t really add much to the conversation.

Then there are those who are always delivering fascinating surprises. They do enormously deep dives into arcane data and tease out insights of real importance – connections to other ideas or solutions to challenging problems – they come up with new and different way of looking at the world. I don’t know what you call them, but “seekers of truth” is how I label them. They are just as curious as I am about how the Grand Puzzle all fits together, and they are describing the pieces as viewed from the another side of the table. I value these thinkers. (Sitting here thinking about it, I realize that I need to put a list together of some of my best resources. Some of them are expensive to access; but, surprisingly, more and more of them are either cheap or free. I will get around to that project and make it available to you one day.)

Back to the main plot line. What is scarce isn’t information itself (we’re all nearly drowning in it) but the ability to process it into something useful. All of us, including me, are still figuring out that part. And the creation of really valuable information takes time. I have had a vivid demonstration of that fact myself these last few weeks as I try to launch a new business andprepare for the upcoming Strategic Investment Conference. You cannot believe how much personal preparation goes into talking with every one of the speakers and figuring out how to blend their ideas so that something coherent emerges from our shared experiences at the conference.

And then there are the challenges of keeping up with my regular writing and research andputting in the many hours it takes to be a dad and granddad, always in the middle of a crisis or two. Life is what actually happens after you make careful plans.


My own particular approach to drinking from the enormous information firehose has a couple of key features.


Bonds & Interest Rates

Treasury Snapshot: Possible Reversal Continues

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Posted by Jill Mislinski - Advisor Perspectives

on Friday, 12 May 2017 07:26


Let's take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended the day at 2.39% and the 30-year bond closed at 3.02%, well off their interim highs.

Here is a table showing the yields highs and lows and the FFR since 2007 as of today's close.

The 2-10 yield spread is now at 1.06%.

The chart below shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since the pre-recession days of equity market peaks in 2007.


....continue reading HERE

Bonds & Interest Rates

Shocker: Next Sovereign Debt Crisis Four Times Worse

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Posted by Martin D. Weiss PH.D

on Wednesday, 10 May 2017 07:51

debt-crises-1024x507Many people don’t recognize the true value of an individual’s contribution to society until he or she is gone.

That’s not quite the case with our colleague, Larry Edelson. He did have a large, loyal following before he passed away. But it still applies to him in this sense: The Edelson Institute he founded now has an even larger group of devoted fans than he had.

I’m among them. And as I dig more deeply into his big-picture forecasts, I uncover even stronger evidence that supports them.

A classic example: Larry’s prediction of the coming sovereign debt crisis. Repeatedly and consistently, he told us how it would strike in three distinct phases — first hitting the European Union, then Japan, and finally the United States.

He explained how it would corrode society, corrupt politics, and raise the risk of war. Plus, he predicted what’s widely known today as the global money tsunami, the tidal wave of flight capital flowing into U.S. markets.

Now, the Edelson scenario is unfolding in aces and spades. 


Bonds & Interest Rates

Debt is Financial Life – Nonsense!

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Posted by Gary Christenson - The Deviant Investor

on Thursday, 04 May 2017 07:46

Examine the picture below. The global economy thrives on debt and credit. We purchase essential products using debt/credit. The U.S. dollar bill is a debt of the Federal Reserve. All debt based assets have counter-party risk.

The St. Louis Federal Reserve publishes data on “Total Debt Securities” in $ millions. Note the rapid rise since 1971 after President Nixon encouraged rapid devaluation of the dollar.


Yes, the total U.S. increases debt rapidly – about 9% per year on average since 1971. A graph of U.S. national debt looks similar and shows about the same rate of increase.

Gold bullion and coins are NOT debt and have no counter-party risk, in contrast to debt based assets. But who cares about gold?


  • Central banks profess little interest in gold, although they own a substantial quantity.
  • Wall Street makes little profit from gold – no interest there.
  • The middle class struggles to pay debts and shows little awareness of gold. (A change in attitude is coming!)


How does increasing debt affect us?


Bonds & Interest Rates

Panic Bank Run Leaves Canada's Largest Alternative Mortgage Lender On Edge Of Collapse

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Posted by Zerohedge

on Monday, 01 May 2017 07:59

After two years of recurring warnings (both on this website and elsewhere) that Canada's largest alternative (i.e., non-bank) mortgage lender is fundamentally insolvent, kept alive only courtesy of the Canadian housing bubble which until last week had managed to lift all boats, Home Capital Group suffered a spectacular spectacular implosion last week when its stock price crashed by the most on record after HCG revealed that it had taken out an emergency $2 billion line of credit from an unnamed counterparty with an effective rate as high as 22.5%, indicative of a business model on the verge of collapse .

Or, as we put it, Canada just experienced its very own "New Century" moment.

HCG teaser 0

...read more HERE

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