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Bonds & Interest Rates
The Markets Versus The Fed PDF Print E-mail
Written by Lance Roberts - The X-Factor Report   
Sunday, 22 June 2014 22:01

 

This past week the Janet Yellen, and her band of merry men, concluded their two day FOMC meeting with little surprise or fanfare.  For the most part, there were few changes to the overall tone of the press conference as the Fed revised down its forecast for economic growth and nudged up their projections for short-term interest rates.

Here are some of the more important highlights
from the Fed statement:

  • “Information received since the Federal Open Market Committee met in April indicates that growth in economic activity has rebounded in recent months.”
  • “Labor market indicators generally showed further improvement. The unemployment rate, though lower, remains elevated.”
  • “Inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.”
  • “The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually, moving toward those the Committee judges consistent with its dual mandate.”
  • “The Committee sees the risks to the outlook for the economy and the labor market as nearly balanced. “
  • “The Committee decided to make a further measured reduction in the pace of its asset purchases. Beginning in July, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $15 billion per month rather than $20 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $20 billion per month rather than $25 billion per month.”

The markets primarily expected as much.  However, as shown in the next chart, with the economy “struggling” in the first quarter, the overriding “fear” by market participants has been the extraction of “accommodation” from the markets.

SP500-Chart1-062114

As you can see, Yellen managed to assuage those fears by stating:

.....read what Yellen had to say & more HERE

 

 

 

 

 

ere

 

 
M. Armstrong: Sovereign Debt Crisis Beginning PDF Print E-mail
Written by Martin Armstrong - Armstrong Economics   
Thursday, 19 June 2014 13:34

Debt-CrisisArgentina has bluntly stated it cannot make the next bond payment. The exist fees being attacked to long-bond funds is also the realization that our models are spot on. I am off to urgent meetings in Europe. All I can say is our phone has been red-hot. Equities are rapidly becoming the new international gold and safe-haven. This adds to the trend of Austria declaring it never guaranteed the debt and France announcing 60% of their debt is illegal.

To all those sending emails on this subject and can it be stopped, the answer is of course, if there were no politicians. But this is Adam Smith in real life. They will only turn to our solutions WHEN there is no other choice. It would be against human nature for these people to say yes, you are right, let’s do something now. They will cling to power to their last dying breath. Fine, I would do whatever I can, but it is just not time. They have to bleed out of every possible orifice before they will ever yield. I truly wish I was wrong. But this is NOT my opinion – it is simple the fact of history. They will NEVER do the right thing for the country when they hold the power. They will blame the people and seize more power because that is always the answer to them.

DEBT has always been the Great Destroyer of Civilization. It is the opium of governments since the dawn of time. Government is just incapable of managing the economy and socialists like Pickitty just covet the wealth of everyone else. They alway assume they have a right to the labor of everyone else and there is never any discussion to the contrary.

....more from Martin:

Canada – the Sneak Preview

 

 

 
The Bear's Lair: Systemic Risk Worse Now Than 2008 PDF Print E-mail
Written by The Prudent Bear   
Thursday, 19 June 2014 09:28
bearSince the crash of 2008, huge attention has been paid by regulators to systemic risk, the risk that some event will cause the crash of the entire banking system, not just of an individual bank. Tens of thousands of pages of financial regulations have been written, and almost as many thousands of speeches have been bloviated, about how we now understand the dangers of “too big to fail” and therefore a crash such as occurred in 2008 can never happen again.

Needless to say this is nonsense; systemic risk is worse now than it was in 2008. What's more, the next crash will almost certainly be considerably nastier than the last one. - continue reading HERE

 
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Mark Leibovit
23 July 2014 ~ Michael Campbell's Commentary Service

We intruded on Mark Leibovit's summer break and asked him for...   Read more...

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