U.S. Treasury yield curve spread analysis

There is increased attention on the level of U.S. Treasury interest rates now that rates have moved up and are nearing their highest levels from last year. The recent rise in rates from the current round of QE2 (or Credit Easing) from our fearless leader OB1-Bernanke and his band of freedom fighters is playing out […]

Jeremy Grantham

This 30 minute interview with Jeremy Grantham is one of the smartest I have seen recently. Watch it!

Double Dip?

Many investors are convinced a double-dip recession is inevitable. Not me. One of the most reliable forecasters of recessions is the yield curve. A simple way to measure the steepness of the yield curve is to calculate the difference between the 10-year Treasury note and 3-month Treasury bill. Since 1955, there have been 9 recessions […]

U.S. Treasury yield curve

Look at how little rates have changed on the U.S. Treasury yield curve over the past year: The 30-yr bond yield closed at 4.35 today and the 3-mo bill closed at 0.16 leaving us with a curve that is 419 basis points steep. The 10-year (3.47) minus the 2-year (0.81) is 266 basis points steep.  […]

Federal Reserve’s exit strategy

Federal Reserve Chairman Ben Bernanke provided the following statement to the U.S. House of Representatives Committee on Financial Services this morning.     In our view, the notable points from the statement  are: Most of the emergency credit facilities have been closed The amount of credit extended has declined more than 90% from $1.5 trillion […]

Zero Nada Nil …. or 1.5% ?

For conservative investors, now is about the most difficult time ever to earn a safe return on your cash. Short-term Treasuries offer almost no return. Savings accounts, Money Markets, even CDs are offering extremely low rates. Many investors will receive monthly statements showing a 0% return for their money market account in January and a […]

U.S. Treasury borrowing notes

Today the Treasury Borrowing Advisory Committee released the minutes from their recent meeting. Below are the highlights : Given the cumulative deficit over the next three fiscal years of nearly $3.5 trillion according to OMB, Director Ramanathan stated that Treasury will need to remain extremely agile through its debt management approach and actions to confront […]

Savings Bonds? Remove the limits!

Today, the U.S. Treasury announced the updated Series I and Series EE Savings Bond rates. Series EE savings bonds purchased between November 2009 and May 2010 will earn a 1.2% fixed rate.  Series I Bonds purchased between November 2009 and May 2010 will earn a 3.36% annualized composite rate. The I Bonds composite rate consists […]

Frontline: the warning

PBS Frontline Website

NY Fed Treasury purchase details

Statement Regarding Purchases of Treasury Securities March 18, 2009 The Federal Open Market Committee (FOMC) has announced that the Open Market Trading Desk (the Desk) will begin a Treasury purchase program of up to $300 billion to help improve conditions in private credit markets. The Desk will concentrate purchases in the 2- to 10-year sector […]

U.S. Treasury refunding – 50 year bond possible

The Treasury Department announced another record quarterly refunding today. This surge in supply has forced some notable changes to the auction schedule. The Treasury will revive the 7-year note on a monthly basis. In addition, the Treasury will auction more 30-year bonds on a quarterly basis. Other ideas being considered for the future are introducing […]

U.S. Public Debt

The total public debt outstanding has been growing at an accelerating rate the past several months. As of February 2nd, the total public debt outstanding was $10,667,963,268,393.28 (yes, that is ten point six trillion dollars). The figures have become so big that most citizens cannot comprehend them. Another way to illustrate the recent increase in […]

The Emergency Economic Stabilization Act of 2008 (EESA)

A few sites are summarizing the bill… WSJ – via Nancy Pelosi’s office WSJ Summary Washington Post summary CNN has a current draft of the Bill in PDF form

Fannie & Freddie update

This morning, the U.S. Treasury released the following statement regarding Fannie Mae and Freddie Mac. September 7, 2008 hp-1129 Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers Washington, DC– Good morning. I’m joined here by Jim Lockhart, Director of the new independent […]

Inflation Expectations

The following two charts illustrate the 5-year and 10-year inflation expectations by comparing the 5 & 10 year nominal treasury (pink line) versus the 5 & 10 year TIPS (blue line). As you can see, inflation expectations (yellow line) remain well anchored. 5-Year Nominal vs. TIPS 10-Year Nominal vs. TIPS