Free Republic

Closely followed market watcher Jim Grant disputes the argument that there's no harm in the Federal Reserve keeping interest rates near zero percent—calling for the cost of borrowing money to be determined by the free market. He said Tuesday the price of the central bank's persistent easy money policies is on display currently in the form of stifling American enterprise and sending millions of people from the workforce "more or less permanently." "The prospective cost is the unmasking of the misallocations of capital that will have come about through the levitation of asset prices," including real estate, Grant said. "If...

Many stock market investors have, in the back of their minds, the comforting illusion that the Quantitative Easing with which the Fed showered Wall Street during the past three years could restart if the market falters. (Under Quantitative Easing, the Fed gave banks $85 billion each month to help stimulate lending and spending and to drive up stock prices). Some also see that the impending rise in interest rates can be reversed if the economy begins to drop. Both assumptions are really illusions. The factors that impelled an end to Quantitative Easing and to higher interest rates rule out a...

The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government. During those eight weeks, Treasury took in $341,591,000,000 in revenues. That was a record for the period between Oct. 1 and Nov. 25. But that record $341,591,000,000 in revenues was not enough to finance ongoing government spending let alone...

Here’s a frightening fact via The Atlantic’s Moises Naim.  Roughly half of the world can’t answer these three questions correctly: 1.  Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow? A) more than $102; B) exactly $102; C) less than $102; D) do not know; refuse to answer.2.  Imagine that the interest rate on your savings account is 1 percent per year and inflation is 2 percent per year. After one year, would you...

Former CBS News reporter Sharyl Attkisson has made the media rounds claiming that network management was not exactly happy she was covering stories critical of the Obama administration. When new Benghazi information was made public this week, CBS News covered the new details (with a disclosure that Ben Rhodes, the Obama administration official at the center of the controversy, is the brother of CBS News President David Rhodes). However, some conservative sites still claimed a serious conflict of interest, with the Heritage Network blog and the Washington Free Beacon picked up on the familial connection.

Call it predatory lending. Or call it financial service for the neediest. Either way, more Minnesotans are turning to high-interest payday loans and other services outside the mainstream banking system, controversial enterprises that operate through a loophole to dodge state restrictions. On a typical morning throughout Minnesota, customers stream into any one of some 100 storefronts where they can borrow hundreds of dollars in minutes with no credit check – at Super Cash on the north side of Bloomington, for example, at Ace Minnesota Corp. on Nicollet Avenue in Richfield and across the metro on Roseville’s Rice Street at PayDay...

<p>For the next few years, deficits are looking pretty good. But the interest owed on the country's cumulative debt is set to nearly quadruple over the next decade.</p> <p>The Congressional Budget Office projects that interest will be $233 billion this year, or 1.3% as a share of the economy.</p>

Despite the federal deficit’s recent decline, it remains large, and the nation’s growing debt threatens to quickly accelerate it to new heights. During the past four years, the deficit has been historically high and federal interest rates historically low. Together, they have overshadowed the rapidly increasing federal debt. Now, with the deficit down from its heights and interest rates up from their lows, a looming menace is becoming clear: The federal government’s increasing debt has created the equivalent of a large, new entitlement-spending program in the form of debt-service costs. No longer a peacetime record, the deficit still remains very...

The global sovereign yield table is a sea of green foam. I say green foam because the Central Banks are still pumping air into the water at high speed. wbm082713 Except for the PIGS (Portugal, Italy, Greece and Spain). They are seeing rising sovereign yields for the 10 years. The US is down 7.1 basis points on the previous poor durable goods report and Syria war jitters. Japan is down 2.1 bps while the UK is down 11.3 bps. Oil is shooting through the roof. But corn, an ingredient in ethanol, is falling. oilF Green sea form and oil don’t...

NEW YORK (MainStreet) — The housing market is on the rise again after...

Federal Reserve Chairman Ben Bernanke may be stepping down when his term expires in January. If that happens, President Obama gets to nominate his successor. The leading candidates are Fed Vice Chair Janet Yellen and former Treasury Secretary Larry Summers. Both Yellen and Summers are from elite, liberal universities (University of California at Berkeley and Harvard University, respectively). Both are similar to Bernanke in terms of policies. Yellen is quiet and Summers is … well, Summers – quite opinionated. It is doubtful that other respected candidates like Jeff Lacker at the Richmond Fed or Thomas M. Hoenig from the Kansas...

Since May 1st, both US Treasury yields and Japanese sovereign yields have risen, but mostly the US Treasury yields. usjapyc063013 And with the rise in sovereign yields, mortgage rates in both the US and Japan have risen. japausmortgagerates Both US and Japanese house prices were deflating since 2008, but Japan (in red) continues to deflate while the US house prices (in blue) are showing a sudden increase … again. usjaphouse In Japan, mortgages secured by housing has been declining since 1992, but started to stabilize in 2007 when US mortgage volume started to fall. mortgvoljapanuse So, how will rising mortgage...

The Congressional Budget Office (CBO) has released its budget forecast from 2013 to 2023. Their forecast? Deficits as far as they eye can see … and then some. Here is the CBO’s budget forecast from 2008. The budget forecast was actually rosy! Here is a comparison of the two forecasts: Why the change from a rosy forecast to a gloomy one? Healthcare and interest costs. Both are expected to rise until 2013 (and beyond). A recent study by Congress revealed that Obamacare (aka, the Affordable Healthcare Act) will increase healthcare insurance premiums by 100% up to 400%. “Affordable” health care?...

According to the Wall Street Journal, The Fed is planning to dial back the incredible monetary stimulus. But it won’t go “cold turkey.” We can always rely on The Dallas Fed’s Richard Fisher for a pithy comment: “I don’t want to go from wild turkey to cold turkey,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in an interview Friday. “I think we ought to dial it back.” Mr. Fisher is part of a contingent of Fed hawks who are wary of the central bank’s easy-money policies. After all, Central Banks have lowered interest rates 511 times...

According to the Wall Street Journal, The Fed is planning to dial back the incredible monetary stimulus. But it won’t go “cold turkey.” We can always rely on The Dallas Fed’s Richard Fisher for a pithy comment: “I don’t want to go from wild turkey to cold turkey,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in an interview Friday. “I think we ought to dial it back.” Mr. Fisher is part of a contingent of Fed hawks who are wary of the central bank’s easy-money policies. After all, Central Banks have lowered interest rates 511 times...

<p>The Bank of Japan unleashed the world’s most intense burst of monetary stimulus on Thursday, promising to inject about $1.4 trillion into the economy in less than two years, a radical gamble that sent the yen reeling and bond yields to record lows.</p>

Today’s job market report showed a better gain in jobs than forecast. Even though full-time jobs declined and part-time jobs increased, the market interpreted this news as positive. But along with the “positive” jobs news, we also saw a rise in the US Treasury 10 year yield. It has generally been increasing since November 2012. Meanwhile, the Fannie Mae 30 year current coupon rose to his highest level since May of 2012. TBA performance deteriorated on the jobs news. The Bankrate 30 year fixed-rate mortgage average rose, but is still below the recent peak of 3.69% on February 20, 2012....

Interest Expense on the Debt Outstanding The Interest Expense on the Debt Outstanding includes the monthly interest for: U.S. Treasury notes and bondsForeign and domestic series certificates of indebtedness, notes and bondsSavings bondsGovernment Account Series (GAS)State and Local Government series (SLGs) and other special purpose securities. Amortized discount or premium on bills, notes and bonds is also included in the monthly interest expense.The fiscal year represents the total interest expense on the Debt Outstanding for a given fiscal year. This includes the months of October through September. View current month details (XLS Format, File size 146KB, uploaded 01/07/2013).Note: To...

Over the last 12 months, interest rates around the world have come tumbling down. In terms of 10 year sovereign yields, the US fell 40.8%, Germany fell 80.4% and the UK fell 49.1%. Mortgage rates in the US have fallen as well, but not as much. According to the Mortgage Bankers Association, the 30 year fixed rate mortgage effective rate fell 16.51% over the past year. This decline is considerably less than the 40.8% decline in the 10 year Treasury yield. The Fed realizes that whether or not the US goes off the fiscal cliff or not, its citizens are...

The Biggest Financial Scandal In History?Michael SnyderJuly 5, 2012 We always knew that the financial markets were rigged, but this is getting ridiculous. It is now being alleged that 20 major banks have been systematically fixing global interest rates for years. Barclays has already been fined hundreds of millions of dollars for manipulating Libor (the London Inter Bank Offered Rate). But Barclays says that a whole bunch of other banks were doing this too. This is shaping up to be the biggest financial scandal in history, and criminal investigations have been launched on both sides of the Atlantic. What those...