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The stock market has experienced a fantastic run with the advent of quantitative easing (QE) policies by The Fed. Here is a chart of the S&P 500 index versus the Fed Funds Target rate. spxfed20`13 But The Hindenburg Omen* oracles (like Mark Faber) are coming out with warnings of a 20% drop in the SPX. To be sure, the Hindenburg Omen is flashing red … again. homentoday Will this be a redux of the 1987 stock market crash (as Mark Faber claims) when The Fed jumped in after the crash? spx1987 Or will it be a gradual decline like gold?...

The stock market has experienced a fantastic run with the advent of quantitative easing (QE) policies by The Fed. Here is a chart of the S&P 500 index versus the Fed Funds Target rate. spxfed20`13 But The Hindenburg Omen* oracles (like Mark Faber) are coming out with warnings of a 20% drop in the SPX. To be sure, the Hindenburg Omen is flashing red. hund080913 Will this be a redux of the 1987 stock market crash (as Mark Faber claims) when The Fed jumped in after the crash? spx1987 Or will it be a gradual decline line gold? gold080913 Of...

Today’s 30 year Treasury auction was similar to the 10 year auction from earlier this week. 30yraucr Specifically, the bid to cover ratio fell to the 2nd lowest point since February 2009. 30yrbcover February 2009 is near the beginning of QE. 04-qe-timeline Falling bid to cover reflects concerns about the Fed tapering (aka, removing the punch bowl). punchbowl

The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, today printed at 2.45 for the 10 year Treasury auction, the lowest since April 2009. This decline reflects concern that the Federal Reserve will slow its asset purchases. bidcov080713 And the bid to cover ratio has really been falling since 2012 as the 10 year Treasury yield has risen. bidcov10yry Here is a closer look at the bid to cover, the 10 year Treasury yield and the Bankrate 30 year fixed-rate average. closerlook1 As the market fears a tapering of Fed stimulus, the bid...

The House Committee on Oversight and Government Reform subpoenaed Obama Treasury Secretary Jack Lew for withholding documentation from Congress in the ongoing IRS Tea Party Scandal investigation. The Oversight Committee accuses the Obama Administration of impeding and obstructing the investigation. “During the past two weeks, President Obama and you have repeatedly labeled the IRS’s strategy of targeting Americans for their political beliefs as a ‘phony’ scandal. While the Obama Administration has so publicly deflected responsibility for the targeting, it simultaneously has attempted to thwart congressional oversight into the matter… the IRS has engaged in a systematic effort to delay, frustrate,...

The economic news, particularly surrounding Thursday’s jobless claims numbers and Friday’s job report, wreaked havoc on the Treasury 10 year yield. Despite that 10 basis point rise on Thursday and the 10 basis point drop on Friday, we are almost back to where we started at Wednesday close. ust10080213a Since May 1st, the US Treasury 10 year yield has risen almost 100 basis points. yc51080213 And the Bankrate 30 year fixed average (yellow) has risen as well by 106 basis points. br10080213 The spread between the Bankrate 30 FRM and the 10 year Treasury yield is now 181 basis points,...

House Republicans on Friday accused Treasury Secretary Jacob Lew of obstructing their investigation into the IRS’s targeting of tea party and conservative groups, and issued subpoenas for more agency documents. Oversight committee chairman Darrell Issa sent a scathing latter to Lew blasting him and Obama for dismissing the GOP’s claims about IRS targeting as a phony scandal, saying that Lew has attempted to thwart his investigation. (Snip) The IRS came under scrutiny when its auditor reported earlier this year that the agency had singled out groups with “tea party,” “patriot” or “9/12” in their names for special scrutiny when the...

(CNSNews.com) - According to the Daily Treasury Statement for July 26, which the Treasury released this afternoon, the federal debt has been stuck at exactly $16,699,396,000,000.00 for 70 straight days. That is approximately $25 million below the legal limit of $16,699,421,095,673.60 that Congress has imposed on the debt. The portion of the federal debt subject to the legal limit set by Congress first hit $16,699,396,000,000.00 at the close of business on May 17. At the close of every business day since then, it has also been $16,699,396,000,000.00, according to the official accounting published by the Treasury Department.

Video: Does the number $16.7 trillion ring a bell? It's the debt ceiling. It's the line in the sand that must not be crossed. And to protect that line we have a Republican Congress. But that line has been crossed and not a peep out of Congress or the major news media. Obama's unelected bureaucrat, Treasury Secretary Jack Lew, just unilaterally hiked the national debt of the United States another $51 billion dollars. And how did he do it? Simple. He just did it. No Senate. No Congress. No problem. He simply called it a "standard set of extraordinary measures"...

Rep. Michele Bachmann wants to know: How in the world has the federal government not reported any increase in the national debt in 56 days? As Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee Wednesday, Bachmann asked how there could be no increase reported in the total debt when the government is racking up about $4 billion a day in new debt. “After nearly 10 years as the head of the Federal Reserve, Chairman Bernanke could not answer my question today in Financial Services Committee,” Bachmann told WND. She wondered if there’s a political motive involved....

The US has experienced a phenomenal run (bull market( in Treasury and mortgage rates from September 1981. (US 10 year Treasury yield in white, The Fed Funds Target rate in red). t10fedfunds We can examine mortgage purchases applications (courtesy of the Mortgage Bankers Association) in distinct regimes over the bond bull market. The first regime is 1990-2008 where mortgages rates are generally falling and mortgage purchase applications are rising. mbpurchmb30pre2008 The second regime is 2008-2013 where house prices collapsed in many parts of the US, despite continually falling mortgage rates. In this regime, mortgage purchase applications fell (on average) with...

Fed Chairman Ben S. Bernanke will have a Q&A following the release on the Fed’s FOMC minutes today at 2pm EST. Here are the minutes. Quick summary of the last FOMC meeting: half the voting members want to stop asset purchases later this year. The other half, wait for improving economic conditions. The reaction in the 10 year Treasury yield? t10reaction But prior to his Q&A session, the 10 year Treasury auction went off as expected. trreas10yraux The 10 Year High Yield continues to climb. ust10ihg The 30 year auction is tomorrow. Stay tuned!

At a pre-Independence Day naturalization ceremony at the Treasury Department Wednesday, Treasury Secretary Jack Lew used about one-third of his address to a roomful of newly sworn-in citizens to criticize the America’s immigration system and plug the current immigration legislation. According to prepared remarks, he told these newest Americans that "too many immigrants do not get a fair shot at the American dream. Too often, they are forced to live and work in the shadows." After singling out the stories of some of the new citizens and what America held for them, Lew continued [emphasis added]: ...You see, immigration is...

The Trigger Has Been Pulled And The Slaughter Of The Bonds Has Begun By Michael Snyder June 25th, 2013 The Bears Are Unleashed On Wall StreetWhat does it look like when a 30 year bull market ends abruptly? What happens when bond yields start doing things that they haven't done in 50 years? If your answer to those questions involves the word "slaughter", you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. Over the last several years, reckless bond buying by the Federal Reserve has forced yields down...

5-YEAR TREASURY AUCTION FINISHES ON THE SCREWSMatthew BoeslerJune 26, 2013 Wikimedia Commons The results of today's auction of $35 billion of 5-year U.S. Treasury notes are out. The high yield during the auction was 1.484%, matching the when-issued yield before the auction. In bond market parlance, this means the auction finished right "on the screws." The bid-to-cover ratio, which measures the dollar amount of bids versus the dollar amount of bonds actually auctioned, came in at 2.45, down from 2.79 at the May auction – marking the weakest demand for 5-year notes since September 2009. Direct bidders, those who bypass...

Now that we know that The Fed is likely to withdraw its stimulus over the next year, global sovereign rates are rising. And the US Treasury 10 year continues to rise. Then there was this tantalizing story in the Wall Street Journal. Bernanke: Majority of Fed Officials Don’t Expect to Sell MBS The good news? MBS pay down quickly because of prepayments and other mortgage terminations. Hence, mortgage duration is fairly low. The bad news? Duration of Fannie Mae 4% MBS was 0.5 on September 25, 2012 and is now at 5.8 (thanks to rising Treasury rates). So, as Treasury...

May 2nd was turning point in the fixed-income market. Since May 2nd, Treasury yields have spiked. And Tips yields have spiked over the same period. U-oh. Agency MBS prices continue to decline. For those of us who expected rising rates, the curve trades have been most profitable. Here is the US Treasury curve change since May 2nd. Nearly 60 basis point jump on the 10 year. Here is a chart of Fannie Mae 3% MBS prices since May 2nd. Surprise! Interest rates are rising!

US Treasury is considering letting China cut in front of other investors and buy Treasury debt direct from … Treasury. That is, bypass Primary Dealers. The relationship means the People’s Bank of China can buy United States debt using a different method from any other central bank. (Reuters) – China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters. Its not the first time Treasury has schmoozed China. In 2009, when Treasury officials found...

A review by the Treasury Department’s inspector general found that the Internal Revenue Service (IRS) spent $50 million dollars on conferences for employees between 2010 to 2012, according to reports. The audit, set to be released on Tuesday, says the agency spent the funds on more than 200 employee conferences, including an August 2010 meeting in Anaheim, Calif., which cost taxpayers $4 million. According to a statement from the House Oversight Committee, 15 outside speakers at the event were paid a total of $135,000 and many attendees were given perks including baseball tickets and suites at the hotel, the AP...

Treasuries recorded the steepest monthly loss since 2009 amid speculation the Federal Reserve could curtail its unprecedented monetary stimulus program if recent improvement in domestic economic data is sustainable. U.S. government debt tumbled 1.8 percent in the month through May 30, the most since December 2009, according to Bank of America Merrill Lynch index data. Yields extended gains yesterday after a report showed consumer confidence rose in May to the highest level since 2007. A government report on June 7 is forecast to show the U.S. added 165,000 jobs in May and the unemployment rate remained at a four-year low...