| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Is Ben Lost? |
Seeking Alpha - Aug. 29, 2010 - by Andrew Butter
The much awaited speech by Ben Bernanke, on Friday, was a bit of a non-event. It was interesting, however, to see the 30 Year bounce, from 3.55% to 3.7%, the moment that Ben explained his cunning plan to push long-term interest rates down. But at least we learned that $140 billion of the $1.25 billion the Fed advanced to buy agency debt and MBS, got repaid.
One question Ben: “How much did you pay for the $140 billion that got repaid? Did you make a profit, or are you going to wait until Ron Paul’s audit before you let us know how that went?.”
I know I’ve got a dirty mind, but I can’t help thinking that if Ben had made a profit on that transaction, he would have been crowing about it. I loved this bit, particularly the “Thus”:
Thus, our purchases of Treasury, agency debt, and agency MBS likely both reduced the yields on those securities and also pushed investors into holding other assets with similar characteristics, such as credit risk and duration. For example, some investors who sold MBS to the Fed may have replaced them in their portfolios with longer-term, high-quality corporate bonds, depressing the yields on those assets as well.
Hmm…
Even Alan Greenspan and Larry Summers conceded that there is absolutely nothing that the Fed can do to change long-term Treasury yields. But, now Ben the Boy is saying that he can do that, he must be Superman!
Good to see that Superman is also taking the credit for pushing down yields on agency debt and toxic MBS. Obviously he is a genius, the Maestro is re-incarnated, Err…but here is one little thing; he’s the only guy buying that garbage.
Oh, and whoopee, Ben thinks that the “investors” (translate deadbeat zombie banks), who sold him their (toxic) MBS, have all rushed out to buy corporate bonds. I’m not quite sure what planet he’s on. I thought they either kept the money on deposit with the Fed, or bought Treasuries to repair their capital adequacy. Note the “may”…as if he didn’t know!
But this was the kicker, admittedly hidden away between jargon-heaped on jargon, but there all the same:
(Al those good things managed)... provide further support for the economic recovery while maintaining price stability, the Fed has also taken extraordinary measures to ease monetary and financial conditions.
I especially love the part about “further” support. As if the banks are going out and lending money to Main Street, as opposed to simply using their free, Fed supplied, get-out-of-jail card to create an illusion of solvency whilst they “extend and pretend”. Similar to what happened in Japan after their bubble burst.
The real gem, however, was the idea of “maintaining price stability”. What that means is stopping assets prices (house prices, commercial real estate, and to some extent stocks) from going down to where they have to go, before market clearing can start.
Funny how when asset prices were bubbling through the roof, that was not considered “inflationary” by the Fed and was not something to be concerned about. But, when asset prices fall through the floor, that is considered deflationary (or disinflationary), and is very bad.
Ben looks to me suspiciously like a greenhorn lost in the woods who used up all his ammo shooting at shadows. And yet, there is the Big Bad Wolf of private sector deleveraging faster than he can run the printing presses, (and more importantly, get that money out into the real world) lurking round the corner.
Disclosure: No positions
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