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Treasuries

caribbean20

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I’ve been doing the 3 and 6 month, most still in cash and money market (which now yield 2%++). Waiting for the dust to settle on interest rate yields. This has been an unprecedented move up.

Keeping some dry powder to deploy in equities if we get a sharp downturn to 3,000 on the S&P. EVERYTHING we’ve purchased on the equity front, last 6 months, now under water, including META last week. I may have learned my lesson, but probably not.
 

c_land

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Pivot is back on the menu

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MSum661

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coolchange

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DrunkenSailor

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They had to because several UK pension funds are getting hit with margin calls and are trying to avoid default.
I'll keep my opinions to myself from here on out. Just post info.


Keeping your opinions to your self would be a detriment to this thread.

Bank of England drew a line in the sand and helped out bond liquidity today. You can't have it both ways. They are essentially signalling to the fed that it's time to slow down. All they are doing in the long run is extending inflation for temporary market relief. Fed meanwhile is still hanging the war drums making up for lost time. Bank of England is restarting it's emergency bond buying program. Fed is trying to taper. Someone's right and someone's wrong. I personally think the fed is going to need all the dry powder it can create in the next few months. Supply chain isn't improving and energy costs are rising again. All signs point to stormy weather ahead.
 

caribbean20

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Looks like bank CDs in the secondary market are an interesting opportunity. Had a bond market trader buddy show me on Fidelity today. Yields are 50bps over T Bills. Of course credit risk at first look, but you can get the $250K FDIC back stop to cover credit risk.

Individual investors can arbitrage the federal government to get the enhanced yield. I’m going to have a look on Monday when I get my game face on.
 

regor

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"It's A Global Margin Call. I Hope We Survive"

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The average US pension has probably lost more than 20% of its asset value this year. Some have lost much more.

MON OCT 10, AT 10:20 AM


While Cabana's warning - which will come true, it's just a matter of time - has yet to manifest itself in a breach of the US Treasury market, it is effectively describing the slow-motion collapse in the European government bond market to a T.
 

DrunkenSailor

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"It's A Global Margin Call. I Hope We Survive"

teaser image
The average US pension has probably lost more than 20% of its asset value this year. Some have lost much more.

MON OCT 10, AT 10:20 AM


While Cabana's warning - which will come true, it's just a matter of time - has yet to manifest itself in a breach of the US Treasury market, it is effectively describing the slow-motion collapse in the European government bond market to a T.
This. There is only so much bend. The trend line on treasuries is unprecedented. They had no choice but to floor it if they wanted to have the ability to have somewhere to go when the music stops.i was legitimately concerned that we would see a negative rate environment otherwise.
 

MSum661

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This. There is only so much bend. The trend line on treasuries is unprecedented. They had no choice but to floor it if they wanted to have the ability to have somewhere to go when the music stops.i was legitimately concerned that we would see a negative rate environment otherwise.

A crisis in the bond market will bring everything down along with it. Something is definitely going to systemically break. The question now is how bad is it? The Feds balance sheet will probably go way north of $10 Trillion, at a time they're suppose to be tightening, by attempting to bail out these MF'ers again with more Plunge Protection Team intervention.
A lot of people predicted this was going to end badly back in 09 when the Fed decided to paper everything over and extend and pretend.
So now .....here we are!
 

MSum661

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regor

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1665498603956.png



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The second in command of our economic policies.................................🤣🤣🤣🤣🤣🤣🤣🤣


Be afraid, be VERY afraid..........................especially if yore relying on a pension.
 

pronstar

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Political theater.
They have no idea what theyre doing but hey, at least they're doing something, right?:rolleyes:
 

regor

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1665521346100.png


“My message to the funds involved and all the firms is you’ve got three days left now,” Bailey said at an event in Washington on Tuesday.
“You’ve got to get this done. The essence of financial stability, is that it (intervention) is temporary. It’s not prolonged.”

Or what Andy?

What does the BoE Governor expect global markets to do now? Knowing that this is a "serious risk to financial system stability" and more stressful than bank stress tests, what would you do with your investments?

Plankton popcorn.jpg
 

arch stanton

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Help me understand what is the BOE doing
what I think is government bonds are being cashed in so they can have cash or are they cashing them in to buy higher yield bonds in the future but the BOE does not want to pay what the investors think a future bond should yield.
So if the BOE does not buy the cashed in bonds at full value they will sell at a large discount and cause huge losses to the public investor sectors ?
 

pronstar

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Help me understand what is the BOE doing
what I think is government bonds are being cashed in so they can have cash or are they cashing them in to buy higher yield bonds in the future but the BOE does not want to pay what the investors think a future bond should yield.
So if the BOE does not buy the cashed in bonds at full value they will sell at a large discount and cause huge losses to the public investor sectors ?

Here’s a good recap of what the situation is.

 

Christopher Lucero

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WELL...
in case you didn't notice, there was a monumental/historical shift that occurred in the wake of USA abandoning the London Interbank Rate (LIBOR) as a mortgage/financial instument index and moving to the US Secured Overnight Financing Rate (SOFR).
For many MANY years of LIBOR index utilization, financial products could be manipulated by the few banks that 'colluded' to set a rate for overnight money. For those products, the LIBOR rate and thus the BOE itself, dictated what the marginal return that any underwriter against mortgages or LIBOR contracts might expect.
Scandals in 2008, related to the mortgage crisis back then, and more recently in a scam that Barclays (one of those interbank partners) was prosecuted over in 2012, were the precipitating events leading to the LIBOR abandonment in USA.
More recently, in the light of still active contracts based in LIBOR, the US House approved a measure (the Sherman bill) to prevent a proliferation of lawsuits that would predictably have precipitated from the $16T worth of existing LIBOR contracts still open in the USA. (it is at the Senate desk now).
SO, my take is that BOE has to reposition itself after the change that happened in 2021, officially cutting off a long trusted source for UK marginal returns (read, "wealth").
i.e. UK built it's wealth over many years on the back of Boomers. That is many of us. But it's over now.

FWIW, with USA, Inc. is intentionally increasing the marginal rate (a risk proposition) - of passive returns it is willing to pay to investors to be somewhat comparable to recent dividend and other commercially available passive returns. That puts the fed and treasury back into focus for investors, especially in light of decaying public market returns. MANY nations are now repositioning into a form of economic nationalism (complementing political nationalism), and shrinking globalism. (Hooray? or maybe, Hooray!)
Whatever change is coming it will be precipitated by recognition that change is hard, and that it must spring from willing hearts locally.
 
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DrunkenSailor

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CPI data out and surprise inflation isn't going anywhere. Markets reacting Poorly. 3 year just spiked over 4.5. buckle up is right.
 

c_land

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The fed is nearing their rate hike ceiling and they aren't sure if it is going to be enough to bring inflation back down to 2%. The strong jobs market isn't helping. Now the fed is saying that they may need to continue rate hikes past the preset ceiling.

The bond market is taking this news poorly. With the 2 year gaining almost 50 basis points starting Friday. Market was stabilizing and rates were beginning to come down as securitization spreads tightened. The sun was shining for a brief moment there and things were looking better. Now storm clouds are back.

It will be interesting to see what spreads look like on the next few printed deals. A couple of months ago we were 250+ in January that number was under 150 which is a huge market movement that showed returning stability. If spreads remain tight rates will hold lower. If they widen back out rates will go up.
Posting here because the RE thread is just a parody at this point.

I watched this about a month ago and your post there reminded me of it. Jim Bianco on Bloomberg, Video should start around 14:00.


Cliff notes: 2 year note yield has always peaked above the terminal rate. Terminal rate now is priced in at 5%-5.25%. 10S/2S is about as inverted as it gets right now. Rather than further inversion, a parallel shift may be a safe bet dragging the rest of the curve up as hikes continue.

What do we think?
 

2Driver

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I bought 3 at 4.8% yesterday. Ill pick up 2 more this month.

They were 3-6 month T bills. By June youll be getting them at 5+%.

Fed terminal rate for fed funds looking like it will be 5.5 ish
 

c_land

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I bought 3 at 4.8% yesterday. Ill pick up 2 more this month.

They were 3-6 month T bills. By June youll be getting them at 5+%.

Fed terminal rate for fed funds looking like it will be 5.5 ish

I have a bunch maturing the next two weeks. I hope they keep this higher for longer thing going. Pretty nice returns on low risk right now..... just hope the debt ceiling thing gets sorted out lol
 

v6toy4x

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Posting here because the RE thread is just a parody at this point.

I watched this about a month ago and your post there reminded me of it. Jim Bianco on Bloomberg, Video should start around 14:00.


Cliff notes: 2 year note yield has always peaked above the terminal rate. Terminal rate now is priced in at 5%-5.25%. 10S/2S is about as inverted as it gets right now. Rather than further inversion, a parallel shift may be a safe bet dragging the rest of the curve up as hikes continue.

What do we think?
"What do we think?"

I think you are all way to smart for me!

All I want is someone to tell me where to stash some house sale proceeds and get a safe 5%ish return, and have some sort of access, maybe thee T bills you speak of with varying durations??
 

2Driver

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Where/how are you guys buying treasuries ?
Yep Schwab. sort by maturity and yield then point click, buy, done. takes about 2 minutes.

Plus you are buying on the open market so I believe there are a lot more options for type and maturity dates
 

Havasu blue label

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"What do we think?"

I think you are all way to smart for me!

All I want is someone to tell me where to stash some house sale proceeds and get a safe 5%ish return, and have some sort of access, maybe thee T bills you speak of with varying durations??
Cd Southern California credit union ask for 6 percent 11 months
 

DaytonaBabe

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"What do we think?"

I think you are all way to smart for me!

All I want is someone to tell me where to stash some house sale proceeds and get a safe 5%ish return, and have some sort of access, maybe thee T bills you speak of with varying durations??

Capital One has an 11 month CD at 5%
 

Orange Juice

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Where/how are you guys buying treasuries ?

It’s pretty easy to setup an account. I suggest you go slow, and seek outside advice, and watch quality YouTube videos.

I started buying in November 2022. It’s not very much of a return, but it’s cash flow. I’m in 1-24 month bills/notes. My goal is to cover my Property taxes, and home/car/boat/personal/medical insurance, when I retire.
 

v6toy4x

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Is there a limit on the amount of investment at any one time?
 

TimeBandit

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Is there a limit on the amount of investment at any one time?
They are sold in One bond increments and you can buy A million dollars worth if you want to.

Some days on Charles Schwab you can buy one bond for the asking price, some days the minimum purchase 10, 30 or 200 bonds, it varies. Check early in the morning.

6 month asking price right now is $97.61 per bond, in 6 months you get $100. That is 4.93% YTM or yield to maturity. $35,000. minimum purchase for this price TODAY, tomorrow will be different.

Remember, they are trying to finance a 30 Trillion dollar deficit!


 
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coolchange

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Is there a limit on the amount of investment at any one time?
You probably want to go to treasurydirect.gov and start reading. You might start with I series if you can lock in your cash for 15 months. Currently 6.98.
As said YouTube credible channels. Read the web sight. If you do go itreasury make sure your info is perfect
 

boatnam2

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Youtube Diamond nest egg you will find out every thing you want and need to know about a t-bill. Treasury direct is sort of a pain all my t-bill maturing through them im moving to Fidelity. Leave the i-bonds there for now.
 

DrunkenSailor

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Posting here because the RE thread is just a parody at this point.

I watched this about a month ago and your post there reminded me of it. Jim Bianco on Bloomberg, Video should start around 14:00.


Cliff notes: 2 year note yield has always peaked above the terminal rate. Terminal rate now is priced in at 5%-5.25%. 10S/2S is about as inverted as it gets right now. Rather than further inversion, a parallel shift may be a safe bet dragging the rest of the curve up as hikes continue.

What do we think?

The bond market always seems to have the best intentions of being predictive rather than reactionary. Evidenced by rate movements a step ahead of the feds next move effectively pricing in the future fed hike before it happens. Unfortunately bond investors are also a bunch of prissy bitches walking through a horror movie jumping at every house creak.

A bad CPI number, a good labor number, a euro inflation number, a butterfly in Japan getting blown off course all lead to crazy swings in pricing. Will the 2 year hop above 4.5? Absolutely but I don't think that's the new normal until the week before the next fed meeting, we get a bad CPI number next week or some politician on another continent tries to implement some stupid financial policy that investors take poorly. I have to think we hover in the just below 4.5 area we are in now. At least that's kinda what I am hoping.
 

DrunkenSailor

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"What do we think?"

I think you are all way to smart for me!

All I want is someone to tell me where to stash some house sale proceeds and get a safe 5%ish return, and have some sort of access, maybe thee T bills you speak of with varying durations??
Every broker be it schwab, TD, whoever is offering a money market account with a yield in the high 4's. I would jump all over that. Treasuries are not going to be the sure thing in 23 that they were in 22.
 

boatnam2

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Almost 5 on some t-bills today, fidelity MM is about 4.3, i use it little sugar and sprinkle a little on everything.
 

Orange Juice

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6 months T-bill just hit 5% today. Good timing, I have a 4% maturing today
5% is good. I feel like I’m all set now. Should make it through the next 2 years, even if stocks crash. Below is a break down on the ROI @ 5%.


$100 = $5

$1000 = $50

$10,000 = $500

$100,000 = $5000

$500,000 = $25,000

$1,000,000 = $50,000

Maybe by 2024, Rates will be 6%🤞
 
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