Trasury bonds
Coho, how's the bond business? gold and silver are saying very bad things about it.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
Comments
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@derryb said:
Coho, how's the bond business? gold and silver are saying very bad things about it.He says to ask our leaders as they are the salesmen.
BTW---did you mean to write Trashury Bonds? Lol
Excuses are tools of the ignorantKnowledge is the enemy of fear
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@RedneckHB said:
@derryb said:
Coho, how's the bond business? gold and silver are saying very bad things about it.He says to ask our leaders as they are the salesmen.
BTW---did you mean to write Trashury Bonds? Lol
the leaders pump and promote. They leave the selling of bad paper to shysters.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
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10-year Treasury bonds are at their most attractive yields in decades. A 60/40 portfolio now works.
Yield investments can provide income. Spread product is still tight, but it will widen going forward.
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10-year Treasury bonds are at their most attractive yields in decades. A 60/40 portfolio now works.
Looking at the chart in Jan '67, the yield was about what it is now and within 14 years the rate topped out at 15.32% The situation we have now is much worse in terms of gov't spending and Fed money creation. In 10 years, those bonds you promote in your 60/40 portfolio will only be worth 30% of what your unfortunate clients spend on them.
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.2 -
@jmski52 said:
Looking at the chart in Jan '67, the yield was about what it is now and within 14 years the rate topped out at 15.32% >The situation we have now is much worse in terms of gov't spending and Fed money creation. In 10 years, those >bonds you promote in your 60/40 portfolio will only be worth 30% of what your unfortunate clients spend on them.JM, the bond bear market actually began in 1946 with the 20-year Treasury at about 2.2%. The yield rose -- the price of bonds fell -- for the next 35 years, topping out as you noted just over 15% in September 1981 (I remember it well, I was a sophmore taking his 1st bond course as an Economics major
).The problem during that bond bear market was NOT spending or deficits....it was inflation. Deficits were WORSE from 1981 onward for the most part yet rates collapsed for 40 years.
I agree the deficits and/or national debt need to be addressed, cost curves must be bent downward.
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@jmski52 said:
In 10 years, those bonds you promote in your 60/40 portfolio will only be worth 30% of what your unfortunate >clients spend on them.My clients rarely regret any of my bond moves as I have an exemplary track record going back to the 1980's. That includes spread products, too.
For the portfolio or individual bonds to be worth only 30% of what they spend on them would imply a 70% loss in price. Given durations of about 8 years for the current 10-year Treasury, it would appear you are implying an 800 bp. (8% points) rise in bond yields which I feel is ridiculous.
Are you saying the 10-year Treasury is going to 12% ??
I do believe durations should be managed in a rising rate environment but there are lots of funds to buy 10-year paper at 5% or a bit above. So I think we're closer to the top of the range but will continue to buy bonds or bond funds with durations of 4-6 years, which should do fine in the range of interest rates I expect.
If I'm wrong, I won't get burned unless stocks also collapse.
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@jmski52 said:
In 10 years, those bonds you promote in your 60/40 portfolio will only be worth 30% of what your unfortunate clients spend on them.No. They would have matured at 100.
GF....they dont know what duration means.
Excuses are tools of the ignorantKnowledge is the enemy of fear
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For the portfolio or individual bonds to be worth only 30% of what they spend on them would imply a 70% loss in price.
No, it doesn't imply a 70% loss in price. It implies a 70% loss in the value of the currency.
No. They would have matured at 100.
So what? They would have been paid off in much cheaper dollars.
GF....they dont know what duration means.
coho, if you assume that your clients are all so ignorant you will soon find that you have fewer of them. And you'll deserve it.
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.0 -
the bond bear market actually began in 1946 with the 20-year Treasury at about 2.2%. The yield rose -- the price of bonds fell -- for the next 35 years, topping out as you noted just over 15% in September 1981
Post WWII was an economic boom until stagflation became an issue around 1975. For your entire career, the bond market had the Fed's easy money policies to support it, so recommending a 60/40 portfolio was a no brainer in retrospect.
The whole economic situation is different now. Interest on the national debt is cannibalizing the GDP to such an extent that the economy has no hope of growing itself out of trouble. We are going to see money creation and bailouts such that hyperinflation becomes a real possibility. And that doesn't even consider how $120 trillion in unfunded liabilities will require even more money creation and currency debasement.
I don't see how you think that bodes well for bonds. Got gold & silver?
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.0 -
@GoldFinger1969 said:
I agree the deficits and/or national debt need to be addressed, cost curves must be bent downward.
Lack of a gold standard to restrain political spenders destroyed the ability to do this. There is no longer a "leash" on those who create currency and those who spend on behalf of the government. Once economists explained the restraints of a gold standard to their elected leaders, these leaders quickly solved the problem only to create a monster of a problem that can never be fixed without destroying the value of the currency. The Magic Money Tree cannot and will not ever be chopped down. The only cure (soverign default on the debt) is unthinkable but likely to eventually occur. Our only hope is that it is far away, but politicians will likely ruin that hope.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
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Oh, Bessent is taking a cool $trillion from the General Funds to buy back government bonds.
Aside from the gross misappropriation of public funds, why are bonds such a crappy proposition that nobody besides coho and GF will deign to buy them?
Got precious metals?
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.1 -
@jmski52 said:
Post WWII was an economic boom until stagflation became an issue around 1975. For your entire career, the bond >market had the Fed's easy money policies to support it, so recommending a 60/40 portfolio was a no brainer in >retrospect.No, we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell (2017-20).
The whole economic situation is different now. Interest on the national debt is cannibalizing the GDP to such an >extent that the economy has no hope of growing itself out of trouble. We are going to see money creation and >bailouts such that hyperinflation becomes a real possibility. And that doesn't even consider how $120 trillion in >unfunded liabilities will require even more money creation and currency debasement.
I don't see how you think that bodes well for bonds. Got gold & silver?Yes, I have them. But unless a collapse is happening in the next 10-12 years, they won't do much, IMO.
We can manage the debt/deficits if we just bend the cost curve down slightly with entitlements. AI will help as if it raises real GDP potential by 1% that will HALVE the debt costs in 20 years.
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we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell 2017-20).
From 1981 on, the massive move wasn't tightening. The massive move was from 15% to ZIRP over 40 years. That's your "massive move" and it wasn't too tough to make money in bonds when the Fed continued to rescue the market whenever Wall Street got in trouble.
That's over now because the whole world can see what happens to the dollar when the Fed poofs money into existence every time that they want to manipulate the markets. Now they've decided to use nonexistent money from the general account that's already in the hole by $1.5 trillion to $2 trillion annually.
You can't make this stuff up. Thanks to the financial engineers in charge, the downside looks pretty ugly.
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.0 -
faith in AI...check
faith in bond market...check
faith in banking system...checkGovernment is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
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@derryb said:
faith in AI...check
faith in bond market...check
faith in banking system...checkFaith in reality....? Head-check...NOT! THKS!!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Wooooha! Did someone just say it's officially "TACO™" Tuesday????
Retiring at 55, what day is today?
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@jmski52 said:
For the portfolio or individual bonds to be worth only 30% of what they spend on them would imply a 70% loss in price.No, it doesn't imply a 70% loss in price. It implies a 70% loss in the value of the currency.
No. They would have matured at 100.
So what? They would have been paid off in much cheaper dollars.
Only if there is much higher inflation. But at least you agree and understand that youd have the same number of dollars plus, of course, interest. Dont forget the interest as thats a pretty important part of the equation. And if you got 6% and inflation was 4%, did you not come out ahead?
Excuses are tools of the ignorantKnowledge is the enemy of fear
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@jmski52 said:
Oh, Bessent is taking a cool $trillion from the General Funds to buy back government bonds.Aside from the gross misappropriation of public funds, why are bonds such a crappy proposition that nobody besides coho and GF will deign to buy them?
Got precious metals?
Bonds paid me 3% over last 6 months and...my PMs, ehh, they didnt fare as well.
Excuses are tools of the ignorantKnowledge is the enemy of fear
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@GoldFinger1969 said:
@jmski52 said:
Post WWII was an economic boom until stagflation became an issue around 1975. For your entire career, the bond >market had the Fed's easy money policies to support it, so recommending a 60/40 portfolio was a no brainer in >retrospect.No, we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell (2017-20).
The whole economic situation is different now. Interest on the national debt is cannibalizing the GDP to such an >extent that the economy has no hope of growing itself out of trouble. We are going to see money creation and >bailouts such that hyperinflation becomes a real possibility. And that doesn't even consider how $120 trillion in >unfunded liabilities will require even more money creation and currency debasement.
I don't see how you think that bodes well for bonds. Got gold & silver?Yes, I have them. But unless a collapse is happening in the next 10-12 years, they won't do much, IMO.
We can manage the debt/deficits if we just bend the cost curve down slightly with entitlements. AI will help as if it raises real GDP potential by 1% that will HALVE the debt costs in 20 years.
We all know that aint happeneing. Yes dcarr, all!! Haha.
Excuses are tools of the ignorantKnowledge is the enemy of fear
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@RedneckHB said:
@jmski52 said:
Oh, Bessent is taking a cool $trillion from the General Funds to buy back government bonds.Aside from the gross misappropriation of public funds, why are bonds such a crappy proposition that nobody besides coho and GF will deign to buy them?
Got precious metals?
Bonds paid me 3% over last 6 months and...my PMs, ehh, they didnt fare as well.
Cherry picking again lolzzz... how about 3 months SON? hahahaha
COPPER is gutter !
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@jmski52 said:
we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell 2017-20).From 1981 on, the massive move wasn't tightening. The massive move was from 15% to ZIRP over 40 years. That's your "massive move" and it wasn't too tough to make money in bonds > @softparade said:
@RedneckHB said:
@jmski52 said:
Oh, Bessent is taking a cool $trillion from the General Funds to buy back government bonds.Aside from the gross misappropriation of public funds, why are bonds such a crappy proposition that nobody besides coho and GF will deign to buy them?
Got precious metals?
Bonds paid me 3% over last 6 months and...my PMs, ehh, they didnt fare as well.
Cherry picking again lolzzz... how about 3 months SON? hahahaha
1.5% over last 3 months. Any more questions? It aint rocket science.
And BTW---you cherry picking again? Lolzz.
Its Sir Cornholio. Come on man, you can figure this out. I believe in you!!
Jackson Hole time!!
Excuses are tools of the ignorantKnowledge is the enemy of fear
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@RedneckHB said:
@jmski52 said:
we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell 2017-20).From 1981 on, the massive move wasn't tightening. The massive move was from 15% to ZIRP over 40 years. That's your "massive move" and it wasn't too tough to make money in bonds > @softparade said:
@RedneckHB said:
@jmski52 said:
Oh, Bessent is taking a cool $trillion from the General Funds to buy back government bonds.Aside from the gross misappropriation of public funds, why are bonds such a crappy proposition that nobody besides coho and GF will deign to buy them?
Got precious metals?
Bonds paid me 3% over last 6 months and...my PMs, ehh, they didnt fare as well.
Cherry picking again lolzzz... how about 3 months SON? hahahaha
1.5% over last 3 months. Any more questions? It aint rocket science.
And BTW---you cherry picking again? Lolzz.
Its Sir Cornholio. Come on man, you can figure this out. I believe in you!!
Jackson Hole time!!
You need to use more than your fingers. Try your toes too. 1.5% LOL try again son.
COPPER is gutter !
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@softparade said:
@RedneckHB said:
@jmski52 said:
we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell 2017-20).From 1981 on, the massive move wasn't tightening. The massive move was from 15% to ZIRP over 40 years. That's your "massive move" and it wasn't too tough to make money in bonds > @softparade said:
@RedneckHB said:
@jmski52 said:
Oh, Bessent is taking a cool $trillion from the General Funds to buy back government bonds.Aside from the gross misappropriation of public funds, why are bonds such a crappy proposition that nobody besides coho and GF will deign to buy them?
Got precious metals?
Bonds paid me 3% over last 6 months and...my PMs, ehh, they didnt fare as well.
Cherry picking again lolzzz... how about 3 months SON? hahahaha
1.5% over last 3 months. Any more questions? It aint rocket science.
And BTW---you cherry picking again? Lolzz.
Its Sir Cornholio. Come on man, you can figure this out. I believe in you!!
Jackson Hole time!!
You need to use more than your fingers. Try your toes too. 1.5% LOL try again son.
Sorry if you didnt fare as well. Maybe you should know more.
Excuses are tools of the ignorantKnowledge is the enemy of fear
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@GoldFinger1969 said:
@jmski52 said:
Post WWII was an economic boom until stagflation became an issue around 1975. For your entire career, the bond >market had the Fed's easy money policies to support it, so recommending a 60/40 portfolio was a no brainer in >retrospect.No, we had massive tightening cycles: Volcker (1979-82).....Greenspan (1987-90, 1994, 1996-98, 2004-06).....Bernanke (2007, 2013)......Yellen (2015)....Powell (2017-20).
The whole economic situation is different now. Interest on the national debt is cannibalizing the GDP to such an >extent that the economy has no hope of growing itself out of trouble. We are going to see money creation and >bailouts such that hyperinflation becomes a real possibility. And that doesn't even consider how $120 trillion in >unfunded liabilities will require even more money creation and currency debasement.
I don't see how you think that bodes well for bonds. Got gold & silver?Yes, I have them. But unless a collapse is happening in the next 10-12 years, they won't do much, IMO.
We can manage the debt/deficits if we just bend the cost curve down slightly with entitlements. AI will help as if it raises real GDP potential by 1% that will HALVE the debt costs in 20 years.
Love to see that but I do not see any political will to bend spending and cut entitlements.
Seems only an economic upheaval will force Congress to act.
Don't get too giddy on precious metals ivalue if that happens, people liquidate to eat and pay bills.
0
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