What's w/30 Treasuries?

[Russ H]

Anyone been watching the roller coaster ride of 30 T-bills?

They've hovered around 4 +/- for ages.

I understand that after last Sept, folks were ready to get *much* less interest (flight to quality), so they bounced down to the 2's and stayed there for a bit.

In the past few days, it's popped back up to over 3 (a 15% increase in just a few days).

Any analysis?

-Russ H.

 

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[randallg99]

Anyone been watching the roller coaster ride of 30 T-bills?

They've hovered around 4 +/- for ages.

I understand that after last Sept, folks were ready to get *much* less interest (flight to quality), so they bounced down to the 2's and stayed there for a bit.

In the past few days, it's popped back up to over 3 (a 15% increase in just a few days).

Any analysis?

-Russ H.

I am waiting for Bill Gross to announce that he reduced alot of his exposure to the bond market any day....

lots of dollars invested in treasuries saw the most unexpected, most unlikely and probably the most pleasant surprise they ever imagined: a nice 10% jump in price which equals 3 to 4 years worth of interest. Selling bonds and converting into cash is prudent strategy. Bond bubbles are very painful to big money institutions....

I was in the same quandry just yesterday figuring out if I should sell several of my holdings after just buying them recently as long term holdings for purposes of income producing.... bought in the past month... captured huge dividends on a couple and have nice, unexpected appreciation (SFL, OCNF, CMO, AGNC, VNR) ... within a month, my port went up a solid 30%. This is probably the largest jump I have ever had since the tech bomb...

so what to do? I am happy going all cash now that I almost tripled my goal for the year in the very first week of trading in the new year.... but, there's always a but....

so the big question is where that bond money is going.... the shift may have just started going back in to equities and if this theory proves true, then hold on for a fast ride up

vs. S & P:

^TYX: Summary for 30-YEAR TREASURY BOND - Yahoo! Finance

just my opinion

 

[Russ H]

Thanks, randallg.

30% ROI in the first week of the year?

Hoo-ah! :banana:

-Russ H.

[ame=http://www.youtube.com/watch?v=DMdQcfe424w]YouTube - Al Pacino - Hooo Haaas[/ame]

 

[randallg99]

I have been doing exceptionally well in one of my trading accounts... between VNR (my only hold), CMO, ANH, OCNF, DRYS among a couple of others, I have been playing the markets like a fiddle.... the volatility is unreal and trades are sometimes lasting only a couple of hours after I put in stop limits and triggers. It's just been too dangerous to keep money in the markets... a meltdown can happen any second.

 

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[Russ H]

OK, so 30 year T's cracked 4% today.

A sign that money may be moving back into the markets-- and away from T-bills?

-Russ H.

PS Randall, how "up" are you for the year? (care to share?) Totally cool if you don't-- just curious.

 

[MJ DeMarco]

I went to a fixed income investment workshop today and they advised what I already knew; stay away from Treasuries. They are, and have been, like 5th on my list of investments. GNMA's were the talk of safety and decent yield, not surprising I've been in them for months.

If you're looking for yield w/safety ...

GNMA
Munis
Investment Grade Corporates
CD's
Treasuries are dismal 5th.

 

[randallg99]

I was surprised investment grade corps & Munis (especially munis) are above CD's in terms of saftey/reward.... what was their justification?

muni's are running out of money and shortfalls are already going bonkers.

there is still rate risk in GNMA as soon as everything is peachy again but as far as saftey is concerned, ginnies are too important to fail... gov't wouldn't let it happen so I agree it should top the list.

we just saw corp bond holders get screwed ala GM style.... 90% haircut! faith in corp debt is getting thrown out the window.



Russ- my trading account has done very well this year. I haven't doubled, but keeping stop losses in place and writing calls whenever possible makes the account go ka-ching.... the caveat is that I have to give it a lot of attention.

For our fastlane master group, I chose the path of trying to make cash from my trading. I haven't exactly met my goal on a consistent basis since my businesses (and a couple of short trips) are demanding a lot more of my time.

 

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[MJ DeMarco]

I was surprised investment grade corps & Munis (especially munis) are above CD's in terms of saftey/reward.... what was their justification?

Default rates on muni's are .007% with a 70% recovery rate. Even in today's budget crisis', I find it highly unlikely municipalities will default on their bonds and even so, recovery is likely.

Corporate debt was lauded only assuming if you buy the right bond (not a bond fund) but an individual bond. Obviously, if you buy a GM bond or a fund invested in GM bonds, suddenly the risk is intolerable.

Like stocks, you look at companies issuing bonds with the propensity to pay -- examine their balance sheet and look for factors that show liquidity -- free cash flow.

 

[andviv]

Short answer: Inflation?

I'm not expert at all in this topic. Heck, I barely understand it. But these are indicators to me that inflation is actually happening and just not being reflected by the CPI and PCI (which I never really trust as I studied the way they are calculated and they are just a fake number).

 

[Russ H]

30 T Bills get to 4.5%

Analysis?

Other vehicles?

Heard a great Groucho Marx quote the other day. Groucho was touring Wall Street and someone asked him where he invested his money.

He replied, "All in Treasury bonds."

"But they don't make any money!" the inquisitor said.

Groucho replied, "They do if you have enough of them."

-Russ H.

 

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[randallg99]

Treasuries Fall for First Time in Six Weeks as Stocks Advance - Bloomberg.com

 

[Russ H]

Yields show central bank efforts to unfreeze credit markets are working. The Libor-OIS spread, which measures banks’ willingness to lend, narrowed to 31 basis points, from a record 364 basis points in October.

The average 30-year mortgage rate dropped to 5.14 percent July 16 from 5.20 percent in the week ending July 9, according to mortgage buyer Freddie Mac of McLean Virginia. That’s the third consecutive weekly decline.

Wow, this was some news I didn't know about.

Thanks.

-Russ H.