At 1.43%, July 25th was the worst possible day in 2012 to buy a 10-year treasury.
Where are the losses for those who bought it?
Not only did they earn considerably more interest than those sitting in 3-month treasury bills, but they could sell their current treasury bond today for a slight profit (since 4 years have elapsed it's only a 6-year bond now). The 5-year yields just 1.07% right now.
With all due respect, not much of a bond bear market in 10-year treasuries if cherry picking the starting point can't even generate a loss.
What are the odds that USTs are in a bear market while the bull in global bonds (JGBs, ECB debt) is hitting new lows?
ReplyDeleteWhy isn't UST in negative territory for same safe haven reasons?
Well, they are all separate credits.
ReplyDeleteMaybe the fundamentals of USTs are just so bad that they can't keep up with the Swiss and such.
At 1.43%, July 25th was the worst possible day in 2012 to buy a 10-year treasury.
ReplyDeleteWhere are the losses for those who bought it?
Not only did they earn considerably more interest than those sitting in 3-month treasury bills, but they could sell their current treasury bond today for a slight profit (since 4 years have elapsed it's only a 6-year bond now). The 5-year yields just 1.07% right now.
With all due respect, not much of a bond bear market in 10-year treasuries if cherry picking the starting point can't even generate a loss.
As a side note, I will grant you that real purchasing power is in bear market territory.
ReplyDeleteI'm not heckling. I'm simply saying that lousy "safe" returns can get even worse.
Put another way, I have not expected nor do I currently expect the Fed to reward savers soon. The economy is far too fragile for that. :(
Would be nice to know: is the bond bull market over, or not?
ReplyDelete