Comments on: Bond Yields Free Fall http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 12:35:08 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: mddwave http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130996 mddwave Fri, 05 Dec 2008 18:20:10 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130996 It seems like interest rates required on bonds is a function of expected return on investment (relative to prime rate) plus some portion to account for inflation. It seems like investors have essential the same expected return on investment, but the adjustment for inflation has gone negative (deflation). It seems confusing. Groceries, Education, Medical are in inflation mode, whereas energy, housing, etc. are in deflation mode. All "the buyout I.O.U. money" would seem to cause inflation, but all interest rates periods seem to be indicating we are in deflation. It seems like interest rates required on bonds is a function of expected return on investment (relative to prime rate) plus some portion to account for inflation. It seems like investors have essential the same expected return on investment, but the adjustment for inflation has gone negative (deflation).

It seems confusing. Groceries, Education, Medical are in inflation mode, whereas energy, housing, etc. are in deflation mode. All “the buyout I.O.U. money” would seem to cause inflation, but all interest rates periods seem to be indicating we are in deflation.

]]> By: Melvis http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130859 Melvis Fri, 05 Dec 2008 06:04:46 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130859 Munis seem to be ok. I got 30 year NY Water Revenue bonds at 6.12% the other day. They are rated AA+ . Is anybody else buying long term Munis? I know that there is a risk down the road of high inflation but to get over 9% in tax-equiv. yield is hard to argue with, or is it? Munis seem to be ok. I got 30 year NY Water Revenue bonds at 6.12% the other day. They are rated AA+ . Is anybody else buying long term Munis? I know that there is a risk down the road of high inflation but to get over 9% in tax-equiv. yield is hard to argue with, or is it?

]]> By: John Pozzi http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130842 John Pozzi Fri, 05 Dec 2008 03:46:30 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130842 GRB settles the world's public debt - www.grb.net GRB settles the world’s public debt – http://www.grb.net

]]> By: karen http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130824 karen Fri, 05 Dec 2008 02:13:12 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130824 wally, did you nassim on charlie rose? http://www.charlierose.com/view/interview/9713 one of his many great comments, "Markets are stupid." wally, did you nassim on charlie rose? http://www.charlierose.com/view/interview/9713

one of his many great comments, “Markets are stupid.”

]]> By: mitchn http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130820 mitchn Fri, 05 Dec 2008 01:08:34 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130820 Sorry, clumsy fingers: Question is, what replaces it? (TBD by Bretton Woods 3/4.) Sorry, clumsy fingers: Question is, what replaces it? (TBD by Bretton Woods 3/4.)

]]> By: mitchn http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130819 mitchn Fri, 05 Dec 2008 01:07:33 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130819 @ Simon 5:54 Agree completely -- one result of this fiasco is the end of the dollar as the world's reserve curreny. Question is, what replaces it? (TDD by Bretton Woods 3/4.) Agg @ 6:53 Love TIPS here. Up 5% in a week or so with deflation on everyone's lips. Could be the "best" (risk/reward) investment of the next decade. @ Simon 5:54
Agree completely — one result of this fiasco is the end of the dollar as the world’s reserve curreny. Question is, what replaces it? (TDD by Bretton Woods 3/4.)

Agg @ 6:53
Love TIPS here. Up 5% in a week or so with deflation on everyone’s lips. Could be the “best” (risk/reward) investment of the next decade.

]]> By: Steve Barry http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130818 Steve Barry Fri, 05 Dec 2008 01:00:44 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130818 I said yesterday that I saw a short term market rout, because the 10 day MA on put-call was about to have downward pressure. That started...market fell today and so did the 10 day MA. This is very bearish as you are now further from a bottom, despite market fall. Tomorrow could see a massacre and of course that could be due to a horrible NFP. I said yesterday that I saw a short term market rout, because the 10 day MA on put-call was about to have downward pressure. That started…market fell today and so did the 10 day MA. This is very bearish as you are now further from a bottom, despite market fall. Tomorrow could see a massacre and of course that could be due to a horrible NFP.

]]> By: danm http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130817 danm Fri, 05 Dec 2008 00:55:40 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130817 Because if #2 occurs a good portion of the population will become poor and lose their job why wouldn’t you bet for #1? -------------- People were getting poorer with #1, they just didn't realize it until the fundamentals finally started kicking in. Because if #2 occurs a good portion of the population will become poor and lose their job why wouldn’t you bet for #1?

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People were getting poorer with #1, they just didn’t realize it until the fundamentals finally started kicking in.

]]> By: Mannwich http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130816 Mannwich Fri, 05 Dec 2008 00:53:12 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130816 @jmborchers: Keep repeating that along with the mantra, "there's no place like home, there's no place like home" and all will be well again with the world......... @jmborchers: Keep repeating that along with the mantra, “there’s no place like home, there’s no place like home” and all will be well again with the world………

]]> By: karen http://www.ritholtz.com/blog/2008/12/bond-yields-free-fall/comment-page-1/#comment-130815 karen Fri, 05 Dec 2008 00:48:20 +0000 http://www.ritholtz.com/blog/?p=11887#comment-130815 i always forget to look at nem. if it holds 28.88 (today's low was 29) it could gather more momentum to the upside. maybe the institutions will jump on it... the abx chart looks just as good or better, too, on the weekly and daily. $gold could be putting a handle on it's cup; i would like the miner's to take the lead here, however. i always forget to look at nem. if it holds 28.88 (today’s low was 29) it could gather more momentum to the upside. maybe the institutions will jump on it… the abx chart looks just as good or better, too, on the weekly and daily. $gold could be putting a handle on it’s cup; i would like the miner’s to take the lead here, however.

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