The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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Kbg
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Re: The Bond Dream Room

Post by Kbg » Wed Mar 31, 2021 2:32 pm

mathjak107 wrote:
Wed Mar 31, 2021 1:48 pm
Even 6.5 years can be to long .

I know my other model I swapped for the pp is up this year .
The most conservative model is 25% equities with the bond side a total bond fund , a high yield fund and a very short term treasury bond fund .....

There is just no bottom in Tlt ...I stopped even trying to add more money to bring it back up ..

I have far more faith in gold
Reading your DT adventures infrequently it seemed you were buying the small dips and selling the small pops...that works until you catch a trend and then it doesn't work so great. TLT is in a definite downward trend. It could turn though, who knows.

If I've mischaracterized, apologies in advance.
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mathjak107
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Re: The Bond Dream Room

Post by mathjak107 » Wed Mar 31, 2021 2:35 pm

No , you have it right ..it was easy to trade when it went up as much as down ..you just ride the cycle over and over ...

But once in a trend it is very hard ... Tlt is down almost daily with a few exceptions..been like that since august.

I don’t short stocks but boy what a perfect candidate it was
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Re: The Bond Dream Room

Post by whatchamacallit » Wed Mar 31, 2021 8:55 pm

Looking at yields around the world I don't see the rate going much higher at all.

I actually think 30 year will be at 1.5% in a month.

I think 1 month bill is about to go negative and the market will get spooked.

Am I calculating it right that 30 year at 2.5% going to 1.5% would only be 24% capital gain? Seems like it should be more.

http://www.rrfinance.com/Fixed_Income/F ... .aspx?ID=2
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Re: The Bond Dream Room

Post by Kbg » Thu Apr 01, 2021 9:00 am

whatchamacallit wrote:
Wed Mar 31, 2021 8:55 pm
Looking at yields around the world I don't see the rate going much higher at all.

I actually think 30 year will be at 1.5% in a month.
Hard to say...we are now actually experiencing "real" materials shortages and if the infrastructure bill goes through shortages could get worse which is the main pre-requisite for serious inflation. In truth, I have no clue nor a strong opinion either way...but there are some differences this time around that haven't been in place for at least 20 years. Whether it becomes broad based inflation will be very interesting to see. In the housing sector there is serious inflation across the board in all building materials.

Printing money != inflation

Printing money + scarcity = inflation
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Re: The Bond Dream Room

Post by doodle » Thu Apr 01, 2021 9:33 am

Kbg wrote:
Thu Apr 01, 2021 9:00 am
whatchamacallit wrote:
Wed Mar 31, 2021 8:55 pm
Looking at yields around the world I don't see the rate going much higher at all.

I actually think 30 year will be at 1.5% in a month.
Hard to say...we are now actually experiencing "real" materials shortages and if the infrastructure bill goes through shortages could get worse which is the main pre-requisite for serious inflation. In truth, I have no clue nor a strong opinion either way...but there are some differences this time around that haven't been in place for at least 20 years. Whether it becomes broad based inflation will be very interesting to see. In the housing sector there is serious inflation across the board in all building materials.

Printing money != inflation

Printing money + scarcity = inflation
Inflation requires rising wages at some point. If those don't come in to undergird price increases then everything crashes again. As much as I would like to see the pot distributed more fairly, I don't think that's gonna happen.

We're definitely in some unfamiliar waters at the moment but unless the economy can be in some state other than inflation, deflation, prosperity, or recession I'm not sure what else to do when it comes to holding assets.

As has been said before...this might be the everything bubble..where do you hide from that?
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Re: The Bond Dream Room

Post by Kbg » Thu Apr 01, 2021 12:40 pm

doodle wrote:
Thu Apr 01, 2021 9:33 am
Inflation requires rising wages at some point. If those don't come in to undergird price increases then everything crashes again. As much as I would like to see the pot distributed more fairly, I don't think that's gonna happen.
Happening...https://www.bls.gov/opub/ted/2021/real- ... y-2021.htm

Of note, not nominal, real.

Completely anecdotal, but the $15hr min wage battle is almost silly now except for the smallest of low end businesses. If you aren't small or low end, most are way beyond $15.
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Re: The Bond Dream Room

Post by mathjak107 » Thu Apr 01, 2021 1:57 pm

The problem we saw in nyc is it wasn’t only about the 15 dollar increase in min wage ...it was having long term employees who advanced , worked hard and learned new skills and made it to 15 an hour .

Now the new guy is at 15 and many companies has to raise the other workers too down the line.

Many fast food places now have a staff of 2 at the counter instead of 4 or 5 ...all ordering is via kiosk and all they do is take money .

Many min wage jobs have been totally eliminated....
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Re: The Bond Dream Room

Post by pp4me » Thu Apr 01, 2021 2:40 pm

No idea how minimum wage became part of a discussion about Bonds but for my two cents worth, minimum wage laws are about competition for low paying jobs and most of the laws on the books are intended to favor labor unions by limiting competition. Which is why Democrats overwhelmingly favor them, of course.

As many people before me have said, the real minimum wage is $0 if you don't have the skills to compete for one of the minimum pay jobs.

Here in Florida a $15 minimum wage law was passed by the voters. I didn't vote for it but it must have made a lot of people feel good about themselves. Everybody should make at least $15/hour don't you think?

But why not $20?. That would be even better. Probably wouldn't have passed because most people would have thought that was too much. But $15 was just right.

Can we vote on how much politicians should be paid?
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Re: The Bond Dream Room

Post by sophie » Thu Apr 01, 2021 3:20 pm

I expect that a $15 minimum wage law would result in lots more people being hired for cash under the table. Maybe that's part of the intent, because that's how illegal immigrants can live here without any official presence. And God knows we're now getting a ton more of them.

Good one pp4me. The real minimum wage is indeed $0. $15 will only be if you want to join a union and pay taxes.
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Re: The Bond Dream Room

Post by Kbg » Mon Oct 10, 2022 3:40 pm

Thought I would resurrect this as much that seems to be a former part is now spawning many new threads.

Anyway, looks like TSP G fund is at 4% now

https://www.tspfolio.com/tspgfundinterestrate
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Re: The Bond Dream Room

Post by dualstow » Wed Aug 30, 2023 8:07 am

From the Financial Times, last week, print version:
It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to col- lect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writ- ing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond stated that in return for the loan, the merchant would receive a 5 per cent interest payment every year-for ever.

Although the terms of this so-called "perpetual" bond have changed over centuries of wars, depressions, revolu- tions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University's Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment.

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Re: The Bond Dream Room

Post by Smith1776 » Wed Aug 30, 2023 9:09 am

dualstow wrote:
Wed Aug 30, 2023 8:07 am
From the Financial Times, last week, print version:
It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to col- lect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writ- ing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond stated that in return for the loan, the merchant would receive a 5 per cent interest payment every year-for ever.

Although the terms of this so-called "perpetual" bond have changed over centuries of wars, depressions, revolu- tions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University's Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment.

Dang. Cool.
I still find the James Rickards portfolio fascinating.
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Re: The Bond Dream Room

Post by Xan » Wed Aug 30, 2023 9:31 am

Smith1776 wrote:
Wed Aug 30, 2023 9:09 am
dualstow wrote:
Wed Aug 30, 2023 8:07 am
From the Financial Times, last week, print version:
It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to col- lect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writ- ing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond stated that in return for the loan, the merchant would receive a 5 per cent interest payment every year-for ever.

Although the terms of this so-called "perpetual" bond have changed over centuries of wars, depressions, revolu- tions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University's Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment.

Dang. Cool.

Very cool. But... he went all the way to the Netherlands for a €136 payment?
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Re: The Bond Dream Room

Post by Smith1776 » Wed Aug 30, 2023 9:57 am

Xan wrote:
Wed Aug 30, 2023 9:31 am
Very cool. But... he went all the way to the Netherlands for a €136 payment?
Hopefully he got a nice vacation out of it!
I still find the James Rickards portfolio fascinating.
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Re: The Bond Dream Room

Post by dualstow » Wed Aug 30, 2023 1:28 pm

Xan wrote:
Wed Aug 30, 2023 9:31 am
Very cool. But... he went all the way to the Netherlands for a €136 payment?
😂 Good point. Doesn’t even cover the flight!
Yeah. What Smith said.
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