One thing that has interested me lately is bond yield spreads between treasuries and munis, corporates, etc.
It seems to me that anytime there is prosperity, spreads will tighten. Any time there is fear or recession of some sort, even if it's as a result of governmental instability, wouldn't yied spreads almost surely expand? Especially with a fiat currency, one would think that the government's ability to borrow, tax and print is ALWAYS going to eclipse corporations and local governments, and therefore be a more guaranteed return.
I just want to understand spreads a bit better because that's part of the key of LTT's and probably why they didn't get hit as hard as we would have expected from 1972-1981 (CAGR ~2.8% if memory serves). During that recessionary time, bond yields were rising overall, but treasuries were probably rising the least out of any dollar denominated bonds due to the fact that they were still a safer investment in times of corporate losses.
Bond Yield Spreads
Moderator: Global Moderator
Bond Yield Spreads
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine