Questions tagged [government-bonds]

for questions that relate to government bonds. It is recommend you use a country tag or state what country you are referring to. A government bond is a bond issued by a national government, generally promising to pay a certain amount on a certain date, as well as periodic interest payments.

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1answer
60 views

10 year treasury constant maturity rate explained

The 10-year treasury constant maturity rate over 2019 fell from a Max of 2.75 to a Min of 1.50 with an average of 2.15. I want to check whether my understanding of what the figures and the 10-year ...
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1answer
50 views

How customary are for European governments to sell government bonds online directly to individuals?

The State Treasury (under the helm of the Ministry of Finance (and not the Central bank as it is sometimes in the other countries)) issues the government bonds for the Republic of Latvia and in the ...
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1answer
116 views

Redeeming minuteman savings stamps the old-fashioned way?

We just found in our house two books of 10¢ Minuteman stamps, face value $2.90.  I see that they are sold as collectibles for a wide range of prices. But I am curious whether there is still some ...
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3answers
136 views

On a statement of Dalio and the case for gold

Last night I was watching the following videos https://www.youtube.com/watch?v=YVLJRGA5uAk and https://www.youtube.com/watch?v=AhDrvQiNV5M&t I am considering the bet on gold with respect to his ...
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1answer
112 views

Why have treasury prices risen despite increasing interest rates since the Great Recession?

ETFs that track treasuries have risen despite the fact that the global economy has stabilized since 2008 and interest rates have risen (from near 0 to ~1.5%) My (very simplistic) understanding of ...
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0answers
65 views

As a Indian Citizen how can I transfer my savings to Singapore

Indian economy is very volatile right now. Central bank is taking the heat and its showing in the notifications it's putting up. One of these mind wrecking notification came up for PMC bank where a ...
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0answers
62 views

To know if I want to hold Municipal Bonds, I want to know the percent of unfunded pension liabilities ($3.8T) to total state and local gov liabilities

I'm pondering whether or not to hold Municipal Bonds in my portfolio. My concern is that Municipalities seem to be stressed because unfunded pension liabilities keep growing and this seems alarming. ...
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2answers
76 views

“Holding the trade” in fixed income arbitrage

From TIPS v Treasuries: What a wild ride it was! Receiving 5% on one US Government Bond and paying 2.5% on another US Government Bond with the same maturity is an obvious winner, but many hedge ...
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1answer
69 views

Are Muni REVENUE bonds secured or can the local gov. use the revenues for other purposes not paying the bond holders if its going bankrupt?

Municipal bonds are of two kinds: GO (General Obligation) Bonds or Revenue Bonds. My question on Revenue Bonds is: are the revenues from the specific project secured or can the local government use ...
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2answers
4k views

Are treasury bonds more liquid than USD? [closed]

Does it make sense to say that, in a way, US Treasury bonds are more liquid than USD? I think this because the value of all the bonds in circulation is way greater than all the dollars in circulation, ...
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4answers
188 views

Which yield curve is inverting?

All over the news I read that the yield curve is inverting. I thought they were talking about the US Treasury Bond yield curve. This seems to be the case when I read this article. However there are ...
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2answers
212 views

Why would zero-coupon perpetuity not be worthless (simple enough so grandma understands)

The context is the negative yielding treasuries in Europe (Germany). Here is a quote I found on the matter: Why would a zero-coupon perpetuity not be worth exactly zero? Because its nominal value ...
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4answers
137 views

Locking in rates during yield curve inversion

While reading multiple articles about yield curve inversion, a common theme is that investors seeing an economic slowdown in the future which generally means lower interest rates so they want to lock ...
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3answers
257 views

Why would one buy a bond with negative rate? [duplicate]

I see presently that many countries outside the U.S. have negative rate government bonds. So you buy one for $101 and in 5 years you get $100 back (face value). (I picked numbers for simplicity). I ...
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2answers
187 views

US treasuries yield on economy news

When looking at say Bloomberg or CNBC news on televison, one often sees different yields for US treasuries pop up. I.e What does this represent? I.e how are these numbers determined? It cant be ...
2
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1answer
188 views

Understanding UK Gilt

I have been reading about UK Gilt and have some questions understanding it. For instance, the TREASURY 3,3/4% 2019 Gilt has a coupon of 3.75%. The maturity date is September 7th 2019. Interest is ...
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1answer
195 views

How does Massachusetts tax selling US Treasury Bills before maturity?

If I buy a 4-week US Treasury Bill at auction and hold it to maturity, the interest I earn is state-tax-free. Just to put a number on it (even though I know rates aren't actually that high right now), ...
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2answers
55 views

Leveraging macroeconomic trends

Let's say I have strong reasons to believe that an economic sector of a particular country will increase/decrease in the next few years. How can I leverage this information financially? Should I ...
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2answers
283 views

Is there a catch in investing in treasuries close to maturity date?

Is there a catch to invest to treasuries close to maturity date? I don't want to lock the money for a long time, b/c the interest rate probably will go up. But I am concern that it's not that simple. ...
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4answers
150 views

Elementary question about emergency fund and US Treasurys

Consider the following strategy for maintaining an emergency fund: continually reinvest ~$40k in 1-month US bonds at ~2.5% APY pay up to ~$10k using credit cards in case of emergency pay off credit ...
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2answers
413 views

Why don't investors in negative-yielding government bonds put money in positive-yielding government bonds instead?

According to this news article, USD10 trillion has been put into negative-yielding long-term government bonds. https://www.ft.com/content/b131da2e-4f02-11e9-b401-8d9ef1626294 Why don't these ...
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2answers
67 views

Mutual Fund or Municipal Bond

I am new to this Bond's so, I am not sure which one is a good investment like state or federal bonds? Is it worth to Invest now?
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9k views

Can an American birth certificate be redeemed for money?

Can an American birth certificate be redeemed for money? Why is it printed on bond paper?
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2answers
43 views

How does the price of a long term treasury bond effect the value of your investment?

The most important thing to point out about bonds is their interest rate and face value fluctuate like a see-saw, when interest rates are high the face value is lower, when the face value is high the ...
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4answers
248 views

Understanding bond ETFs

I am failing to understand the bond ETFs. I somewhat understand stock ETFs: ETFs own stocks, I buy a part of ETF, therefore, I also indirectly own stocks. When I sell my share of ETF, the ETF gets ...
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1answer
86 views

Treasury bond yield

I am trying to learn about valuation and yields for treasury bonds. For the Treasury Bond maturing on 11/15/2018, initially sold in 1988 with a 9% coupon, it states that the yield to maturity is 1.66%....
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0answers
38 views

Buy shares and bonds in non citizens countries

I am from Sri Lanka and I invested in stock market and bond in Sri Lanka. But I really like to buy other countries shares and bonds. Is it possible to buy those thing without citizenship. I know ...
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5answers
8k views

Why invest in long term government bonds when the yield curve is inverting?

The New York Times has noted that the US is heading toward an inverted yield curve, which is one of the precursors for a recession. The yield curve is said to be inverted when long term government ...
4
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1answer
106 views

Which particular 10-year note does the daily 10-year treasury note yield refer to?

Question might be a bit obscure. The yield of the 10-year treasury note is reported daily on TV and in the papers. Since there are notes with different maturities in circulation, also more importantly,...
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1answer
88 views

Easy ways to hedge against debt overleverage and potential inflation as a personal economic agent

Every prediction is correct... at some point in the future. However, there are economical indicators that would be considered teaching points if a financial crisis were to occur at any point in the ...
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1answer
111 views

Asset Allocation, Risk Free Part with Negative Yielding Bonds

I read a few books about asset allocation, e.g. Bernsteins's Asset Allocation states that mixing bonds with stocks lowers the risk significantly but only decreases the profit slightly. So there is a ...
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2answers
300 views

Why are some medium term UK government bond (gilt) prices seemingly so disparate?

Looking at UK government bond prices and picking out one example of what I mean: Coupon Maturity Trading price Treasury 8% 2021 8 07-Jun-21 123.08 Treasury 4,3/4% ...
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1answer
67 views

How bidders determine price for T-bills?

Let's take for example 4 week T-bill issued today, 3/1/2018 (https://www.treasurydirect.gov/instit/annceresult/press/preanre/2018/R_20180227_1.pdf). Price of t-bill is determined on auction by ...
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1answer
230 views

Correct interpretation of side-by-side graphs of intra-day fluctuations of stocks and bonds

At the end of the day on Tuesday, February 6, 2018, a snapshot of the Dow and 10 year Treasuries was as below: At the dip of the stock market on Tuesday, there was also a dip in the yield of the 10-...
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1answer
79 views

Are T-Bills “coupon equivalent” rates based in annual terms?

According to treasury.gov, the "coupon equivalent" for a 1 month (4 weeks) T-Bill issued today is 0.99%. I happened to have purchased a 1 month T-Bill today for $99.9246. By my calculation that ...
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1answer
785 views

Understanding bond margin, carry trade fundamentals

US Treasuries that have less than 6 months till maturity allow for 100x leverage, as the regulatory requirement is to put 1% of the market value down for each bond. So a $1,000,000 account could hold ...
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1answer
56 views

What causes US Treasury I bond fixed interest to increase? [closed]

I've been reading about Series I Savings Bonds on treasury direct. It seems that the return on an investment is given by the composite rate which is given by the formula: Composite rate = [fixed rate ...
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1answer
125 views

Yield curves and Bonds

Just struggling with putting the two together and google seems to be failing me. (1) Are the yields on yield curves annual continuously compounded rates, effective rates or something else like a "...
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1answer
567 views

What happens when I buy Continuously-Callable bonds

I am looking at this bond: ILLINOIS ST GO 5% 04/01/2028 Callable (452152K59) Continuously-Callable on 07/04/2017 @ 100.00000 The price of this bond right now is $100.05000 (YTM=4.993%). In ...
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1answer
153 views

Bond ETFs as a means to achieve risk parity

Background One of the investors that I really look up to is Ray Dalio. He has stated that a 50/50 stock to bonds allocation does not acheive risk parity because 80% of your risk is still in your ...
3
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1answer
184 views

Does taxation of Treasury Inflation Protected Securities (TIPS) undermine their function as protection against inflation?

From this document from Vanguard: TIPS are taxed in a slightly different manner than conventional Treasury bonds. The periodic inflation-based “gross-up” in the principal of TIPS is taxed at ...
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1answer
101 views

Should I Be Worried About A Government Default? [closed]

Is this actually true and if so, should I be worried about a default since I own quite a few US bonds? I can't see how this is sustainable at all. I asked my financial adviser and she laughed. What ...
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2answers
413 views

Why is the yield to maturity of a long-term STRIP typically lower than that of a short-term STRIP?

Why is the yield to maturity (YTM) of a long-term STRIP typically lower than that of a short-term STRIP?
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3answers
9k views

Bought agency bond (FANNIE MAE 0% 04/08/2027), now what?

I just bought 15 of these for $10,677 through my brokerage firm. It says 3.3% interest. I have no idea how this works. But I trust it is gov bond and will pay 3.3%. Can anyone explain how it works? ...
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1answer
504 views

How do I short government bonds?

Perhaps it's because I've just watched The Big Short, but I'm bearish on Italian Government bonds right now. How would I go about shorting government bonds?
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3answers
1k views

Do governments support their own bonds when their value goes down?

I'm far from expert in finance, so please bear with me. It's my understanding that a company who issued stock typically support it when the stock price go down. Does the same thing happen with ...
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2answers
219 views

Explain this passage from The Intelligent Investor?

Reading The Intelligent Investor and came across a passage (pg 48) which I felt I couldn't fully grasp. I'd appreciate it if someone could explain it using simpler language: Toward the end of 1971 ...
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1answer
118 views

Does it make any sense for UK private investors to hold gilts directly and outside of a tax wrapper?

According to my understanding of gilts (which is in accordance with the answers here), private investors in UK gilts paying a premium on the redemption price (for example 2% T20s currently report a ...
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2answers
1k views

How to read bond yield quotes? What do the time, coupon, price, yield, and time mean?

I am newbie in finance and I recently saw Bloomberg bond yields quoted as follows: Can anyone specify what "1 month" and "1 year" mean? What do coupon, price, yield and time (EDT) mean?
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2answers
1k views

How do UK Gilts interest rates and repayments work?

I'm looking at UK Gilts and trying to understand how the interest rates and repayments really work. As I understand, if I buy £100 of a "5% Treasury Gilt 2020" it means I will get 5% interest each ...