They should be rising as those who sell stocks seek something safer.On CNBC they said companies are calling on their credit lines to cover the anticipated business slow down. This causes banks to sell their AAA bonds for cash.Companies are preparing to batten down the hatches.(Cross posted on the METAR board.)
A more likely scenario is the holders of that debt are being forced to sell what they can sell, rather than --months ago-- having sold what should have been sold.
I'm not a bond person but somewhere else the view was that only treasuries are viewed as safe havens during times like this, corporate bonds and municipals tend to get fairly hard.People have been stretching to get yields and often see bigger yields in corporate bonds/funds and/or funds that have a mixture (i.e., BND). Those haven't done well. Today it didn't matter much:long term treasuries - Downshort term treasuries - Up, barelyGold - Downstocks - Don't ask.over last 6 months VGLT +14, BND +1 (not exactly a great comparison since one is long term and the other the entire market for the most part)People who are selling are going to cash or treasuries although today it seems like it went to cash?(Not sure if that was your question.)Rich
Those triple A bonds are extremely rare these days. There are only a handful of issuers. I thought treasuries were now double A.CNBC says its the banks and large financial institutions that are selling.
I wish I knew more but I saw some folks mentioning some weird activities going on and some places are moving to cash, maybe worried about another financial collapse? Anyone more knowledgeable out there?
I wish I knew more but I saw some folks mentioning some weird activities going on and some places are moving to cash, maybe worried about another financial collapse?My thought was more along the lines that they are getting ready to put cash into the market when they feel it's safer to do so.IP
They also say Munibonds took a hit. It can also people who depend on stock sales to cover expenses tapping bond reserves for cash.Gold prices are also falling.Very strange.
I scanned a currency trader blog and they also mentioned liquidity issues in the bond market along with stuff that meant nothing to me. They did feel a flight to the US dollar is occurring and there may be a prolong rally in the dollar.
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