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Why in the world would you own bonds?

bridgewater.com

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Re: Why in the world would you own bonds?

#311

Post by randomopining »

iSnow wrote: post #268
rawtxapp wrote: post #49

Earlier quoted context omitted.

This was the part that caught my attention as well, it would be super interesting to see it play in real-time. For one, how would they even put capital movements controls on crypto? For example, I just have to remember my 12 word seed and I can hop on a plane to another country and my crypto comes with me. The other part is, wouldn't those capital controls be the last nail in the coffin of "we lost complete control o…

The fiat on/off-ramps are the choke points of the whole crypto world. Yes, you could use your BTC to buy Teslas and drugs, but that's it. You can't pay at the supermarket or on the web directly, it all goes through payment providers who are regulated.

Can you not just go p2p/otc with the crypto and buy a hard asset plus some paper fiat?

It’s like cash but even more effective for this purpose.

Re: Why in the world would you own bonds?

#312

Post by TuringNYC »

jplr8922 wrote: post #299

The more Dalio gets public, the more I'm doubting his game. His book ''principles'' is interesting, however with time its starting to look like an elaborate marketing plan. I have no doubt that he his serious about his principles and business culture, but there are second order effects to make everyting public. In the case of his firm culture (which claims to be an idea meritocracy), it will attract certain kind of p…

I see it as him trying to leave a positive legacy. He realizes he's done fantastically as an investor, is aging, and wants to leave a non-financial legacy to the world.

Re: Why in the world would you own bonds?

#313

Post by reader_mode »

DebtDeflation wrote: post #276

We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…

Crash or inflation ?

Re: Why in the world would you own bonds?

#314

Post by pc86 »

TuringNYC wrote: post #294
floor2 wrote: post #285

Earlier quoted context omitted.

It's great that you recognize professional investing isn't something you know a lot about. It's a bit concerning that people believe a hollywood movie has taught them how the industry works. Keep in mind how hollywood portrays "hackers" or "scientists" or "Russians" or whatever group is an outsider or opposition to the protagonist and realize they're doing the same to finance.

While clearly not all of Hollywood portrays the industry accurately, from my perspective the movie was incredibly reflective of the players in the space, and the dynamics. I worked in the mortgage/CDO/CDS industry for 10yrs during that period (2005-2015). If anything, the movie was too positive. There aren't as many players like Steve Carell's character who are worried about the world, they are usually worried about…

> Another very accurate movie: "Margin Call"

Jeremy Irons is fantastic in this film. The entire board room scene is amazing.

Re: Why in the world would you own bonds?

#315

Post by 1123581321 »

JoshuaLelon wrote: post #302
floor2 wrote: post #285

Earlier quoted context omitted.

It's great that you recognize professional investing isn't something you know a lot about. It's a bit concerning that people believe a hollywood movie has taught them how the industry works. Keep in mind how hollywood portrays "hackers" or "scientists" or "Russians" or whatever group is an outsider or opposition to the protagonist and realize they're doing the same to finance.

Related: Gell Mann Amnesia https://www.epsilontheory.com/gell-mann-amnesia/

This is sort of an inverse situation, as those with industry experience are recognizing truth in that scene and someone outside the industry is scoffing at it.

Re: Why in the world would you own bonds?

#316

Post by jgilias »

DebtDeflation wrote: post #276

We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…

The way I view it is this. Given inflationary currency, if the overall world market is actually going downwards for a prolonged period of time, say a few decades, the events having lead to this are of such magnitude that the return of my investments is very likely the least of my concerns.

Re: Why in the world would you own bonds?

#317

Post by JumpCrisscross »

nostrademons wrote: post #126
ZephyrBlu wrote: post #40

Earlier quoted context omitted.

I believe that every dollar the Fed has "printed" went into bonds because that is how the US financial system works. The government gets money from the Fed by selling them bonds in exchange for cash.

That's not how the U.S. financial system works. The government doesn't "get money from the Fed" - it gets money from the Treasury, which either collects it from taxes or issues government debt to raise funds. The Fed participates in open market operations, and one of the markets they participate in is the Treasury bond auction. But they participate in others as well: notably, they've recently been major participants…

> Fed participates in open market operations, and one of the markets they participate in is the Treasury bond auction

Actually, by law the Fed can't buy bonds from the Treasury [1]. It has to buy them on the secondary market.

[1] https://www.federalreserve.gov/faqs/money_12851.htm

Re: Why in the world would you own bonds?

#319

Post by SyzygistSix »

beforeolives wrote: post #192
JohnJamesRambo wrote: post #168

Earlier quoted context omitted.

The minute they try to impose those controls on crypto is the ultimate Streisand Effect moment that will confirm to everyone that they definitely need this asset. I suspect this is why they have avoided it so far.

> The minute they try to impose those controls on crypto is the ultimate Streisand Effect moment that will confirm to everyone that they definitely need this asset. I'm not convinced. Your scenario relies on people having some deep conviction about the value and usefulness of cryptocurrencies. I think that this is true only for a very small vocal minority of users/buyers. Most people just want to make easy money with…

No, they just have to have more faith in it than than other assets. Which becomes easier when states make moves indicating they have lost control.

Re: Why in the world would you own bonds?

#320

Post by phkahler »

DebtDeflation wrote: post #276

We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…

The 401k concept has created a demand/supply imbalance and will continue to do so until as many people start cashing out as putting in. Massive government spending and, low interest rates, and other incentives have also dumped a lot of money in the market. Once these demand-increasing trends end, it will be all over. I'm amazed at how long the fiction has been sustained.
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