101–110 of 356 posts
So treasures yield 3%. Why can’t I just buy these bonds and get a 3% rate? What am I missing? https://www.cnbc.com/amp/2022/04/19/us-bonds-treasury-yields...
> Why can’t I just buy these bonds and get a 3% rate? What am I missing? Savings accounts can be drawn with zero notice. They're essentially rolling overnight. A 10-year Treasury cannot be redeemed before 10 years. (It can be sold, though at the market's whim with respect to price.)
Print 50% of all existing USD in less than two years, then see rates go up up up. Color me surprised.
Americas anual GDP was $21t in 2020. Federal COVID relief funds were 4.6t over the span of 2 years according to https://www.usaspending.gov/disaster/covid-19?publicLaw=all That's just over 10% of the GDP. Not a small amount by any measure but our numbers are rather different. What am I missing?
Right before the 2008 downturn, I had an ING Direct (now Capital One) savings account, at that time with an APR over 8. At once point in the early 2000s it was doing a hell of a lot better than that. It never recovered. I never saw that rate go above 1% ever since.
I always wondered why there was seemingly no (marketed) business in foreign savings accounts. If I'm willing to ride the exchange rate risks, surely there's some bank in Honduras paying a higher rate on Lempira-denominated accounts. Compared to half the derivative products on the market, it's a straightforward offering, and it also feels an ideal product for flim-flam direct-to-consumer marketing-- backed by "governm…
Can't you just skip the hassle and just buy foreign bonds from the market?
Its not too difficult to buy international bond funds. For example, SDEU (iShares German Government Bonds).
Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?
Have a diversified portfolio. Rational Reminder went over the data in "The Ultimate Inflation Hedge": > Is it possible to hedge your investments against different levels of inflation? This is the question we ask in today's episode, as we run through a variety of different investment approaches and commodities. While the answer may not come as a huge surprise, it is definitely worth the walk-through and getting to gri…
Earlier quoted context omitted.
Based on the market a lot of people believe “buy some real estate” is the solution. But that bubble IMHO is about to pop. Maybe look into interest protected bonds? https://www.treasurydirect.gov/indiv/products/prod_ibonds_gl... Personally I have been just spending what I make assuming saving is moot right now (besides 401k and espp)
> Based on the market a lot of people believe “buy some real estate” is the solution. But that bubble IMHO is about to pop. I fear we're gonna move to an Australian-style real estate market. Never-ending boom, impossibly high prices for first-time buyers. People have predicted its collapse for 40 years or so, to no avail.
Weird timeframe to claim nothing happened. They collapsed twice since then: 35 years ago and 13 years ago.
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I think rising interest rates should depress the value of housing. With a higher interest rate you can't afford as much principal so you start bidding on cheaper houses.
I had this debate last night. Where i'm undecided is if this works when a housing market is propped up by cash. Eg both houses and land purchases (something i'm trying to do) are quite a difficult market due to cash offers being consistently present. Ie a new family won't have 500k in cash and their loan offer isn't as good as a cash offer. It happened to me several times when i was buying my home ~6 years ago, 250k…
Houses are thought to be worth X. One house is available and one labor-rich renter buys it for 2X. This is now the market price of a comparable house. Two houses are available and their owners swap. This is a cash transaction at the same 2X price.
Earlier quoted context omitted.
> Based on the market a lot of people believe “buy some real estate” is the solution. But that bubble IMHO is about to pop. I fear we're gonna move to an Australian-style real estate market. Never-ending boom, impossibly high prices for first-time buyers. People have predicted its collapse for 40 years or so, to no avail.
> People have predicted its collapse for 40 years or so, to no avail. Weird timeframe to claim nothing happened. They collapsed twice since then: 35 years ago and 13 years ago.
Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?
You think this is a crash?!
I always wondered why there was seemingly no (marketed) business in foreign savings accounts. If I'm willing to ride the exchange rate risks, surely there's some bank in Honduras paying a higher rate on Lempira-denominated accounts. Compared to half the derivative products on the market, it's a straightforward offering, and it also feels an ideal product for flim-flam direct-to-consumer marketing-- backed by "governm…
You don't think savings accounts yield interest out of charity, do you? In most cases they are a way to purchase bonds and alike for people who don't want (or don't know how) to deal with that, and the bank pocketing the difference for their services. If you're sophisticated enough to invest in a foreign country with a goal to actually get real returns and enough capital to make the hassle worthwhile, you'll find a w…
Yeah and banks basically gave up on buying corporate bonds and only want treasuries or reserves. QE is basically a way to let banks use your savings account to buy treasuries. The commercial bank is making the decision on what to invest in, not the Fed. The Fed is actually just giving commercial banks as many reserves as they request.