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Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

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Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#101

Post by IrishTechie »

downrightmike wrote: post #96
loeg wrote: post #34

US 10- and 30-year bonds are trading at their highest yields (lowest prices) since, uh, August/September 2025. Or in historical context, rates that were more common before 2007 and the ZIRP period.

Which explains why the DOJ is going after the FED for not lowerign interest rates. They assume ZIRP will solve their problems, but that just kicks the can down the road, and it won't go far this time. Even Japan, which was our model for yield curve control has abandoned that theory. Bunch of dumb people running the room and no experts.

Don’t think they’re dumb, their goals are just shorter-term, they need to juice the numbers before the next election cycle.

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#102

Post by abdullahkhalids »

toomuchtodo wrote: post #33
loeg wrote: post #29

Earlier quoted context omitted.

Which nation states might you consider more politically stable than the US, even now?

https://www.cfr.org/trackers/cfr-sovereign-risk-tracker https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...

On the first page, I see 9 countries which it claims have a default risk of 50% or higher in the next 5 years. Which means a probability of at least 1-0.5^9=0.998 that at least one of them will default.

That's a crazily high confidence prediction. What is their track record? What did they predict 5 years ago and how did those predictions bear out?

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#103

Post by randerson »

reducesuffering wrote: post #99
HWR_14 wrote: post #97

Earlier quoted context omitted.

The US will pay its debts in USD and the German government will pay its debts in Euros. If you think the euros to dollar exchange rate will be better in the future, it can easily dwarf the difference in interest rate between the bonds.

How does that practically work out in selecting bond investments though? Betting on receiving euro coupon payments would look like buying BNDX over BND. But in the last year, while the Euro appreciated ~12% over the Dollar, $BND is up ~3% while BNDX is down ~1%.

International Bond ETFs are normally dollar-hedged. There are some unhedged ones that are in the local currencies and better at tracking foreign exchange rates. e.g. BWX is an unhedged international treasury fund.

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#105

Post by downrightmike »

zppln wrote: post #9

What are some realistic alternatives to US markets here? Selling is one thing, the question is what to buy instead? I mean, everyone starting to buy european instead would be great for stock prices, but it wouldn't make the underlying assets more valuable, right?

Same thing that happened to Spain after the New World gold and silver came in, Inflation (limited local supply to spend on and so prices raise) and debt payments, ultimately leaving Spain poor.

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#106

Post by hadlock »

downrightmike wrote: post #96
loeg wrote: post #34

US 10- and 30-year bonds are trading at their highest yields (lowest prices) since, uh, August/September 2025. Or in historical context, rates that were more common before 2007 and the ZIRP period.

Which explains why the DOJ is going after the FED for not lowerign interest rates. They assume ZIRP will solve their problems, but that just kicks the can down the road, and it won't go far this time. Even Japan, which was our model for yield curve control has abandoned that theory. Bunch of dumb people running the room and no experts.

The only goal right now for a lot of people in Washington is to make "Number Go Up" ahead of November. So far the current strategies haven't been working, so they're going to have to get a lot more aggressive. Medium and long term consequences are a problem for the future.

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#107

Post by piva00 »

loeg wrote: post #61
coredev_ wrote: post #39

Earlier quoted context omitted.

I'm a bit baffled by this - are you saying that you can't identify a single market in the whole world that is worth to invest in & stable except US? Also I don't see that EU as a whole is on a downward trajectory, there are a lot of areas that are super strong, one being the defence industry. US on the other hand - who wants to invest in or trade with them when they treat the rest of the world (including close friend…

Not "worth to invest in," just the higher criteria GP asked for: "a more politically stable nation state." It has to be strictly more stable than the US, not just investable.

Switzerland is usually the gold standard for politically stable.

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#108

Post by KellyCriterion »

christkv wrote: post #38
onraglanroad wrote: post #3

What would be more serious is if the Norwegian Government Pension Fund started to sell off US investments. That runs around $2 trillion.

You have no idea how that would destroy the Norwegian State. They are addicted to money from that fund. A collapse in it's value would have direct impact on the finances of the state. Nearly 1/4 of the budget is funded from that found a year.

The contribution of the State Fund to national pensions is around 20-25% to the state expenses

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#109

Post by jacquesm »

zppln wrote: post #9

What are some realistic alternatives to US markets here? Selling is one thing, the question is what to buy instead? I mean, everyone starting to buy european instead would be great for stock prices, but it wouldn't make the underlying assets more valuable, right?

Eurobonds. It may actually happen if this continues. But given the speed of the usual EU decision process I would not be surprised if it takes them longer than the current US administration to finally agree on the various terms. And that's good for Europe in multiple ways.

https://commission.europa.eu/strategy-and-policy/eu-budget/e...

In the meantime: German, Dutch, UK (technically not EU), Swiss, Nordic paper is also a good substitute and regardless all you really want to do here is not to hold an asset that may well become a liability so in that sense almost anything is better.

Re: Swedish Alecta has sold off an estimated $8B of US Treasury Bonds

#110

Post by jacquesm »

kasey_junk wrote: post #54
coredev_ wrote: post #39

Earlier quoted context omitted.

I'm a bit baffled by this - are you saying that you can't identify a single market in the whole world that is worth to invest in & stable except US? Also I don't see that EU as a whole is on a downward trajectory, there are a lot of areas that are super strong, one being the defence industry. US on the other hand - who wants to invest in or trade with them when they treat the rest of the world (including close friend…

You can’t invest in EU sovereign debt though, only the constituent countries. The problem is that US treasuries have a bunch of features that can’t be replicated because of the size of the US economy. The only choice that comes close is China whose bonds are too illiberal to trade the same (and China has no interest in liberalizing them).

You can actually, but the volumes are too low to absorb a massive sell-off of US treasury paper.
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