Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

di.se

Post reply on HN
Print view View original

111–120 of 192 posts

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

#111

Post by jacquesm »

stackghost wrote: post #35
JanisErdmanis wrote: post #31

Earlier quoted context omitted.

> However dumping that much debt all at once would require the sellers to heavily discount a large portion of their bonds, earning them increasingly fewer, and paying in (depreciating) dollars. I think all investors are now looking at this with this foresight. Being the first to dump seems to be the winning game here.

>I think all investors are now looking at this with this foresight. Being the first to dump seems to be the winning game here. When you're talking about hundreds of billions of dollars worth of bonds you simply can't move that much in one go. That's an elephant-in-the-bathtub situation where your moves disturb the market because of their size. Even the first entity to dump would still have to discount a lot of their…

That's exactly what will drive the sell-off. Speed is key. Being the last one to sell is going to leave you with the worst of it.

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

#112

Post by jacquesm »

dwa3592 wrote: post #45

They can start buying Euro bonds, Gold, bonds for the great european companies like ASML, Airbus etc?? they can basically find a way to invest in their future, right? they just need to figure out the right financial vehicle?

There isn't enough of that to offset the enormous EU holdings of US paper.

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

#113

Post by jacquesm »

amluto wrote: post #56
Sytten wrote: post #27

The problem is that Europe doesn't have a European bond market to compete against the US bond market. It has the economic size and stability but not the will right now. Europe did try it a bit during COVID but financial services are just not there yet. The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.

That’s a weird problem to have. The US has a huge bond market in part because the US has an absolutely enormous amount of debt, and the bonds are the US debt. The EU doesn’t have bloc-wide debt, for better or for worse. As an interesting thought experiment, imagine a central bank associated with a debt-free country issuing bond-like instruments. They would set an interest rate (perhaps with no auction, because they h…

After COVID we had some but it is a tiny amount in comparison.

https://en.wikipedia.org/wiki/Next_Generation_EU

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

#114

Post by jacquesm »

linkregister wrote: post #63
Sytten wrote: post #27

The problem is that Europe doesn't have a European bond market to compete against the US bond market. It has the economic size and stability but not the will right now. Europe did try it a bit during COVID but financial services are just not there yet. The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.

[American perspective] In February I looked toward Euro bond markets as a safe haven for increasing Treasury yields, but the choices did not look good. For starters it appears to be impossible to even trade in foreign bonds with traditional brokerage accounts in the United States (hosted by E-trade, Morgan Stanley, Charles Schwab, etc). Additionally, French bonds, while likely less-correlated with US Treasuries than…

And even if you tried to sidestep these restrictions you'd quickly find that your ability to deal with the EU financial system evaporates as soon as they find out that you are American.

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

#115

Post by jacquesm »

ectospheno wrote: post #40

An equally valid headline is "Investors purchased $8B of US Treasury Bonds". Never really got the point of people announcing US Treasury sales like its a big thing. Someone else not thinking with their emotions can, and will buy them. Its like announcing publicly you are selling your Honda. Its your Honda bro, sell it.

If Honda wants to keep the value of Honda at what it is today and enough people are selling their Honda's then Honda is at some point going to have to support the market if they want to have any chance of selling Honda's in the future. And Honda has only so much capital to spend before the company itself is at risk.

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

#116

Post by AnimalMuppet »

toomuchtodo wrote: post #93
loeg wrote: post #68

Earlier quoted context omitted.

What makes you say "certainly," especially in the hypothetical scenario where the US is unstable? Canada has a relatively much shorter history as an independent nation. Canada heavily benefits from its southern neighbor, and has a host of domestic economic issues (low wages, high housing prices; whatever the farmers are on about) that could cause instability as well. I think Canada is reasonably stable, I just quibbl…

Canada will not invade allies and will adhere to the rule of law. Their forward looking economics are more favorable as they strengthen ties with China and Europe. By decoupling from the US, their economic risk declines, and their sovereign debt risk is downstream of that.

Under current conditions, though, they may be invaded and/or annexed. That's a risk.

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

#117

Post by throwaway2037 »

linkregister wrote: post #63
Sytten wrote: post #27

The problem is that Europe doesn't have a European bond market to compete against the US bond market. It has the economic size and stability but not the will right now. Europe did try it a bit during COVID but financial services are just not there yet. The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.

[American perspective] In February I looked toward Euro bond markets as a safe haven for increasing Treasury yields, but the choices did not look good. For starters it appears to be impossible to even trade in foreign bonds with traditional brokerage accounts in the United States (hosted by E-trade, Morgan Stanley, Charles Schwab, etc). Additionally, French bonds, while likely less-correlated with US Treasuries than…

    > For starters it appears to be impossible to even trade in foreign bonds with traditional brokerage accounts in the United States (hosted by E-trade, Morgan Stanley, Charles Schwab, etc).
Try Interactive Brokers. They are US-based, but offer accounts in most other countries. (Insane list here: https://www.interactivebrokers.com/en/accounts/open-account-...) I frequently recommend them here, so much so that I must look like a shill. I assure you that this is not a sponsored post! I have been a customer for 10+ years. I describe their service as institutional in breadth, but offered to retail customers. The number of international stocks markets, futures and options markets, and fixed income markets (all types of gov't and corporate bonds) is stunning. The numbers look similar to a Tier 1 investment bank, like Morgan Stanley, could offer their institutional clients. It is unmatched for non-institutional (retail) traders in my experience. It also has crazy low fees and is wildly transparent about them. To me, the only negative point is the website is a bit slow and feels about 5 years out of date, but that's not a deal breaker for me. I can trade all equities on the website, and the more complex things (like bonds or futures) I trade using their (I assume white-labeled) Java trading app that is cross-platform.

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

#118

Post by marcyb5st »

jacquesm wrote: post #109
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 al…

Swiss bonds are super safe, but they have ~0 interest rate and so you lose out on inflation.

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

#119

Post by marcyb5st »

throwaway2037 wrote: post #117
linkregister wrote: post #63

Earlier quoted context omitted.

[American perspective] In February I looked toward Euro bond markets as a safe haven for increasing Treasury yields, but the choices did not look good. For starters it appears to be impossible to even trade in foreign bonds with traditional brokerage accounts in the United States (hosted by E-trade, Morgan Stanley, Charles Schwab, etc). Additionally, French bonds, while likely less-correlated with US Treasuries than…

> For starters it appears to be impossible to even trade in foreign bonds with traditional brokerage accounts in the United States (hosted by E-trade, Morgan Stanley, Charles Schwab, etc). Try Interactive Brokers. They are US-based, but offer accounts in most other countries. (Insane list here: https://www.interactivebrokers.com/en/accounts/open-account-... ) I frequently recommend them here, so much so that I must l…

+1 for Interactive Brokers. You can migrate super easy by having them filing a full ATAC. I came from Charles Schwab, which I have to keep because my employer sends GSUs to either Schwab or Morgan Stanley.

Additionally, the UX is much better (IMHO) than Schwab, both on mobile and desktop.

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

#120

Post by coredev_ »

tick_tock_tick wrote: post #71
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…

I mean there is a second almost if not more critical requirement which is has a big enough and liquid enough debt market to function like US treasuries. > Also I don't see that EU as a whole is on a downward trajectory That's an extremely contrarian take that you can't justify with EU defense did good for once in it's life. Maybe we'll see something from the EU but remember the USA and EU GDP were basically identical…

Fair, but a bit slower growth than US is not a downward trajectory. Also there is currency effects involved.

Isn't US injecting a lot of loaned money into the economy in a rate that might not be sustainable long term? Their debt-to-GDP ratio is way higher than EUs?

Post reply on HN