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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

#21

Post by arjie »

toomuchtodo wrote: post #18
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?

Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free). https://www.bogleheads.org/forum/viewtopic.php?t=449401

The disciple went to his master and said "Master, I am considering stopping doing a thing and starting to do a different thing. But I am not certain what the new thing is that I should be doing".

The master turned to the disciple and said: "A better thing"

The disciple was enlightened.

EDIT: Oh damn it. The entirety of the comment was "Sovereign debt of a more politically stable nation state or other monetary union" at the time I replied. Ah well.

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

#22

Post by alecco »

IAmGraydon wrote: post #14
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.

Norway only holds $219 billion in US Treasury bonds. What investments are you talking about?

>> sell off US investments

I think he means also US stocks. So most of the wealth fund.

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

#23

Post by [deleted] »

arjie wrote: post #21
toomuchtodo wrote: post #18

Earlier quoted context omitted.

Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free). https://www.bogleheads.org/forum/viewtopic.php?t=449401

The disciple went to his master and said "Master, I am considering stopping doing a thing and starting to do a different thing. But I am not certain what the new thing is that I should be doing". The master turned to the disciple and said: "A better thing" The disciple was enlightened. EDIT: Oh damn it. The entirety of the comment was "Sovereign debt of a more politically stable nation state or other monetary union"…

[deleted]

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

#24

Post by kavalg »

toomuchtodo wrote: post #18
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?

Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free). https://www.bogleheads.org/forum/viewtopic.php?t=449401

But I am having a hard time identifying this union/nation. Unfortunately, it feels like the EU is set on a downward trajectory.

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

#25

Post by rdtsc »

oulipo2 wrote: post #5
jakobnissen wrote: post #4

A brief search suggests this is around 1/4000th of the total US treasury market, so if this has any significance at all, it's symbolic.

Symbolism has importance

Exactly but it has to be recognized as such. It’s easy to fall into self delusion and make it into some “oh yeah this will be collapse of the US empire, finally” story.

Not, that it also fun to go with that story, but as long as everyone in the room understands it’s sort of a wishful fantasy.

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

#26

Post by blitzar »

IAmGraydon wrote: post #14
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.

Norway only holds $219 billion in US Treasury bonds. What investments are you talking about?

https://www.nbim.no/en/investments/all-investments/

I make it only 1.5 trillion equities - they run about a 70 / 30 split stocks to bonds.

They could easily trim up their $50bn of Nvidia or their $50bn of Microsoft or their $40bn of Apple etc and put it to better use.

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

#27

Post by Sytten »

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.

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

#28

Post by SilverElfin »

jakobnissen wrote: post #4

A brief search suggests this is around 1/4000th of the total US treasury market, so if this has any significance at all, it's symbolic.

Not really - it is going to show the world what alternatives people are pursuing as a strategy. Where they put their money will cause others to do the same. And the more people do it, the safer those new assets become. That will cause even more people to make the move.

Note that China has been selling US treasuries for months now (https://www.barrons.com/articles/china-sells-treasuries-9-st...) and there are signs that India has been quietly selling large amounts too. So it feels like the start of something much bigger, a total decoupling from the US due to its unstable politics, foreign policy, and quickly accumulating debt (Trump has added $5 trillion already and may add much more).

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

#29

Post by loeg »

toomuchtodo wrote: post #18
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?

Sovereign debt of a more politically stable nation state or other monetary union, if you are investing at these levels. If you're an individual, you have more options, although there will be fierce debate about the risk profile (as US Treasuries were historically considered to be risk free). https://www.bogleheads.org/forum/viewtopic.php?t=449401

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

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

#30

Post by irishcoffee »

margalabargala wrote: post #7
jakobnissen wrote: post #4

A brief search suggests this is around 1/4000th of the total US treasury market, so if this has any significance at all, it's symbolic.

1/4000th in this context seems huge to be honest.

If the US paid $8B towards it debt every _day_ it would take over thirteen _years_ (completely ignoring interest accumulation, which isn't realistic) to pay off $38T in debt.

I don't see how this is huge in context, it is indeed symbolic.

Please don't get me wrong here, I am neither advocating the selling or not selling of US bonds. This specific sale just isn't statically significant in a vacuum. If this precipitates a snowball effect of bond-selling, completely different story.

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