The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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Ad Orientem
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Re: The Bond Dream Room

Post by Ad Orientem » Mon Sep 02, 2019 6:29 pm

Kriegsspiel wrote:
Mon Sep 02, 2019 12:45 pm
ochotona wrote:
Mon Sep 02, 2019 10:00 am
The thing missing is that Trump refused to place his assets in a blind trust before he took office as Presidents before him have done, therefore he didn't create a firewall which prevents even the appearance of conflict of interest. As any corporate communications manager / crisis manager will tell you, the very appearance of wrong-doing can be as bad as the actual fact. The appearance can damage a brand or company even in the absence of any actual wrong-doing.

So once again, Trumpster harvests more bitter self-sown fruit, then basically blames others for the astringent taste. This idea is all over social media, and he is profiting off of his tweets through proxies. I am sure we'll hear more from the SEC after he leaves office. They've got to be quietly archiving trade data just before and after major tweets and tantrums and looking for patterns and network associations. That's what they do.
What are the best examples of Trump manipulating and profiting? Maybe you have some bookmarked?
Well he is constantly promoting his resorts and taking VIP visitors there, at huge expense to taxpayers (and profit to the Trump Org). When he first took office China suddenly approved scores of trademarks and other concessions related to Trump, his family and businesses. My guess is that they may be experiencing a bad case of buyers regret right now. Its common knowledge that those who patronize his businesses get preferred treatment or access in his administration. A quick Google turned up endless cases of apparent self dealing and/or apparent conflicts of interest. He is facing scores of lawsuits including some he has settled for undisclosed amounts of money. His charity the Trump Foundation was basically a tax dodge and scam where he routinely used money for personal indulgences. The state of NY shut it down. I don't think it is an exaggeration to say that this is the most corrupt president in US History.
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Re: The Bond Dream Room

Post by flyingpylon » Tue Sep 03, 2019 8:44 am

Ad Orientem wrote:
Mon Sep 02, 2019 6:29 pm
I don't think it is an exaggeration to say that this is the most corrupt president in US History.
Which criteria should be used to determine "the most corrupt president in US history" and which should be ignored?

Your post is filled with phrases like "common knowledge", "a quick Google", "apparent" and "basically"... do those seem like reasonable standards by which to determine the most corruption?

Does the mere existence of lawsuits or settled lawsuits indicate corruption?
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Re: The Bond Dream Room

Post by dualstow » Thu Sep 05, 2019 10:30 am

(Quote is from Gold Scream, not here)
ochotona wrote:
Thu Sep 05, 2019 9:40 am
Gold and long Treasuries will be under assault for a while...
The fed is lining up another small rate cut, but I guess other factors are weightier right now.
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Re: The Bond Dream Room

Post by ochotona » Thu Sep 05, 2019 3:03 pm

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Re: The Bond Dream Room

Post by pugchief » Thu Sep 05, 2019 7:05 pm

Why would you hold them for 20 years? If rates rise above 4%, would you still hold, just to get the 3.53%? If you need the cash, you're screwed at 0.1% And if rates don't rise, but you forget to cash them in in exactly 20 years, you net return drops by the day. Only the author and JHogue* think these are worth buying. ;D



*Hogue, just messing with you.
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Re: The Bond Dream Room

Post by ochotona » Thu Sep 05, 2019 10:14 pm

Japanification, that's why.
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Re: The Bond Dream Room

Post by jhogue » Fri Sep 06, 2019 9:40 am

The key question for potential EE bond investors this:

Do you have a 20 year plan for your money? If you don’t, then you should never buy EE bonds. If you do have a 20 year plan (or longer), then EE bonds might have a useful role in your portfolio.

Pugchief’s worry that rates may rise above 4.00% reminds me of the warnings I got from “professional” financial advisors not to buy 30 year T bonds when I shifted to the HBPP back in 2013: The conventional wisdom then—and now too—was that interest rates "have no place to go but up!"
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: The Bond Dream Room

Post by ochotona » Fri Sep 06, 2019 10:47 am

Given my age, I can only really buy $30,000 of these things, I own none now. 2019, 2020, 2021 then I turn 60 in 2021. I don't mind betting on really low inflation risk with less than 2% of my portfolio. If I'm wrong, no great harm done. If the 30 year goes stays at 2%, I'm happy. It'll just be more deep cash.
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Re: The Bond Dream Room

Post by pugchief » Fri Sep 06, 2019 12:47 pm

jhogue wrote:
Fri Sep 06, 2019 9:40 am
The key question for potential EE bond investors this:

Do you have a 20 year plan for your money? If you don’t, then you should never buy EE bonds. If you do have a 20 year plan (or longer), then EE bonds might have a useful role in your portfolio.

Pugchief’s worry that rates may rise above 4.00% reminds me of the warnings I got from “professional” financial advisors not to buy 30 year T bonds when I shifted to the HBPP back in 2013: The conventional wisdom then—and now too—was that interest rates "have no place to go but up!"
I never said I was worried that rates would rise. I have no idea if they will go up or down. But 4% is not out of the realm of serious potential. So is 1%. Either way, I think EEs are a pointless waste. But to each his own.
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Re: The Bond Dream Room

Post by jhogue » Fri Sep 06, 2019 4:23 pm

I certainly do not consider EE bonds to be “a pointless waste.” A couple of specific, real world examples:

1. The EE bonds we used to pay for our daughter’s college back in 2007-2011 paid 6% p.a. and were both federal tax free and tax deferred. The accumulated interest was also exempt from all state and local taxes. Considering how badly the stock market crashed in 2008-2009, I was pretty happy with our EE bonds’ return ON principal as well as their return OF principal.

2. The current crop of EE bonds, which will return 3.53% if held for 20 years, were first offered in 2003. They achieve their doubling effect less than four years from now in 2023. I see no indication that those who invested in EE bonds then are unhappy with their performance now. Indeed, with 10 years currently at 1.55%; 20 years at 1.83%; and 30 year T bonds hovering around 2.00%, if anything, EE bond investors are a pretty smug bunch right now.

EE bonds are just another tool in the financial toolbox. You just have to make sure you are using the right tool for the right job.
Last edited by jhogue on Mon Oct 14, 2019 9:03 am, edited 1 time in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: The Bond Dream Room

Post by dualstow » Fri Sep 06, 2019 5:27 pm

I’m glad for this thread. i have a bunch of these that I’m supposed to redeem and i keep putting it off and forgetting about them. I-bonds, too.
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Re: The Bond Dream Room

Post by jhogue » Fri Sep 06, 2019 7:39 pm

You are welcome.

And fortunately we have pugchief around to keep us on our toes by keeping up to date on our US savings bonds, which, quite literally, have no place to go but up.

It sort of reminds me of the children's story "The Little Engine That Could":
Starting out is a lot of "I think I can... I think I can... I think I can...." To be finally followed by "I knew I could... I knew I could... I knew I could...."
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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