The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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jhogue
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Re: The Bond Dream Room

Post by jhogue » Thu Mar 12, 2020 8:44 am

Seems like a nice job opportunity for recently out-of-work stock brokers.
“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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sophie
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Re: The Bond Dream Room

Post by sophie » Thu Mar 12, 2020 9:49 am

Kriegsspiel wrote:
Thu Mar 12, 2020 8:20 am
dragoncar wrote:
Thu Mar 12, 2020 3:39 am
Refis are so popular, everyone raised their rates this week. Nobody can beat my current rate, which is decent (sub-4) but nothing amazing. I guess there is too much demand, not enough processing staff.

I hope it goes lower over the next months, but if coronavirus has a large impact, the supply side might continue to slide due to office closures and sick workers. Appraisal could tank. W2 income could go boom.
I saw a story where a mortgage company was posting HIGHER RATES THAN THEY WERE ACTUALLY OFFERING on their website to decrease the amount of calls they were getting from rate-hunters. I just can't even.
That explains a lot. The mortgage refi rates quoted on Chase's website went from 3.35% to 4.125% while bond yields went DOWN. Ridiculous. I guess just watch and wait for now. With the 10 year rate being what it is, it's ridiculous for 30 year fixed mortgages to be over 3%.
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Re: The Bond Dream Room

Post by pmward » Thu Mar 12, 2020 11:40 am

Yeah, mortgages cannot drop as fast as bonds. I mean if the 30 year rate dropped to 2% this week, literally every homeowner in America would be refinancing. They will be ramping up staffing, but it takes time to recruit and get people trained so in the meantime there will be a delay in mortgage rates dropping simply due to the staffing bottleneck.
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Cortopassi
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Re: The Bond Dream Room

Post by Cortopassi » Thu Mar 12, 2020 12:25 pm

Fed buying bonds.

And that worked for about 1.5 hours....

All I've ever read is when people lose confidence in the Fed, everyone will run to gold. Hope that happens.
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Ad Orientem
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Re: The Bond Dream Room

Post by Ad Orientem » Thu Mar 12, 2020 3:26 pm

Stocks and bonds are moving together in the same direction. That could be a sign of serious trouble...

https://www.nytimes.com/2020/03/12/upsh ... virus.html
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Kbg
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Re: The Bond Dream Room

Post by Kbg » Thu Mar 12, 2020 6:35 pm

Definitely...I actually saw something local for 2.25% for a 15 year and I moved that night...and of course we know the bank couldn't process fast enough and the window was missed.
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shekels
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Re: The Bond Dream Room

Post by shekels » Thu Mar 12, 2020 6:56 pm

Cortopassi wrote:
Thu Mar 12, 2020 12:25 pm
Fed buying bonds.

And that worked for about 1.5 hours....

All I've ever read is when people lose confidence in the Fed, everyone will run to gold. Hope that happens.
I always thought that it was when they lose confidence in their Government, when gold took off.
¯\_(ツ)_/¯
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jhogue
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Re: The Bond Dream Room

Post by jhogue » Thu Mar 12, 2020 8:05 pm

Kriegsspiel wrote:
Wed Mar 11, 2020 5:45 pm
What the fuck is this ridiculous bullshit
A Fixed Income order to sell U S TREASURY BOND was
canceled in your Vanguard Brokerage Account due to a change in the bid
price available. If you wish to replace the order, you should call Vanguard
at the number referenced below.
Kriegs,
Did your bond order go through?

There was unprecedented volatility in the bond market this week.
See:
https://www.marketwatch.com/story/fierc ... =home-page
“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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Kriegsspiel
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Re: The Bond Dream Room

Post by Kriegsspiel » Thu Mar 12, 2020 8:25 pm

jhogue wrote:
Thu Mar 12, 2020 8:05 pm
Kriegsspiel wrote:
Wed Mar 11, 2020 5:45 pm
What the fuck is this ridiculous bullshit
A Fixed Income order to sell U S TREASURY BOND was
canceled in your Vanguard Brokerage Account due to a change in the bid
price available. If you wish to replace the order, you should call Vanguard
at the number referenced below.
Kriegs,
Did your bond order go through?

There was unprecedented volatility in the bond market this week.
See:
https://www.marketwatch.com/story/fierc ... =home-page
No. They're still sitting in my account, worth 13% less.
I hated all the things I had toiled for under the sun, because I must leave them to the one who comes after me. Who knows whether that person will be wise or foolish? Yet they will have control over all the fruit of my toil into which I have poured my effort and skill under the sun. . . Nothing is better for a man than to eat and drink and enjoy his work.
- Ecclesiastes
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Re: The Bond Dream Room

Post by dualstow » Thu Mar 12, 2020 8:54 pm

Cortopassi wrote:
Thu Mar 12, 2020 12:25 pm
Fed buying bonds.

And that worked for about 1.5 hours....
...
Silly Jim Cramer thought he was going to be the hero that saved America.
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Tortoise
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Re: The Bond Dream Room

Post by Tortoise » Fri Mar 13, 2020 11:35 am

Usually TLT moves inversely with the 30-year Treasury yield (^TYX), but this past week that relationship hasn't always been holding. Sometimes I'll see them both move up or down together, by very large percentages.

Is that most likely due to large bid-ask spreads during this market turmoil (i.e., liquidity fluctuations), or is it because the shape of the yield curve is flopping around like a spaghetti noodle and TLT's bonds consist of a range of maturities (e.g., 20-30 years) instead of 30-year bonds exclusively?
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Re: The Bond Dream Room

Post by boglerdude » Mon Mar 23, 2020 12:49 am

Looks like I fell for the narrative that you can get a deal on downgraded investment grade bonds because institutions are forced to sell them. I bought FALN, this chart is performance since launch. Trounced by stocks and Vanguard's junk fund. Any reason to keep? Any scenarios where it could outperform? I'll plan to dump it and put into VTI/VTSMX

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