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T-floaters
Posted: Fri Jul 12, 2013 1:48 pm
by Libertarian666
I haven't seen this mentioned yet, and thought it might be of interest.
https://news.fidelity.com/news/article. ... -bonds-cds
Re: T-floaters
Posted: Fri Jul 12, 2013 7:26 pm
by notsheigetz
I'll probably buy these when they become available unless Craig or MT comes up with a good reason why not.
Even better, how about extending this to long term Treasuries? Long Term Bonds with no interest rate risk. What could be better?
Re: T-floaters
Posted: Fri Jul 12, 2013 10:11 pm
by whatchamacallit
It seems like they would be a good alternative to the missing treasury money market funds.
You get 2 years without having to roll them over.
Re: T-floaters
Posted: Fri Jul 12, 2013 11:07 pm
by Libertarian666
Well, of course 30-year floaters wouldn't soar in price during a deflationary depression when interest rates went down, which was the original impetus for putting long Treasurys into the PP. They should stay stable in price regardless of interest rates, so they should make a reasonable replacement for T-Bills that wouldn't have to be repurchased so frequently.
Re: T-floaters
Posted: Sat Jul 13, 2013 3:21 pm
by Austen Heller
So they lock you in for 2 years and only pay you the prevailing 3-month rate the whole time. If you only wanted the 3-month rate, why lock up your money for 2 years and lose your liquidity? This must be an investment for lazy people who can't be bothered to maintain a rolling 3-month bill ladder. Unless of course the penalties to sell early are minimal.