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0 pointsonlyrealcuzzo3y ago0 comments

AAA corporate bond yield has always been about ~1% above the treasury yield [1].

Almost nobody has bought government bonds for a long time besides pension funds (due to obligations), banks (due to regulations), foreign governments (due to ForEx necessity), the Fed, and a pretty small amount (~8%) held in 401ks (overwhelmingly by older folks) [2].

Rich people certainly aren't buying Treasuries to protect their wealth - unless it's someone like DoubleLine betting on interest rates only going down and the forced greater fool (pension funds).

401k people are only buying treasuries because of the "age old wisdom" - not because it makes sense unless you think like DoubleLine that treasury yields - long term - are only going down.

[1] https://fred.stlouisfed.org/series/AAA10Y

[2] https://www.thebalancemoney.com/who-owns-the-u-s-national-de...

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roflyear3y ago

This is just misinformation, I have worked with investment firms and family offices that regularly buy government securities.

onlyrealcuzzoOP3y ago

The vast majority of HNI wealth is not in treasuries. Some of them have astonishing amounts of money. They own everything under the Sun - obviously some treasuries. There's a lot of rich people - some of them at times are owning a lot of treasuries.

The reality is - a small percentage of treasuries are owned by individuals (including - and mostly - 401ks) - I linked to the data above.

Anecdotal evidence that you helped some people buy treasuries does not dispute that.

Something like ~5% of treasuries are not owned by The Fed, Foreign Governments, Pensions, 401ks, and Banks.

The vast majority of that is owned by bond traders. You're talking about maybe $600B owned by a group of people that has >$30T in wealth. That is basically nothing.

roflyear3y ago

That is correct, probably just a few percent. But the language here is making it sound like they are not purchased at all by individuals or family offices, and that is not true.

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roflyear3y ago

This is just misinformation, I have worked with investment firms and family offices that regularly buy government securities.

onlyrealcuzzoOP3y ago

The reality is - a small percentage of treasuries are owned by individuals (including - and mostly - 401ks) - I linked to the data above.

Anecdotal evidence that you helped some people buy treasuries does not dispute that.

Something like ~5% of treasuries are not owned by The Fed, Foreign Governments, Pensions, 401ks, and Banks.

The vast majority of that is owned by bond traders. You're talking about maybe $600B owned by a group of people that has >$30T in wealth. That is basically nothing.

roflyear3y ago

That is correct, probably just a few percent. But the language here is making it sound like they are not purchased at all by individuals or family offices, and that is not true.

j / k navigate · click thread line to collapse