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  • edited September 15
    From near 0% at the start of this year...all the way up to 4% only eight months later on the 1 year T-Bill.

    Just too bad that its the highest yield on the curve.
  • I bought some today. May be more tomorrow?
  • Yields........a chart view

    This is not a performance chart, but a percentage of change chart in yield. I've peeked at this periodically for a number of years......for the chart perspective.

    The chart is set for YTD. You may double click the 178 box below the chart, enter a different number of days and ENTER key; OR right click the box and choose from the menu.
    The yield on any date will be shown with "hovering" the cursor on top of a selected chart line.

    Pillow time.
    Catch
  • edited September 16
    Heard on the news today that 30 year fixed mortgages are now over 6%, Not that long ago they were 3-4%. That has to hit the housing market like a sledge hammer. And all those cash out refinances that went into goosing the economy would appear dead in the water.

    “Soft landing”? Linguistically challenging.:)
  • Bespoke chart from Twitter,

    image
  • Does anyone use short-term Treasuries as cash substitute vs a cash-like ETF? IE, throw large figures into a T-bill paying 4% and then just sell off what you need from it to fund other asset purchases as needed?
  • Currently using USFR for a partial cash position. 2.68%-30 day sec yield. very low duration of 0.02. Will be able to catch rising rates with virtually no decrease in price which will occur with longer dated treasuries. Since purchase earlier in week a very small increase in price has occurred so there is a chance of a small capital gain in addition to the yield.
  • edited September 16
    "Heard on the news today that 30 year fixed mortgages are now over 6%, Not that long ago they were 3-4%. That has to hit the housing market like a sledge hammer."

    @hank- At this point in time, I agree with you regarding the damage to the housing market. But what I'm having trouble with is the fact that back in the 70s, at least in SF, 30-year mortgage rates were typically in the 8% range, or even a little over. I remember, because we had an 8.5% mortgage for our first home, and that was with an excellent credit rating.

    And yet the real estate market, at least here in SF, wasn't in any particular trouble. Lots of people were buying and selling homes in that environment. Also, unlike today, there was no great shortage of "affordable" housing in the SF Bay Area, because there was still land available for new building in nearby areas.

    I really have no idea, but it seems to me that there must have been other factors involved in the general financial situation then, compared to now. I'd be very curious to know a bit more about all of that.
  • edited September 16
    My mortgage in late-1970s was at 10.75%. Those were different times. Real estate cap rates were quite high then. Valuations now are much higher for everything. Even the T-Bills are approaching the cap rate, thanks to the Fed, Twitter LINK.

    image
  • edited September 16
    +1

    All true OJ. A guess would be it has to do with the speed of change (in rates). Over time people will get used to 6% mortgages or higher if their income / net worth keep pace.

    I well remember the 60s / 70s as a teen age “nerd” who subscribed to U.S. News & World Report at 15 and normally read it twice on a weekend. You may recall that the dollar weakened considerably over those inflationary years as cost of living rose from maybe 5% in the 60s to double-digit by the late 70s. Not to be overlooked, gold soared from $35 to over $800 by the mid 70s. Houses appreciated nicely and just about everybody in the world agreed they were the best investments.

    We baby boomers “goosed” the home buying frenzy helping push up interest rates. By contrast, equity investing lagged by about a decade but took off in the 70s as I recall. Once we had our homes, new cars (and in some cases kids) we began investing for retirement. My first home in the late 70s carried something like a 10-11% fixed rate mortgage. As my income kept pace - based on COL adjustments plus “stepping” (increases based on years service) - that interest rate didn’t seem onerous.

    So, simply put - It takes time for consumers and markets to adjust to new realities. I think in a plane what we’re witnessing right now might be called “bow shock.”
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