Thanks for the feedback, Brewer.
Originally Posted by brewer12345
Seems like a reasonable strategy. On the sovereigns, just make sure you stick with top shelf credits (AA or better) and you should be fine. I haven't honestly looked at the world bank, etc., but I guess I would pay attention to who the guarantor is and what the entity's credit profile is. I'd probably be comfier with the State Bank of Bavaria and some of the Landesbanks than the ADB or the world bank, personally. I tend to view the Federal Home Loan Bank as equivalent to the US govt, but with a smidge higher yield.
As far as I can tell, the guarantor for the World Bank is the governments of the developed nations that support it. Though maybe it is more like a Fannie Mae type of thing, and there is no explicit guarantee after all. But they have never defaulted on a bond so far.
BTW, I think the State Bank of Bavaria to which I referred is in fact the Bayerische Landesbank.
When the credit markets crack (and they will), be ready to buy some corporates. They will become a very attractive deal at some point.
Would you be willing to give a heads-up when that becomes the case?