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09-24-2022, 05:28 PM
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#361
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,173
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Quote:
Originally Posted by NomDeER
My Vanguard settlement fund is at 2.49%. I don't know what the odds are of it going up fast enough to average 3.3% over the next three months, but I do think that the settlement fund is fairly likely to be above 3.3% in three months. I'm inclined to put half of my settlement account money into a relatively short term ladder (no more than 24 months with more going into a three month) right now and keep half of it in the settlement fund to invest in treasuries/CDs over the next few months.
This obviously is market timing, but it doesn't seem to be comparable to market timing for stocks because the Fed has pretty clearly indicated that it is going to be increasing interest rates during the rest of the year.
I admit, though, that I know very little about bonds, so this approach could be pretty dumb. So, people should feel free to tell me how and why it is not a wise approach.
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Whatever you do, it's a lot smarter than keeping your money in some of the big mega banks, or even some of the online banks. I just got a notice from one Big Name internet bank that I can now get a 3% one year CD. WOW? Nope. I just built a ladder that had a one year CD kissing close to 4%.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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09-24-2022, 08:06 PM
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#362
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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Quote:
Originally Posted by Chuckanut
Whatever you do, it's a lot smarter than keeping your money in some of the big mega banks, or even some of the online banks. I just got a notice from one Big Name internet bank that I can now get a 3% one year CD. WOW? Nope. I just built a ladder that had a one year CD kissing close to 4%.
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One year is at 4.05% now. Likely to rise too.
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09-25-2022, 10:46 PM
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#363
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,281
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So what rate are we guessing for the auction tomorrow for the six month bond? I'm planning to wait for the October 3 auction to buy again. The 6 month T-bill was something like 3.8% annualized for the September 19th auction - reckon it will hit 4.1% tomorrow?
__________________
"Be kind whenever possible. It is always possible." Dalai Lama
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09-26-2022, 05:04 AM
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#364
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Full time employment: Posting here.
Join Date: Mar 2019
Posts: 749
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Quote:
Originally Posted by OldShooter
No worries. The government will just create whatever amount of money is needed. Defaults only happen to people who don't have the power to create the money that they owe.
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That is true up to a point. If the FDIC runs out of money (like the FSLIC did in the late 1980s) the government can step in and make depositors whole. In the FSLIC instance it took a long time for that to happen. In the meantime your money is earning nothing and is completely illiquid.
There is ZERO doubt that Treasury bills are safer than CDs. Anyone who claims they are equally safe just doesn't understand the underlying characteristics of the products.
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09-26-2022, 05:08 AM
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#365
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Full time employment: Posting here.
Join Date: Mar 2019
Posts: 749
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Quote:
Originally Posted by calmloki
So what rate are we guessing for the auction tomorrow for the six month bond? I'm planning to wait for the October 3 auction to buy again. The 6 month T-bill was something like 3.8% annualized for the September 19th auction - reckon it will hit 4.1% tomorrow?
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6 month yields were approaching 3.9% on Friday and are higher this morning. The 2 year yields are up to 4.3% this morning. There is also a 2-year note auction later today. It will be interesting to see if that yield comes in in that area. We'll see.
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09-26-2022, 06:16 AM
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#366
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,011
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Quote:
Originally Posted by calmloki
So what rate are we guessing for the auction tomorrow for the six month bond? I'm planning to wait for the October 3 auction to buy again. The 6 month T-bill was something like 3.8% annualized for the September 19th auction - reckon it will hit 4.1% tomorrow?
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3.9+%?
It’s showing 3.926% early market.
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Retired since summer 1999.
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09-26-2022, 09:56 AM
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#367
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Full time employment: Posting here.
Join Date: Feb 2019
Location: NC
Posts: 568
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I read 3.913% for t-bills 6 month. (1140AM CNBC).
TD Ameritrade yield is 3.7 for the T-bills Secondary Market 6 month.
FIDO yield is 3.79 for T-bills sec mkt.
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09-26-2022, 09:58 AM
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#368
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Thinks s/he gets paid by the post
Join Date: Aug 2017
Location: Champaign
Posts: 4,690
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Quote:
Originally Posted by jldavid47
There is ZERO doubt that Treasury bills are safer than CDs. Anyone who claims they are equally safe just doesn't understand the underlying characteristics of the products.
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Agree, and the lesson from 2008...big banks don't fail? Really?
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."
Ralph Waldo Emerson
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09-26-2022, 10:01 AM
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#369
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Posts: 11,701
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TD publishes 3.981% (Investment rate - very close to approximate APR) for 26 week T-Bill. Probably headed to 4+ next week.
https://www.treasurydirect.gov/insti...nnceresult.htm
__________________
Retired Class of 2018
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09-26-2022, 10:07 AM
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#370
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,337
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Quote:
Originally Posted by jldavid47
... There is ZERO doubt that Treasury bills are safer than CDs. Anyone who claims they are equally safe just doesn't understand the underlying characteristics of the products.
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Well, I guess I just don't understand then. In terms of getting one's money back IMO they are the same. Admittedly possible bureaucratic delay favors the govvies but I don't think that jeopardizes "safe."
__________________
Ignoramus et ignorabimus
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09-26-2022, 10:17 AM
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#371
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,011
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Quote:
Originally Posted by Born2Fish
I read 3.913% for t-bills 6 month. (1140AM CNBC).
TD Ameritrade yield is 3.7 for the T-bills Secondary Market 6 month.
FIDO yield is 3.79 for T-bills sec mkt.
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It was 3.981% at auction on the Treasury Direct Auction Results page. Investment rate which is the best APR comparison.
__________________
Retired since summer 1999.
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09-26-2022, 10:36 AM
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#372
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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Quote:
Originally Posted by OldShooter
Well, I guess I just don't understand then. In terms of getting one's money back IMO they are the same. Admittedly possible bureaucratic delay favors the govvies but I don't think that jeopardizes "safe."
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I agree... as long as you stay within the FDIC limits then you will get your money back... and probably your contractual rate of interest too... but you might have to wait a bit for it. I agree that UST have a slight edge in that regard but it is really a nit in terms of differences in risk.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-26-2022, 11:23 AM
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#373
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by OldShooter
Well, I guess I just don't understand then. In terms of getting one's money back IMO they are the same. Admittedly possible bureaucratic delay favors the govvies but I don't think that jeopardizes "safe."
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The FDIC's is backed by the "Full faith and credit" of the US Treasury but the devil is in the details.
Here is one, namely a limit on the FDIC's ability to borrow from the US Treasury:
Quote:
(a) BORROWING FROM TREASURY.--
(1) IN GENERAL.--The Corporation is authorized to borrow from the Treasury, and the Secretary of the Treasury is authorized and directed to loan to the Corporation on such terms as may be fixed by the Corporation and the Secretary, such funds as in the judgment of the Board of Directors of the Corporation are from time to time required for insurance purposes, not exceeding in the aggregate $100,000,000,000 outstanding at any one time, subject to the approval of the Secretary of the Treasury:
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Yes, 100 billion is a lot. Yes, I sleep at night knowing that FDIC deposits are insured and have US Treasury backing.
But there are differences between an FDIC insured bank account and a direct Treasury obligation.
I am posting this not to scare anyone from FDIC-insured deposits, only for education (to anyone who cares) about how the FDIC government backing works.
Reference: https://www.fdic.gov/regulations/law...dic1000sec.14a
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09-26-2022, 11:34 AM
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#374
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,337
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Quote:
Originally Posted by copyright1997reloaded
... I am posting this not to scare anyone from FDIC-insured deposits, only for education (to anyone who cares) about how the FDIC government backing works. ...
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All that is very nice, but irrelevant. The politicians are not going to let FDIC stiff people. Period. Rules and procedures will be rewritten on the fly as necessary. That is the way the government backing will work.
__________________
Ignoramus et ignorabimus
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09-26-2022, 11:47 AM
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#375
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by OldShooter
All that is very nice, but irrelevant. The politicians are not going to let FDIC stiff people. Period. Rules and procedures will be rewritten on the fly as necessary. That is the way the government backing will work.
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Whatever. You keep insisting they are the same. They are not.
Did I say it was worth worrying about? No. But to insist "The politicians are not going to let the FDIC stiff people" is an assumption.
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09-26-2022, 12:18 PM
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#376
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Thinks s/he gets paid by the post
Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 2,998
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I registered at Treasury Direct today and purchased my 1st I-bond today. I still have yet to figure out Fidelity's website on purchasing "new" T-Bills.
Now I have to get DW on board.
Thanks to all for this thread.
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09-26-2022, 12:30 PM
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#377
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by CRLLS
I registered at Treasury Direct today and purchased my 1st I-bond today. I still have yet to figure out Fidelity's website on purchasing "new" T-Bills.
Now I have to get DW on board.
Thanks to all for this thread.
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See images for flow (screen 1, new issues, treasuries)
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09-26-2022, 12:48 PM
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#378
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,667
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When Buying USTs, as I understand it there is no concern about $250k limits, as they are backed by the FF of the US Government which is better than FDIC.
Is that correct, or am I mistaken? I have never purchased a UST directly.
Thanks
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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09-26-2022, 12:50 PM
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#379
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,054
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Quote:
Originally Posted by ShokWaveRider
When Buying USTs, as I understand it there is no concern about $250k limits, as they are backed by the FF of the US Government which is better than FDIC.
Is that correct, or am I mistaken? I have never purchased a UST directly.
Thanks
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That's correct.
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09-26-2022, 12:52 PM
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#380
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,667
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Quote:
Originally Posted by jim584672
That's correct.
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Thanks
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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