copyright1997reloaded
Thinks s/he gets paid by the post
So theoretically CDs at big US money center banks & big Canadian banks are potentially safer than US treasuries? If that were true shouldn’t treasury yield be spiking above CDs with of the same duration? Isn’t the market supposed to price the risk of default & wouldn’t that be reflected by yields by now? Or is this thing so screwy there’s no such thing as a strategy? Isn’t this America looking at itself in the mirror & not liking what it sees? How do you strategize against yourself? I really don’t understand understand how anyone wins this game. It’s us against them. Except there is no them.
Ask yourself this question. If they were the same yield and there were no tax consequences, would you rather have a CD maturing in June or a T-Bill?
I know my answer would be CD, even though normally I would rather have a T-Bill w/equivalent yield as they are much more liquid.
As of yesterday close, my T-Bill maturing 6/15 (CUSIP 912796X53) has a YTM (from today) of 4.82%, my T-Bill maturing on 6/22 (CUSIP 912796ZQ5) has a YTM of 4.98%. These are higher than what I could earn on a 6-8 week CD. Compare that to a year out, where CD yields are higher than treasuries. So I think Mr. market is starting to price in more risk with those June-July treasury maturities. Is it enormous? No, because most think the issue will be resolved and the payments made.