Treasury Bills, Notes, and Bonds Discussion

[Montecfo]

10 year eclipsed the hi yield of last fall. It is getting interesting.

 

[11522914]

10 year eclipsed the hi yield of last fall. It is getting interesting.

Once it breaks the 52 week high of 4.333 it's to the moon.[emoji848]

 

[audreyh1]

Sorry not the Answer you are looking for but at FIDO i have to Call them to make it happen if buying a new issue bill. I dont show any money to purchase it and it closes on monday.

I don’t have to call Fido, I have set up buy at auction for something that settles and matures the same day. Of course I’ve had enough in money market funds to cover the new purchase regardless.

You can also use their autoroll feature if you want to buy the same maturity t-bill.

 

[aja8888]

Wolf Street article on the treasury hitting 4.28% yesterday:

https://wolfstreet.com/2023/08/16/t...ith-higher-for-longer-tsunami-of-issuance-qt/

The 10-year yield closed at 4.28% today, according to Treasury Department data, the highest since, well, let’s look here, November 14, 2007, so about 15 years ago, having edged past November 2022 and June 2008 by a hair. 2007 is notable in that it was the last year before the arrival of QE.

What is hilarious in a twisted way is that the 10-year yield had dropped to 0.5% in August 2020, and everyone and their dog were preaching to the world that longer-term yields would drop into the negative in the US, as they’d already done in Europe, because of course the 40-year Great Bond Bull Market – Great Bong Bull Market? – would have to continue for evermore, with yields falling deeper and deeper into the negative. I have a term for this: Consensual Hallucination.

 

[Midpack]

I have a 26-week T-Bill maturing on 8/24 with Vanguard.
I would like to buy a T-Bill that settles on the same day.
Will the funds from the maturing bill be in my settlement account and available for purchase of the new bill on the same day?

If you're buying the 26wk T-Bill that is announced on 8/24 and auctioned on 8/28, I would think yes.

If you mean the 26wk T-Bill that was announced on 8/17, auctioned 8/21 and settling on 8/24, I'm pretty sure that would be a no IME. Your maturing funds would not be available for auction on 8/21. I have T-Bills with Vanguard, and I have always had to wait a week (unless I am doing something wrong?) FWIW.

I think Fido and some others have auto roll that might make that possible, but Vanguard does not auto roll.

 

[Cayman]

Happy to plow more into TIPS. Picked up 2% coupon with minimum YTM of 2.8% today. Matures 2026. Decent return with inflation protection.

TIPs maturing in 2026 at a 2.8% yield to maturity yesterday. That's *before* the inflation kicker - it was a no brainer for my ladder. If inflation moves up (and it may) then I'll be extra glad. Thinking of buying more.

 

[JoeWras]

Reading about "consensual hallucinations" reminds me of this thing called "The Market". (TM)

When I listen to pundits, it is amazing how much TM thinks rates will go back to zero. Do we have anyone past age 60 who works in TM?

There was a lot of drunkenness going about when rates were zero for so long. Hangovers are a b*tch.

 

[grasshopper]

My experience with Vanguard is if the maturity date of a T-bill and the settlement date of the T-bill you are buying are the same. No problemo.

 

[Rayray3]

I have had the same experience as grasshopper with Vanguard. I put my 26-week T-bill order in the Thursday before the 26-week T-bill I need the funds from matures. Vanguard will give you a warning that you don't have sufficient funds at the moment, but you just accept that. Then, on the maturity date, the funds from the maturing T-bill will be used to settle the new T-bill you are purchasing.

I have done this several times.

 

[Trooper]

My experience with Vanguard is if the maturity date of a T-bill and the settlement date of the T-bill you are buying are the same. No problemo.

I have had the same experience as grasshopper with Vanguard. I put my 26-week T-bill order in the Thursday before the 26-week T-bill I need the funds from matures. Vanguard will give you a warning that you don't have sufficient funds at the moment, but you just accept that. Then, on the maturity date, the funds from the maturing T-bill will be used to settle the new T-bill you are purchasing.

I have done this several times.

Ok thanks. I will give it a try and report back.

 

[dobig]

10 year eclipsed the hi yield of last fall. It is getting interesting.

One of the bobbleheads on CNBC this morning said there is no technical resistance to 5%. Luckily sold all my long duration last month when the 10 year took a dip and am chomping at the bit to get back in. Some of the long duration, non callable GSE's are starting to look real appealing at the plus 5% range. Also looking to jump back into those 20 year JPM non callable notes with 5.625% coupon if the yield hits 6% (cusip 46625HJM3).

 

[Montecfo]

One of the bobbleheads on CNBC this morning said there is no technical resistance to 5%. Luckily sold all my long duration last month when the 10 year took a dip and am chomping at the bit to get back in. Some of the long duration, non callable GSE's are starting to look real appealing at the plus 5% range. Also looking to jump back into those 20 year JPM non callable notes with 5.625% coupon if the yield hits 6% (cusip 46625HJM3).

This may become exactly one of the "opportunities" I have been referring to.

 

[dobig]

This may become exactly one of the "opportunities" I have been referring to.

Oh I've been paying attention.


Earlier this morning my wife asked me why I had a mischievous look on my face. I told her good things were happening.

 

[audreyh1]

This week’s T-Bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912797GT8	08/22/2023	5.280%	5.390%	$99.589333
8-Week	No	912797HB6	08/22/2023	5.280%	5.412%	$99.178667
13-Week	No	912797FK8	08/17/2023	5.295%	5.456%	$98.661542
17-Week	No	912797HV2	08/22/2023	5.305%	5.490%	$98.246403
26-Week	No	912797GN1	08/17/2023	5.290%	5.526%	$97.325611

 

[Out-to-Lunch]

DQOTD: Is it this simple?

Earlier this year, I realized some long-term capital gains (TGH). I would like to keep these funds liquid because I am looking for a new house. At the moment, I have these funds in a MM paying ~5.2%.

When realizing the gains, I calculated that I could keep my total taxable income below the top of the 0% cap gains bracket (i.e., below $89,250, MFJ), but I cut it pretty fine. Meanwhile, the interest from the MM is pushing me close to the limit, such that I am likely to be within a few hundred dollars of going over. Although the loss in dollars would be small, it would irk me to land in the shadow 27% marginal tax bracket. Therefore, it would be nice to push some of the interest income to next year.

Is the solution as simple as just buying a T-bill that matures next January?

The house hunt is not going well, but presumably I could sell the T-bill if the right house comes along.

 

[pb4uski]

^^^ Yes, it is that simple. Or move money from the money market fund into a muni bond money market fund so less interest income is taxable.

 

[ITTN]

I have been alternating between 1 mo CDs and 4 wk T-Bills since January for the same reason, to have cash on hand for a house purchase.

 

[Dash man]

DQOTD: Is it this simple?



Earlier this year, I realized some long-term capital gains (TGH). I would like to keep these funds liquid because I am looking for a new house. At the moment, I have these funds in a MM paying ~5.2%.



When realizing the gains, I calculated that I could keep my total taxable income below the top of the 0% cap gains bracket (i.e., below $89,250, MFJ), but I cut it pretty fine. Meanwhile, the interest from the MM is pushing me close to the limit, such that I am likely to be within a few hundred dollars of going over. Although the loss in dollars would be small, it would irk me to land in the shadow 27% marginal tax bracket. Therefore, it would be nice to push some of the interest income to next year.



Is the solution as simple as just buying a T-bill that matures next January?



The house hunt is not going well, but presumably I could sell the T-bill if the right house comes along.

Another option is Ally Bank has a no penalty CD paying 4.55%. Interest is a little lower but isn’t paid until either maturity or you cashing in early.

 

[jazz4cash]

DQOTD: Is it this simple?



Earlier this year, I realized some long-term capital gains (TGH). I would like to keep these funds liquid because I am looking for a new house. At the moment, I have these funds in a MM paying ~5.2%.



When realizing the gains, I calculated that I could keep my total taxable income below the top of the 0% cap gains bracket (i.e., below $89,250, MFJ), but I cut it pretty fine. Meanwhile, the interest from the MM is pushing me close to the limit, such that I am likely to be within a few hundred dollars of going over. Although the loss in dollars would be small, it would irk me to land in the shadow 27% marginal tax bracket. Therefore, it would be nice to push some of the interest income to next year.



Is the solution as simple as just buying a T-bill that matures next January?



The house hunt is not going well, but presumably I could sell the T-bill if the right house comes along.

Yeah it is that simple but only the few marginal dollars above the threshold get taxed at 27%. Is it really worth it?

 

[Out-to-Lunch]

Thanks everyone! I appreciate the feedback and ideas.

 

[11522914]

Once it breaks the 52 week high of 4.333 it's to the moon.[emoji848]

10 Year Treasury just broke through 4.333%, now at 4.3460%. Will be interesting to see if it can close today above 4.333%.

 

[copyright1997reloaded]

10 Year Treasury just broke through 4.333%, now at 4.3460%. Will be interesting to see if it can close today above 4.333%.

For those interested, the 2, 5, and 7 year notes all have new issues being auctioned next Monday (8/28). CUSIPS should show up for orders on Thursday (8/24). The 3 year and 10 year (reissue on the 10) auctions are scheduled for 9/11 (3-year) and 9/12 (10-year).

 

[Trooper]

For those interested, the 2, 5, and 7 year notes all have new issues being auctioned next Monday (8/28). CUSIPS should show up for orders on Thursday (8/24). The 3 year and 10 year (reissue on the 10) auctions are scheduled for 9/11 (3-year) and 9/12 (10-year).

Not sure why, but I am staying short, mainly with 26-week Bills. Today's came in at 5.531%.

 

[copyright1997reloaded]

Not sure why, but I am staying short, mainly with 26-week Bills. Today's came in at 5.531%.

Same here, but might start nibbling longer if the mid-term range continues to rise.

 

[tulak]

Started building a TIPS ladder today to deal with SORR. YTM over 2%.