/biz/ - Business & Finance

Bond yields being inverse to bond prices is not wallstreet magic, it is simple mathematical laws at work. if the treasury issues a 10% bond at 100$ price, you receive 110 after some number of years. Bonds are a class of equity which means they trade like stocks, you can buy a bond and sell it the next day if your so desire. If supply increases greatly (selling) the price of bonds would fall; and in our example above if the price went to 50$, then a 10% yield just went to 120%, as the payoff is fixed at 110. When you see these 10, 20, 30 year bonds have LOWER %YIELD than shorter term bonds, this means the holders of the longer term bonds are taking financial losses because they could instantly sell the longer term bonds and buy shorter term bonds with A HIGHER YIELD, which would lower the price of the longer term bonds; hence driving their yield up. Why do the long term holders not behave 'rationally' and sell the 20, 30+ and instantly secure higher profit in shorter term higher yield bonds? big ass banks, hedge funds, prime brokers use these bonds as collateral and leverage them to the tits like degenerates. If one sells the price goes down and they would be margin called requiring a posting of more collateral, they are all on a wobbly structure balancing on a cliff and if any decide to climb out and leave they all die. This is my understanding and I am not aware of other macro level reasons why longer term bonds would have lower fucking yields than 1,2,3,5 year notes, literal insanity.

Nearer my God to thee...

or the tears of the swingies will be :)

we held through worse my dude, I bought from 80 cents to 17 cents... nothing can phase us linkies, we are ready to sink with the mother fucking ship playing the violin.

we are going to hodl until 0$ like the chads we are. if this ship is sinking, i'm gonna fucking sink with it playing the fucking violin.