Community Chat

[biancardi]

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@MyGirlsMom wrote:

Close: OVER SIX HUNDRED points

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I was just about to post this

Dow surges more than 600 points, snapping a 6-day losing streak with the biggest daily point gain since 2008.

[151949]

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@esmeraldagooch wrote:

China's GDP -1 percent.  They are liquidating US treasuries alarming rates.  100 billion $ since the first of the year.

 If others decide to dump us also, were in big trouble.

hope you don't own bonds...

http://www.zerohedge.com/news/2015-08-26/dow-follows-biggest-crash-lehman-third-biggest-one-day-surg...

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I don't understand what this means - can you explain? You mean treasury bonds?

[esmeraldagooch]

Open the link and read the graphs.

[MyGirlsMom]

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@151949 wrote:

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@esmeraldagooch wrote:

China's GDP -1 percent.  They are liquidating US treasuries alarming rates.  100 billion $ since the first of the year.

 If others decide to dump us also, were in big trouble.

hope you don't own bonds...

http://www.zerohedge.com/news/2015-08-26/dow-follows-biggest-crash-lehman-third-biggest-one-day-surg...

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I don't understand what this means - can you explain? You mean treasury bonds?

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It means the website says the sky is falling. LOL

[esmeraldagooch]

Actually they sold 100 billion in the last two weeks.

http://www.zerohedge.com/news/2015-08-26/bill-gross-asks-64-trillion-question-china-dumping-treasury...

[onewhiteSparrow]

Now that the US dollar has gone up so much against every other major currency, we've started to get countries across the world who borrowed in dollars and who now have to pay back in their own currencies watching their stock markets go south in a replay reminiscent of the late 90's Asian crisis.

[novamc1]

Against my better judgment about jumping into a conversation like this, let me just ask a question that perhaps a true fact-checker can answer, because some fact-checking seems to be in order on this subject.

The fact as I see it from what is happening to prices in the bond funds I own in my IRA and from the numbers provided on screen throughout the day on CNBC, people from around the world are still flocking to purchase U.S. Treasury bonds, because they are the safer bet against all other types of global debt these days.

The yield on the U.S. 10-year  Treasury bill fell quite a bit this week, while the price of the bonds people are holding went up---good thing for me, so I transferred some money out of two U.S bonds funds into the S&P 500 fund when the S&P stock index fell last Friday.  Good thing also for homebuyers, because the 10-year U.S. bond yield is the benchmark that helps determine home mortgage rates.

If China wants to dump U.S. bonds, good for them.........people elsewhere seem to be gobbling them up---or can someone correct me on this?

[onewhiteSparrow]

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@novamc1 wrote:

Against my better judgment about jumping into a conversation like this, let me just ask a question that perhaps a true fact-checker can answer, because some fact-checking seems to be in order on this subject.

The fact as I see it from what is happening to prices in the bond funds I own in my IRA and from the numbers provided on screen throughout the day on CNBC, people from around the world are still flocking to purchase U.S. Treasury bonds, because they are the safer bet against all other types of global debt these days.

The yield on the U.S. 10-year  Treasury bill fell quite a bit this week, while the price of the bonds people are holding went up---good thing for me, so I transferred some money out of two U.S bonds funds into the S&P 500 fund when the S&P stock index fell last Friday.  Good thing also for homebuyers, because the 10-year U.S. bond yield is the benchmark that helps determine home mortgage rates.

If China wants to dump U.S. bonds, good for them.........people elsewhere seem to be gobbling them up---or can someone correct me on this?

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Are we worried?  Not really.  Now is a time to revaluate current holdings and confirm their place in the portfolio but, by all means, it is not a time to just sell because prices are going down.  We love the dividends we get from our stock holdings.  Today they are almost double on average what we can get from holding a 10-year Treasury Bond.  

Best to be diversified globally.  

Despite their short-term risks, emerging markets will likely be the best performing markets over the next cycle.  Now is an excellent time to look for investments that other people are selling indiscriminately; it's a good time to hold alternative investments such as hedge funds, private equity and the like, as they can buffer your declines.

It is not a bad time to look at your mortgage.  Rates on 10-year Treasuries are in the 2% range.  It's a great time to lower your long term interest costs if you can.  

About 7 years ago, we had a systemic crisis that truly threatened the global economy.  This isn't that.  It may be bumpy and things may get messy, but if anything these are opportunities not reasons to jump ship on investments positioned for your long term goals.

[novamc1]

To poster 151949--

Don't feel sorry if you happen to own US. bonds.  They are an important part of everyone's portfolio and the safest way to hold onto your money, even if they don't gain you much with yields so low these days.  After a certain age, bond funds are  not a bad place to store your cash reserves.

While there is always downside risk to owning bonds, it doesn't compare to the downside risk of owning stocks.  Risk vs. reward---stocks can be rewarding but you take a lot of risk owning them.

[esmeraldagooch]

Since bonds do best when interest rates are low the FED raising interest rates should worry some.  Investors who invested in bonds in the city of Birmingham ,Alabama got the shaft twice when the sewer bonds many assumed were safe went bankrupt.  That woke me up never to trust cities. Now more cities have or are going in the same direction.