I also notice the media aren't rushing to report the recent huge rally in Irish Government bonds across the curve and yet when they were falling, we were getting hourly updates.
I wondered about this too, altho disaster and panic make for better news!
I think this morning I heard yields were around the 9.? mark. Surely this is good news or am I reading this wrong? If Italy and Spain can borrow at 6.? then we aren't that far off those levels. The forecast is stable from S&P too. Am I missing something here, or is it likely we could be back into bond markets in the not too distant?
Which is the more important Sunny? 10 yr or 1 yr or whatever. Or is there any significance between them in terms of their importance to us?
I just remember reading headlines in most media outlets when yields hit 14%.
10 year is the one the commentators latch onto. At the moment, there is no real difference because we can't borrow for any length and the shorter maturities are trading at similar levels. Obviously it is more encouraging if you see investors buy longer dated paper purely as a sign of confidence.
Rightio. Thanks. The news report this am suggested significant American interest in Irish 10 yr bonds, so that looks good I suppose. I wonder do these lads buy them discounted on the secondary market, and at what interest rate ? Or is the interest rate whatever the original bond was issued for? It sounds lucrative, even if somewhat risky. I also wonder can anyone buy these?
The prices and yields quoted and for existing bonds being traded on the bond market. Anyone can buy them through a broker, but there may be minimum purchase amounts involved.
Agree with Sunny that bond markets are still hugely volatile and we could well be back above 10% next week. I think what has added to the appeal of junk bonds is that a lot of investors have pulled out of stocks in the last 2 weeks, i.e. the perceived risks involved in stocks increased, which made bonds of all kinds, including junk ones, more attractive to some.
I assume that the traded bonds are for the original issued interest rate. Is this correct?
Isn't it also true that both Japan and Italy have lower borrowing costs (despite high debt levels) because so much of the debt is held by citizens and institutions of these countries? Would it not make eminent sense for the gov't to offer these for sale to Irish people on some discounted buy-back and re-sell principle. Where the bonds would be bought back at a discounted rate, and re-sold to Irish citizens and institutions, and a small margin would be taken by the gov't. It could also be helped by a tax strategy that acknowledges the risk involved and discounts profits made. This surely would be a win -win for everyone?
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