U.S. to Reissue 30-Year Bond WSJ

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Hi WW.

I guess I should of left crock out of my last post. :shock:.

30 years goes from 4.44 to the historic yield average safe would not be the word you would choice for this investment.

Each 1% increase in yield will mean around 10% loss in NAV.

:shock: 30 years goes to 8% that would mean a 40% loss in your investment. After taxes and inflation you will be down around 80%.

Sign me up. :^

 

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DMA wrote:

safe :shock::s What a crock!!!!!!!!!!!!

DMA!

 

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safe :shock::s

What a crock!!!!!!!!!!!!

 

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U.S. to Reissue 30-Year Bond Starting in 1st Quarter of 2006

August3,20059:21a.m.

The Bush administration announced Wednesday that it is bringing back the 30-year Treasury bond next year, a move that would help finance the national debt and should hold appeal for investors looking for a safe, longer-term investment option in their portfolios.

The Treasury Department said the first auction of the 30-year bond will take place in the first quarter of 2006, with auctions held twice a year.

"We believe this is a prudent debt management step that will continue to allow Treasury to finance the government's borrowing needs at the lowest cost over time," said Randal Quarles, the department's undersecretary for domestic finance.

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Wall Street has been lobbying for a return of the 30-year bond. When Treasury Secretary John Snow visited a Chicago exchange during last fall's presidential campaign, traders greeted him with chants of "30, 30, 30." But the Treasury Department refused to publicly consider the matter until early May, when, in a sudden reversal, it said it would consider a resurrection.

The Treasury stopped selling new 30-year bonds in 2001, a time when the government expected to be running budget surpluses and reducing the national debt. As a result, the market no longer has any true 30-year government securities: The "longest" Treasury bond -- the last one sold in 2001 -- now matures in 26 years.

The reissuance of the 30-year Treasury will restore a familiar benchmark -- a sort of anchor that defines the safest possible long-term rate of return investors can earn. That rate helps the market figure out how much interest to charge other, riskier borrowers, from companies to foreign governments.

With the benchmark back in place, professional investors and traders will be able to make bets that mightn't otherwise have been possible. In a recent survey conducted by the Bond Market Association, a trade group, almost all of the 91 investors polled said they would be more likely to trade long-term securities if the Treasury brought back the 30-year bond.