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Citigroup's chief financial officer, John C. Gerspach, said on Tuesday that his bank held no Treasuries that come due in October.
And a new paper by Francis Warnock and Veronica Cacdac Warnock, of the University of Virginia, published by the Fed, finds that if foreign central banks had bought no Treasuries over the past year, ten-year yields would be 60 basis points higher.
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There's no treasury, no ministry of finance, no central bank, nowhere to put the reconstruction money.
The delays are inevitable, most experts say, stemming from the nature of the European Union and its own institutional voids: no single government, no single treasury, no effective fiscal coordination, no mechanism for crisis management.
Burrowing into low- or no-yield Treasurys is a losers game.
Underwritings of 10-year BBB debentures come to market with narrowing spreads over 10-year Treasuries, no more than 150 basis points, some deals less.
But what happens if U.S. Treasuries no longer fit that bill?
After the Battle of Plassey in 1757, a victory that owed more to treachery, forged contracts, bankers and bribes than military prowess, he transferred to the EIC treasury no less than £2.5m seized from the defeated rulers of Bengal – in today's currency, around £23m for Clive and £250m for the company.
The authors of Dow 36,000 simply assume that stocks are no riskier than Treasurys, and therefore, should sell at prices that make dividend yields plus dividend growth equal to bond yields.
Except that Treasuries may no longer seem as safe as they once did.
It assumes 10-Year Treasuries yield no more than 4.5% and the markets valuation multiplier ranges between 15 and 16.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com