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Martinghoul
Registered: Jan 2009
Posts: 5641 |
03-19-12 02:06 PM
Huh?
112 is actually pretty steep... Highest it's been is smth like 160, lowest arnd 0, mean 50, median 42 (using data from 1993 onwards).
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noob_trad3r
Registered: Nov 2008
Posts: 1733 |
03-20-12 04:28 PM
Quote from Martinghoul:
Huh?
112 is actually pretty steep... Highest it's been is smth like 160, lowest arnd 0, mean 50, median 42 (using data from 1993 onwards).
Why would I want to loan for 30 years vs 10 for such a small difference?
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nazzdack
Registered: Jul 2004
Posts: 8408 |
03-20-12 07:10 PM
Quote from noob_trad3r:
----10....
----30....
----112 basis point spread.
----Why....
----sustainable?
It's the same old "reasons":
1) The US can still be looked upon as being "creditworthy" despite the appearance of horrible underlying fundamentals. 
2) There can be excessive speculation in the market that is bullishly biased. 
3) Investors/traders are "looking for yield" and agressively buying longer-dated issues. 
4) The FED may want to maintain the ~0% "target" on fed funds longer than people expect. 
5) The 112 point spread may look "better" if you compare it to the 30-year yield instead of to itself. 
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5yrtrader
Registered: Dec 2004
Posts: 772 |
03-20-12 07:14 PM
Quote from noob_trad3r:
Why would I want to loan for 30 years vs 10 for such a small difference?
Its small only in nominal numbers, the 30yr is actually yielding 50% more than the 10yr, its a big difference if you look at it that way.
5yr
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Martinghoul
Registered: Jan 2009
Posts: 5641 |
03-20-12 07:19 PM
Quote from noob_trad3r:
Why would I want to loan for 30 years vs 10 for such a small difference?
Well, I dunno about you, but that's where the mkt is... If you think this spread should be higher, you know what to do, right?
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