Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yielded "3.5 basis points" less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Co. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.
This is a major concern that has not drawn a lot of attention in the main-stream media. I can not remember a time when interest rates on private debt was ever lower than on Treasury debt. This is extremely alarming! The bond market is saying that, in terms of credit risk, some private companies are safer that the U.S. Government. Why? Because our government continues its way of deficit spending, especially with this "new" health bill.
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