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70 Pages«<67686970>
Treasury Bills and Bonds
winmak
#1361 Posted : Wednesday, March 04, 2020 1:11:25 PM
Rank: Member


Joined: 12/1/2007
Posts: 496
Location: Nakuru
amorphous wrote:
Angelica _ann wrote:

Tell us in black & white, we are all ears!!!


I am all eyes as well Anxious Anxious Anxious
his answer promises to be quite entertaining Laughing out loudly
And let's remember this is a forum for serious talk about wealth!


The answer is looking at you NEW MONEY Laughing out loudly Laughing out loudly Laughing out loudly
For investors as a whole, returns decrease as motion increases ~ WB
amorphous
#1362 Posted : Wednesday, March 04, 2020 1:15:27 PM
Rank: Member


Joined: 5/15/2019
Posts: 144
Location: planet earth
winmak wrote:
amorphous wrote:
Angelica _ann wrote:

Tell us in black & white, we are all ears!!!


I am all eyes as well Anxious Anxious Anxious
his answer promises to be quite entertaining Laughing out loudly
And let's remember this is a forum for serious talk about wealth!


The answer is looking at you NEW MONEY Laughing out loudly Laughing out loudly Laughing out loudly


Indeed! Laughing out loudly Laughing out loudly Laughing out loudly
slick
#1363 Posted : Wednesday, March 04, 2020 2:10:41 PM
Rank: Member


Joined: 6/1/2017
Posts: 266
Lets do a simple comparison

Kenyan treasuries


Kenyan 3 month bill yield +7.315%
Kenyan 10 year bond yield +12.35%

Relative good return on Kenyan bonds

US treasuries


US 1 month bill yield +1.41%
US 10 year bond yield +0.95%

Now thats weird,how can the US 1 month bill yield more than the 10 year bond?Why then would an investor first buy bonds that yield so little and have real negative yield (if one takes into account US inflation rates are slightly above 2%) so its a guaranteed loss at least in terms of real yield returns.Why would one hold a bond for 10 years to get less yield return than 1 month bill??Nuts isnt it.Well its the infamous yield curve inversion that occurs in the US a few months before a recession.

Gets even nuttier

German Treasuries


German 1 month bill yield -0.53%
German 10 year bond yield -0.65%

What negative yields on bonds??Thats right.At some point last year the whole German government bond market was negative yielding.How the hell do you make money on negative yielding bonds?If you buy the bond and hold it to maturity its a guaranteed loss but investors in Eurozone and Japan have become savvy enough to know not to hold these bonds to maturity but sell them in the secondary market at higher bond prices (thus even more negative yields) and the final sucker who buys the bond and holds to maturity suffers a loss.Most times its the central banks that hold the bonds to maturity and lose the money but they are central banks (they dont lose money if they are the ones who create money in the first place). Governments love these bonds.They get paid to borrow as opposed to the reverse (ie governments pay to borrow cash).70% of Eurozone's and Japanese sovereign debt is negative yielding and 1/3 of the entire world's bond market is negative yielding.Now that's weird but its just how it is
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
slick
#1364 Posted : Wednesday, March 04, 2020 3:13:13 PM
Rank: Member


Joined: 6/1/2017
Posts: 266
slick wrote:
Lets do a simple comparison

Kenyan treasuries


Kenyan 3 month bill yield +7.315%
Kenyan 10 year bond yield +12.35%

Relative good return on Kenyan bonds

US treasuries


US 1 month bill yield +1.41%
US 10 year bond yield +0.95%

Now thats weird,how can the US 1 month bill yield more than the 10 year bond?Why then would an investor first buy bonds that yield so little and have real negative yield (if one takes into account US inflation rates are slightly above 2%) so its a guaranteed loss at least in terms of real yield returns.Why would one hold a bond for 10 years to get less yield return than 1 month bill??Nuts isnt it.Well its the infamous yield curve inversion that occurs in the US a few months before a recession.

Gets even nuttier

German Treasuries


German 1 month bill yield -0.53%
German 10 year bond yield -0.65%

What negative yields on bonds??Thats right.At some point last year the whole German government bond market was negative yielding.How the hell do you make money on negative yielding bonds?If you buy the bond and hold it to maturity its a guaranteed loss but investors in Eurozone and Japan have become savvy enough to know not to hold these bonds to maturity but sell them in the secondary market at higher bond prices (thus even more negative yields) and the final sucker who buys the bond and holds to maturity suffers a loss.Most times its the central banks that hold the bonds to maturity and lose the money but they are central banks (they dont lose money if they are the ones who create money in the first place). Governments love these bonds.They get paid to borrow as opposed to the reverse (ie governments pay to borrow cash).70% of Eurozone's and Japanese sovereign debt is negative yielding and 1/3 of the entire world's bond market is negative yielding.Now that's weird but its just how it is


Eurozone and Japanese treasuries are so toxic that investors have been running away from these treasuries seeking paltry but at least positive yielding US bonds.These investors gamble on capital gains on the secondary market and when the bonds near maturity they sell them to the commercial/investment banks who in turn sell them to the European and Japanese central banks to eat the losses at maturity.Also,these investors are forced by law to allocate a specific percentage of their portfolio to bonds so have no choice to buy them but try their best to sell them before maturity.So how did bonds become negative yielding?In the post 2008 meltdown and the 2010-2012 European sovereign debt crisis,bond yields rose so rapidly as investors dumped them and to prevent the collapse of these treasury markets,the central banks stepped in to buy them as a last resort.So many bonds were bought by the central banks that yields flipped to negative.The European Central Bank holds 1/3 of the entire Eurozone treasury market and the Bank of Japan holds over 1/2 of Japanese bonds.

As a consequence,banks especially in Europe have been reeling from negative interest rates.Banks in Italy,Spain,Greece are perpetually in distress needing central bank bailouts.Germany's largest bank ie Deutsche Bank is a massive loss making bank and stock had gone down over 90% ever since the 2008 pre meltdown time.Also,some European Banks are charging high net worth accounts a negative rate for depositing money with them.This is over and above the monthly ledger fee that all banks in the world charge depositors.Thus some investors prefer to keep cash "under the matress" than deposit into the banks and be charged.In Japan safes sales are hot as they prefer keeping cash in safes as opposed to being charged to deposit in the bank








https://www.reuters.com/...ters-poll-idUSL3N16W2Y8


Also,some Danish banks are offering negative interest rate mortgages.Now thats just crazy.Ok,its not entirely negative as there are overhead bank charges but the base rate is negative




https://www.cnbc.com/201...ive-interest-rates.html

So banks charging customers for deposits thus clients flee from depositing money in the bank,then banks offer very low interest rates for loans like mortgages and even negative rates in Denmark so isnt it obvious why banks especially in Europe are suffering as they cant make money.Look at Germany's largest bank ie Deutsche Bank stock price




Mad world post 2008 financial crisis Laughing out loudly Laughing out loudly
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
amorphous
#1365 Posted : Wednesday, March 04, 2020 4:15:12 PM
Rank: Member


Joined: 5/15/2019
Posts: 144
Location: planet earth
slick wrote:
Lets do a simple comparison

Kenyan treasuries


Kenyan 3 month bill yield +7.315%
Kenyan 10 year bond yield +12.35%

Relative good return on Kenyan bonds



Slick,
The moral of your long story is flee US, Japanese, German and allied bonds and invest in Kenyan bonds prontoDrool Drool .
We all know treasuries of those economies are a scam based on what happened in the heavy rigging of the derivatives market + subprime sanctioned by the rating agencies! The real collapse to come in those economies will make 2007/2008 look like child's pansies as all those governments did was kick the can down the road by starting to buy back their own treasuries at near zero rates because there were few to no takers in the marketLaughing out loudly
slick
#1366 Posted : Wednesday, March 04, 2020 4:28:59 PM
Rank: Member


Joined: 6/1/2017
Posts: 266
amorphous wrote:
slick wrote:
Lets do a simple comparison

Kenyan treasuries


Kenyan 3 month bill yield +7.315%
Kenyan 10 year bond yield +12.35%

Relative good return on Kenyan bonds



Slick,
The moral of your long story is flee US, Japanese, German and allied bonds and invest in Kenyan bonds prontoDrool Drool .
We all know treasuries of those economies are a scam based on what happened in the heavy rigging of the derivatives market + subprime sanctioned by the rating agencies! The real collapse to come in those economies will make 2007/2008 look like child's pansies as all those governments did was kick the can down the road by starting to buy back their own treasuries at near zero rates because there were few to no takers in the marketLaughing out loudly


@amorphous
Exactly.You nailed it completely.But US bond market especially the 10 year note is the deepest,most liquid
and apparently "safest" asset class backed by the full faith and credit of the US superpower state and the Fed Quantitative Easing shenanigans that creates new dollars from nothing and buys the bonds to keep interest rates suppressed hence the government remains solvent.The US wants to spend 750 billion on the military.No worries,treasury issues the bonds sells them to the Wall Street Banks who then sell to the Fed that buys from newly created dollars and walaa a new aircraft carrier,F-35 jet fighter and so forth.If rates in the developed world went even to 5%,they would collapse as interest payments would be too high.Fed raised rates to just 2.5% in 2018 and the stock market fell 20% in 3 months and junk bond market completely froze up with no new bond issuance for 41 days.The European and Japan central bank rates are negative and they cannot dare take them back to positive.That's why central banks have to keep buying government treasuries to keep rates low and borrowing even cheaper and in the case of Denmark borrowing costs are negative.
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
Angelica _ann
#1367 Posted : Tuesday, April 07, 2020 8:40:41 AM
Rank: Elder


Joined: 12/7/2012
Posts: 11,486
Infrastructure bond interest to be subjected to 10% withholding tax, proposal in the 2020/2021 budget, Jubilee yawa - isorite!
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
Impunity
#1368 Posted : Tuesday, April 07, 2020 9:24:58 AM
Rank: Elder


Joined: 3/2/2009
Posts: 26,244
Location: Masada
Angelica _ann wrote:
Infrastructure bond interest to be subjected to 10% withholding tax, proposal in the 2020/2021 budget, Jubilee yawa - isorite!


Why like this now?
Kwanza the coupon is low,10% instead of 12%...then apply 10% tax like if it were a Treasury bond.
Useless nuts
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.

Esstiko
#1369 Posted : Tuesday, April 07, 2020 6:10:54 PM
Rank: New-farer


Joined: 6/5/2019
Posts: 17
Strange thought IBs are exemptedLiar
Angelica _ann wrote:
Infrastructure bond interest to be subjected to 10% withholding tax, proposal in the 2020/2021 budget, Jubilee yawa - isorite!

Ericsson
#1370 Posted : Tuesday, April 07, 2020 7:33:26 PM
Rank: Elder


Joined: 12/4/2009
Posts: 8,402
Location: NAIROBI
Impunity wrote:
Angelica _ann wrote:
Infrastructure bond interest to be subjected to 10% withholding tax, proposal in the 2020/2021 budget, Jubilee yawa - isorite!


Why like this now?
Kwanza the coupon is low,10% instead of 12%...then apply 10% tax like if it were a Treasury bond.
Useless nuts


Jubilee will come to tax every single cent you have
Angelica _ann
#1371 Posted : Wednesday, April 08, 2020 10:23:18 PM
Rank: Elder


Joined: 12/7/2012
Posts: 11,486
Jubilee gava & appetite for taxation....

The Tax (Amendment) Bill 2020 is proposing introduction of value added tax (VAT) on brokerage services that are now VAT-exempt.

The bill wants an amendment to the first schedule, number 35 of VAT Act 2013 and introduce the 14 percent tax on insurance agency, insurance brokerage, securities brokerage services, tea and coffee brokerage.

Kasib warns that the tax will lead to an increase in the cost of stockbrokerage, which will ultimately be paid by investors.
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
Ericsson
#1372 Posted : Thursday, April 09, 2020 8:07:01 AM
Rank: Elder


Joined: 12/4/2009
Posts: 8,402
Location: NAIROBI
Angelica _ann wrote:
Jubilee gava & appetite for taxation....

The Tax (Amendment) Bill 2020 is proposing introduction of value added tax (VAT) on brokerage services that are now VAT-exempt.

The bill wants an amendment to the first schedule, number 35 of VAT Act 2013 and introduce the 14 percent tax on insurance agency, insurance brokerage, securities brokerage services, tea and coffee brokerage.

Kasib warns that the tax will lead to an increase in the cost of stockbrokerage, which will ultimately be paid by investors.


That is obvious
amorphous
#1373 Posted : Monday, April 20, 2020 3:35:21 PM
Rank: Member


Joined: 5/15/2019
Posts: 144
Location: planet earth
cbk wamechelewo leo? No interest payment yet and 5pm is fast approaching! Anyone received theirs already today?
Swenani
#1374 Posted : Monday, April 20, 2020 3:49:07 PM
Rank: User


Joined: 8/15/2013
Posts: 13,112
Location: Vacuum
amorphous wrote:
cbk wamechelewo leo? No interest payment yet and 5pm is fast approaching! Anyone received theirs already today?


ponzi schemesmile smile smile smile
If Obiero did it, Who Am I?
AndyC
#1375 Posted : Monday, April 20, 2020 6:53:49 PM
Rank: Member


Joined: 4/21/2015
Posts: 131
amorphous wrote:
cbk wamechelewo leo? No interest payment yet and 5pm is fast approaching! Anyone received theirs already today?


Received mines few minutes to 1800hrs.
ibsi
#1376 Posted : Monday, April 20, 2020 7:13:22 PM
Rank: New-farer


Joined: 5/7/2010
Posts: 37
Location: Nairobi
Still waiting for mine.
Trust in God and endure patiently.
amorphous
#1377 Posted : Tuesday, April 21, 2020 9:52:25 AM
Rank: Member


Joined: 5/15/2019
Posts: 144
Location: planet earth
AndyC wrote:
amorphous wrote:
cbk wamechelewo leo? No interest payment yet and 5pm is fast approaching! Anyone received theirs already today?


Received mines few minutes to 1800hrs.


Received my at 9.10pm which means it must be a bank issue not an issue with CBK as RTGS does not operate that late aama? I bank with SC. What a relief, I thought CBK was about to default on its domestic debt Laughing out loudly
whiteowl
#1378 Posted : Tuesday, April 21, 2020 7:52:28 PM
Rank: Veteran


Joined: 4/16/2014
Posts: 1,412
Location: Bohemian Grove
Ericsson wrote:
Impunity wrote:
Angelica _ann wrote:
Infrastructure bond interest to be subjected to 10% withholding tax, proposal in the 2020/2021 budget, Jubilee yawa - isorite!


Why like this now?
Kwanza the coupon is low,10% instead of 12%...then apply 10% tax like if it were a Treasury bond.
Useless nuts


Jubilee will come to tax every single cent you have


They even tax tax-free bonds. Yes,you read that right.
murchr
#1379 Posted : Wednesday, April 22, 2020 9:24:42 PM
Rank: Elder


Joined: 2/26/2012
Posts: 15,529
Today in parliament

Quote:
PAYE reduced to 25% , Clause on Corporate Tax introduced which cuts rates to 25% from 30%, Infrastructure Bonds, tax exempt, Turnover tax reduced to 1%, applies to firms with revenues of above KES 1M.
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
Impunity
#1380 Posted : Friday, April 24, 2020 11:42:14 AM
Rank: Elder


Joined: 3/2/2009
Posts: 26,244
Location: Masada
amorphous wrote:
AndyC wrote:
amorphous wrote:
cbk wamechelewo leo? No interest payment yet and 5pm is fast approaching! Anyone received theirs already today?


Received mines few minutes to 1800hrs.


Received my at 9.10pm which means it must be a bank issue not an issue with CBK as RTGS does not operate that late aama? I bank with SC. What a relief, I thought CBK was about to default on its domestic debt Laughing out loudly


Which paper was this ?
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.

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