Friday, February 06, 2009
Big Bad Voodoo Bonds
The moment has passed. This is the 10 year. Anybody glad they bought those 2.14159%s as a deflation hedge? What is the NPV of a Dec '18 2.1% in a 4% world? About $85. Ouch.
California took another ratings hit today. Still a long way to go and the States' lenders still have no clue. The Sacramento line is that debt always gets paid first. The Treasurer was just on the financial entertainment network saying exactly that. He even went so far as to say bondholders get paid before medical treatment for children. Anybody want to take the over on how long that bet lasts?