Monday, March 22, 2010

US Treasury Notes no Longer The Safest Investment

The measure of how safe an bond is relative to another is the difference in yield. The more risk, the more interest you need to be paid to purchase it. Berkshire Hathaway Inc now has a lower yield then T-Bills. That means investors see Berkshire Hathaway as a safer investment then the Federal Government.

"The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. 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.

No comments:

Post a Comment

Related Posts with Thumbnails

Like what you read; Subscribe/Fan/Follow