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Meantime the yield on the ten year treasuries still near historical lows -- -- just when you think people are gonna -- A risk free asset they come right back one point 57% on the tenure today.
How long and how low will these rates day.
Billion dollars in assets.
But it -- to save.
Any thing this -- seeing that wall basically change the way people feel about treasury market in the near on.
I don't really thanks so there's there would it would take two things you're to solve -- problems.
And now I think we all know that's gonna -- go a long period of time a whole lot of bumps in the road.
And second the economy getting a lot stronger and we just ideas and number.
This morning first time that it's dropped below fifty.
Since mid 2009.
Certainly not a good fuel toward the economy right at the moment looks like -- one of those air pockets where.
GDP is gonna escape closer to.
20 -- -- on the higher side right.
Now who think Israelis ties talk about what risk free assets -- risky assets and people seem to think it's like treasuries vs stocks.
But if you as you pointed -- have pointed out in the past.
That risk assets and fixed in com have actually first six months of this year -- outperform treasuries.
Explain that Bob is it just people are choosing fixed income over stocks and do you think that it can continue.
-- you're right for example -- take investment grade corporate bonds.
-- excess return above a -- this same maturity treasury was up two -- half percent for first quarter high yield was up five point 8%.
So I think what a lot of people were banking on was that corporate America as we all know continues to be very good shape in terms of cash -- and paying down debt.
And people moved into a corporate bonds.
During the first fifteen year they were also looking for.
-- -- Right now I would say that those markets are -- fair value our work right now but.
So proud we represent a good place to be with the least a portion of your mind.
What they knew we left out at municipal them.
In terms of the -- category a fixed income assets sure -- talk about municipal bonds though and the potential.
For cash flow.
This -- didn't want that we're in in the Muni market.
-- interest -- saying.
If you look at the amount of securities torture being called -- -- assure.
Maturities and just a -- rolled out coupon reinvestment.
The amount of money there's going to be available free investments going to hit an all time high.
-- his thirty municipal market so that's going to be a significant tail wind.
To municipal performance.
And you -- this time year issuers are not coming in the market with a lot of -- -- so that's probably gonna put downward pressure on non municipal yields.
And Bob what about that the bankruptcy of Stockton because it you know -- pressure downward pressure on yields made that and the -- nice fat price rally in those securities.
There are you concerned.
With the biggest bankruptcy in stock and that this is the beginning of bigger trend of a bigger wave of these bankruptcies and how would how do you play that with -- Muni market itself.
With regard to -- man dollar local governments there are definitely in trouble for a lot of different reasons primarily because of our personnel cost and -- higher pension costs.
That said last week the government accounting standards -- came out was.
New rules in terms -- calculating pension.
Short -- are gonna show higher numbers -- you think that's a bad thing for you we all know.
And the -- municipal business that this have been a problem for some time what do -- what we thank is that transparency is a good disinfectant.
And naturally going to.
Put the eyes of particularly it's tax payers and voters.
-- on this problem.
And we saw over last couple weeks and -- day.
And San Diego unity here we are two cities.
And in a blue state now liberal state and they vote in referendums a cut back pensions for public employees.
So I think that's going to be good thing that credit -- were municipal market going forward Bob.
It was great to see you as always transparency is a good disinfectant that's -- -- whether -- -- pink.
Bob thank you so much there either have busy -- about our Werner at a fixed income at vanguard.
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