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Author Topic: "Blood Bath" in Bonds?  (Read 254 times)

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HawgWild

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"Blood Bath" in Bonds?
« on: January 10, 2018, 12:58:04 pm »

A few years back we had some members predicting a "blood bath" in bonds that never materialized. I heard that term mentioned again this morning with regard to China's announcement that they were paring back their buying of US debt.

Can some of you more learned ones expand on this in layman's terms? What's this effect on the various investments?

TIA
« Last Edit: January 10, 2018, 02:19:28 pm by HawgWild »
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NuttinItUp

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Re: "Blood Bath" in Bonds?
« Reply #1 on: January 10, 2018, 01:32:52 pm »

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HawgWild

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Re: "Blood Bath" in Bonds?
« Reply #2 on: January 10, 2018, 03:50:06 pm »

So, good for Financials, dividend payers, not so much? Looks like it could hamper infrastructure. What impact on national debt? It becomes more onerous?
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Vantage 8 dude

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Re: "Blood Bath" in Bonds?
« Reply #3 on: January 10, 2018, 04:54:14 pm »

A few years back we had some members predicting a "blood bath" in bonds that never materialized. I heard that term mentioned again this morning with regard to China's announcement that they were paring back their buying of US debt.

Can some of you more learned ones expand on this in layman's terms? What's this effect on the various investments?

TIA
Two initials: B.S.
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HawgWild

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Re: "Blood Bath" in Bonds?
« Reply #4 on: January 10, 2018, 06:36:55 pm »

Two initials: B.S.

Can you expand on this a little?
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HoginMemphis

Re: "Blood Bath" in Bonds?
« Reply #5 on: January 11, 2018, 09:39:27 am »

Can you expand on this a little?
Provide more color? Get a bit more granular?

Ha.

My simple mind tells me less buyers may cause higher rates to be offered to entice a buyer. Rates rising = existing bonds principal price decline.

This is when client A phones financial advisor after seeing their mid-year statement and says, "I thought you told me you can't lose money in investment grade bonds and bond funds?" Key in that question is, "you". Even if YOU never said that, the client will remember that you did.

Interest rates rise, interest expense for federal gov't rises, consumer interest rates rise, less $ to go around to other things for both gov't and its citizenry with debt. Dollar gets stronger. Energy prices rise with rising dollar value. Get some inflation, on and on and on.
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