Treasury Market locked up

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welderwannabe
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Treasury Market locked up

Post by welderwannabe » Mon Mar 23, 2020 8:45 am

Market makers have gone home it seems. I just went to sell a 25K 6 month bill (about 4.5 months remaining) and no active bids on Fidelity. I submitted a bid request, and it expired. Interesting times.

The most liquid market in the world isn't liquid it seems.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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whodidntante
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Re: Treasury Market locked up

Post by whodidntante » Mon Mar 23, 2020 8:47 am

Did yields go negative? You have to use the bond desk if so.

am
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Re: Treasury Market locked up

Post by am » Mon Mar 23, 2020 9:02 am

Maybe why the fed is stepping in to provide liquidity?

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welderwannabe
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Re: Treasury Market locked up

Post by welderwannabe » Mon Mar 23, 2020 9:32 am

I have submitted now 2 quote requests to fidelity's bond desk via their online system, but expired with no responses.

When I get a chance I will call as well.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

skepticalobserver
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Re: Treasury Market locked up

Post by skepticalobserver » Mon Mar 23, 2020 9:33 am

That's alarming, since the value in bills was liquidity.

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welderwannabe
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Re: Treasury Market locked up

Post by welderwannabe » Mon Mar 23, 2020 9:45 am

Tried to, Bond Desk automated thingy said 45 minutes plus on-hold.

Luckily I dont need the money right now.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

am
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Re: Treasury Market locked up

Post by am » Mon Mar 23, 2020 12:02 pm

I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?

jebmke
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Re: Treasury Market locked up

Post by jebmke » Mon Mar 23, 2020 12:03 pm

am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
When you discover that you are riding a dead horse, the best strategy is to dismount.

am
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Re: Treasury Market locked up

Post by am » Mon Mar 23, 2020 12:07 pm

jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?

the way
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Re: Treasury Market locked up

Post by the way » Mon Mar 23, 2020 12:12 pm

am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
But if rates go negative, isn't this a money-maker? Imagine, print 10T, pay back only 9T!

Turbo29
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Re: Treasury Market locked up

Post by Turbo29 » Mon Mar 23, 2020 12:13 pm

am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
The dollar index is still higher than a week, a month, or a year ago. They may not want our debt but they certainly want our currency right now.
It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either of them. --M. Twain

Turbo29
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Re: Treasury Market locked up

Post by Turbo29 » Mon Mar 23, 2020 12:14 pm

welderwannabe wrote:
Mon Mar 23, 2020 9:32 am
I have submitted now 2 quote requests to fidelity's bond desk via their online system, but expired with no responses.

When I get a chance I will call as well.
What quantities? Maybe the activity is so high right now they can't be bothered with small lots.
It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either of them. --M. Twain

MotoTrojan
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Re: Treasury Market locked up

Post by MotoTrojan » Mon Mar 23, 2020 12:15 pm

Turbo29 wrote:
Mon Mar 23, 2020 12:14 pm
welderwannabe wrote:
Mon Mar 23, 2020 9:32 am
I have submitted now 2 quote requests to fidelity's bond desk via their online system, but expired with no responses.

When I get a chance I will call as well.
What quantities? Maybe the activity is so high right now they can't be bothered with small lots.
$25K.

jebmke
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Re: Treasury Market locked up

Post by jebmke » Mon Mar 23, 2020 12:16 pm

am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
so which currency do you plan to move into? EU, CH ... Yen?
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Kenkat
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Re: Treasury Market locked up

Post by Kenkat » Mon Mar 23, 2020 12:16 pm

am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
Did you have a country in mind that meets these criteria?

am
Posts: 3387
Joined: Sun Sep 30, 2007 9:55 am

Re: Treasury Market locked up

Post by am » Mon Mar 23, 2020 12:20 pm

Kenkat wrote:
Mon Mar 23, 2020 12:16 pm
am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
Did you have a country in mind that meets these criteria?
No would have to research but Switzerland comes to mind.

Turbo29
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Re: Treasury Market locked up

Post by Turbo29 » Mon Mar 23, 2020 12:23 pm

am wrote:
Mon Mar 23, 2020 12:20 pm
Kenkat wrote:
Mon Mar 23, 2020 12:16 pm
am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
Did you have a country in mind that meets these criteria?
No would have to research but Switzerland comes to mind
The dollar is up against the Swiss Franc vs a week or a month ago.
It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either of them. --M. Twain

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welderwannabe
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Re: Treasury Market locked up

Post by welderwannabe » Mon Mar 23, 2020 1:38 pm

Turbo29 wrote:
Mon Mar 23, 2020 12:14 pm
welderwannabe wrote:
Mon Mar 23, 2020 9:32 am
I have submitted now 2 quote requests to fidelity's bond desk via their online system, but expired with no responses.

When I get a chance I will call as well.
What quantities? Maybe the activity is so high right now they can't be bothered with small lots.
$25K as others said. It is a small lot.

What seems to be missing are the market makers for this. The standing bids if you will. Ive sold $1k treasuries in milliseconds. I have never had this much trouble selling one. Its insane.
Last edited by welderwannabe on Mon Mar 23, 2020 2:20 pm, edited 1 time in total.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

Turbo29
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Re: Treasury Market locked up

Post by Turbo29 » Mon Mar 23, 2020 2:15 pm

Interesting, nothing shows for 3mo and 6mo treasuries on E*trade. All the longer maturities do. I don't have any to sell otherwise I would see if I could get a quote.
It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either of them. --M. Twain

IHateCasinos
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Re: Treasury Market locked up

Post by IHateCasinos » Mon Mar 23, 2020 6:58 pm

I think the best answer I heard Friday&today, is :
Why would anyone bother buying it at 0.09% US6M (now) and 0.185 US3M(now).
Honestly, (besides if i needed it for cover over the FDIC 250k limit), why would anyone buy any of the Tbills?
30 years for 1.3% ! Excuse me?? FOR THIRTY YEARS!!
No. Just no.

so I think you will have to wait for prices to change.
M

rascott
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Re: Treasury Market locked up

Post by rascott » Mon Mar 23, 2020 7:46 pm

welderwannabe wrote:
Mon Mar 23, 2020 1:38 pm
Turbo29 wrote:
Mon Mar 23, 2020 12:14 pm
welderwannabe wrote:
Mon Mar 23, 2020 9:32 am
I have submitted now 2 quote requests to fidelity's bond desk via their online system, but expired with no responses.

When I get a chance I will call as well.
What quantities? Maybe the activity is so high right now they can't be bothered with small lots.
$25K as others said. It is a small lot.

What seems to be missing are the market makers for this. The standing bids if you will. Ive sold $1k treasuries in milliseconds. I have never had this much trouble selling one. Its insane.

Amazing (and troubling).... any progress?

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dmcmahon
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Re: Treasury Market locked up

Post by dmcmahon » Mon Mar 23, 2020 8:14 pm

am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
Which country’s debt is better?

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welderwannabe
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Re: Treasury Market locked up

Post by welderwannabe » Tue Mar 24, 2020 6:20 am

rascott wrote:
Mon Mar 23, 2020 7:46 pm
Amazing (and troubling).... any progress?
None. Waiting on hold for 45 minutes yesterday for the Fidelity Bond Desk to answer. Gave up as it was getting close to 4PM and I figured even if they gave me a quote I may run out the clock.

I'll try again later today.

Honestly, im not desperate for the money so it is becoming more of an academic exercise. I will tell you this whole thing has changed my mind about how liquid Treasurys actually are.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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simplesimon
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Re: Treasury Market locked up

Post by simplesimon » Tue Mar 24, 2020 6:26 am

welderwannabe wrote:
Tue Mar 24, 2020 6:20 am
rascott wrote:
Mon Mar 23, 2020 7:46 pm
Amazing (and troubling).... any progress?
None. Waiting on hold for 45 minutes yesterday for the Fidelity Bond Desk to answer. Gave up as it was getting close to 4PM and I figured even if they gave me a quote I may run out the clock.

I'll try again later today.

Honestly, im not desperate for the money so it is becoming more of an academic exercise. I will tell you this whole thing has changed my mind about how liquid Treasurys actually are.
Very interested in what happens here. Thanks for sharing.

Ping Pong
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Re: Treasury Market locked up

Post by Ping Pong » Tue Mar 24, 2020 6:33 am

welderwannabe wrote:
Tue Mar 24, 2020 6:20 am
None. Waiting on hold for 45 minutes yesterday for the Fidelity Bond Desk to answer. Gave up as it was getting close to 4PM and I figured even if they gave me a quote I may run out the clock.
The bond market remains open after 4pm. It’s the stock market that closes at 4pm.

Blue456
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Re: Treasury Market locked up

Post by Blue456 » Tue Mar 24, 2020 6:37 am

welderwannabe wrote:
Mon Mar 23, 2020 8:45 am
Market makers have gone home it seems. I just went to sell a 25K 6 month bill (about 4.5 months remaining) and no active bids on Fidelity. I submitted a bid request, and it expired. Interesting times.

The most liquid market in the world isn't liquid it seems.
That is concerning. This kind of issue really makes it clear to me to never keep my safe portion of emergency fund in treasuries and stick to regular savings accounts.

long_gamma
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Re: Treasury Market locked up

Post by long_gamma » Tue Mar 24, 2020 7:02 am

jebmke wrote:
Mon Mar 23, 2020 12:16 pm
am wrote:
Mon Mar 23, 2020 12:07 pm
jebmke wrote:
Mon Mar 23, 2020 12:03 pm
am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
what is your other choice?
A country that isn’t printing trillions and has top credit rating.

I don’t see how printing trillions without bounds can have no consequences?
so which currency do you plan to move into? EU, CH ... Yen?
Gold.

Gold is up against dollar index 1,3,5,10 years since QE. This excludes today morning monster move. Gold up 7%
Image
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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welderwannabe
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Re: Treasury Market locked up

Post by welderwannabe » Tue Mar 24, 2020 1:13 pm

All,

Bill sold. Took being on hold for 74 minutes before someone at the fixed income desk answered. They said the market is very volatile right now. No automated market makers like usually happens as there is concern, with the volatility, that they could take a hair cut on the deal. Therefore they are only doing orders where they can match a seller directly to a buyer. Took about 5 minutes for them to find a match, they gave me the quote, and they executed it on the spot. Still a very liquid market, just more hoops to jump through.

There is normally a $19.95 commission for phone assisted treasury sales, but they are crediting that due to the issues with the market right now.

Sold my $25,000 bill for $24,991.75.

I called them multiple times and had to hang-up to pay attention to my day job. Since friday I spent a good 3 hours on this.
Last edited by welderwannabe on Tue Mar 24, 2020 1:49 pm, edited 1 time in total.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

Angst
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Re: Treasury Market locked up

Post by Angst » Tue Mar 24, 2020 1:26 pm

I look forward to the day when the bond markets operate more like the equity markets, at least to the extent of having limit up and down pricing. Perhaps there's reason to hope, but I don't really know. Here's a post from another thread that I think is relevant:
Angst wrote:
Sun Mar 22, 2020 1:41 pm
Thanks Rick for posting the link. I was pleased with how much of the interview was devoted to a discussion of specific shortcomings in the mechanics of the "bond market" as well as the potential for making improvements. Here are a couple paragraphs of dialog with Reggie Browne that I found encouraging - my underlining added:
ETF.com 'Bond ETF Discounts' article wrote:
ETF.com: How would we go about doing this?
What would the next steps look like?


Browne: There has to be an analysis done to see what's working well and what's not working well, and to root out which entrepreneurial themes people are trying to protect. Then I think they'll come to the conclusion that what the marketplace needs is more reliable, confident information in real time. It all comes down to raising confidence in the ability to transact.

There's already an SEC committee formed, FIMSAC [Fixed Income Market Structure Advisory Committee], that's looking into an analysis on market structure for fixed income. And there are some entrepreneurial enterprises, like MarketAxess and BondCliq that are trying to solve this problem, too. It's a problem that needs to be solved.

There's a lot of complexity to this. But the equity markets implemented positive changes successfully, through limit up-limit down. The next challenge is in terms of fixed income.
Godspeed to that.

palanzo
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Re: Treasury Market locked up

Post by palanzo » Wed Mar 25, 2020 6:09 pm

welderwannabe wrote:
Tue Mar 24, 2020 1:13 pm
All,

Bill sold. Took being on hold for 74 minutes before someone at the fixed income desk answered. They said the market is very volatile right now. No automated market makers like usually happens as there is concern, with the volatility, that they could take a hair cut on the deal. Therefore they are only doing orders where they can match a seller directly to a buyer. Took about 5 minutes for them to find a match, they gave me the quote, and they executed it on the spot. Still a very liquid market, just more hoops to jump through.

There is normally a $19.95 commission for phone assisted treasury sales, but they are crediting that due to the issues with the market right now.

Sold my $25,000 bill for $24,991.75.

I called them multiple times and had to hang-up to pay attention to my day job. Since friday I spent a good 3 hours on this.
Thank you for the update. It makes me glad that I don't hold bills or other instruments and that I only hold Vanguard funds.

Call_Me_Op
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Re: Treasury Market locked up

Post by Call_Me_Op » Wed Mar 25, 2020 6:16 pm

am wrote:
Mon Mar 23, 2020 12:02 pm
I’m not sure I’d want the debt of a country printing trillions of dollars either. Maybe market is reflecting this?
Why not? It is still the safest debt out there.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Call_Me_Op
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Re: Treasury Market locked up

Post by Call_Me_Op » Wed Mar 25, 2020 6:18 pm

palanzo wrote:
Wed Mar 25, 2020 6:09 pm
Thank you for the update. It makes me glad that I don't hold bills or other instruments and that I only hold Vanguard funds.
What do you think is in those funds?
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

palanzo
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Re: Treasury Market locked up

Post by palanzo » Wed Mar 25, 2020 6:33 pm

Call_Me_Op wrote:
Wed Mar 25, 2020 6:18 pm
palanzo wrote:
Wed Mar 25, 2020 6:09 pm
Thank you for the update. It makes me glad that I don't hold bills or other instruments and that I only hold Vanguard funds.
What do you think is in those funds?
I am very aware of what is in those funds but I don't have to spend hours on the phone trying to sell a bill. I think Vanguard knows how to do this and has the volume to work with the market makers.

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welderwannabe
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Re: Treasury Market locked up

Post by welderwannabe » Wed Mar 25, 2020 7:07 pm

palanzo wrote:
Wed Mar 25, 2020 6:33 pm
I am very aware of what is in those funds but I don't have to spend hours on the phone trying to sell a bill. I think Vanguard knows how to do this and has the volume to work with the market makers.
Very true, and I agree with you here. The issue I experienced was not there for institutional buyers/sellers. So while I experienced less liquidity for these instruments, I dont think the larger market did.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

bberris
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Re: Treasury Market locked up

Post by bberris » Thu Mar 26, 2020 8:16 am

Bonds at brokerage houses are usually sold back to the house acting as principal. As noted above, in times like these, the house is worried about losses on what should be a sure spread profit. When US bills and bonds are called "liquid", they are referring to multimillion dollar trades run by the big bond houses. They don't go through Schwab.

So if you are a bond dealer, the treasury market is as liquid as ever.

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Re: Treasury Market locked up

Post by Call_Me_Op » Fri Mar 27, 2020 3:45 pm

skepticalobserver wrote:
Mon Mar 23, 2020 9:33 am
That's alarming, since the value in bills was liquidity.
Indeed.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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