the_Bird

Some Muni Bonds Appear Screaming Buys Here

There's also a HUGE premium being paid for liquidity today. People want TREASURIES, nothing else will do. I sold an eighteen month Treasury note for a client today at a yield under 1.6%; there was no way we could walk away from the premium we were being paid on that bond. Retail client, I could sell the T at a 1.6% yield, buy an 18-month CD ~3.6%, and pick up 200bp for nothing more than giving up some liquidity (ended up doing some longer-term stuff in the muni market, but the point remains).

Unless the market thinks overnight rates are going to 50bp in the next year, T-rates as low as they are is purely a panic move. Everyone wants Treasuries, nothing else, because they are scared sh*tless of holding paper that they might have trouble getting a bid on in a few months. It's ALL about liquidity today.