Treasury Yield Turns Negative

Thanks positive. Will check out those things.

Mafia, what is the effect if the cash goes into commodities or equities?

"Many people believe commodities."

Possible, but impossible to tell. Perhaps into mortgage interest rate tax deductions. :0

dwell, if all the money goes into equities or commodities, they will rise with the same fervor that the rates in short term T-bills have dropped.

in other words, they will become bubbles.

equities? tough to accept that this will be the next bubble as fundamentals don't support it due to the severe contraction/recession we are facing.

commodities? possible- all the talk is about demand destruction. however, there is also supply destruction chasing it down, and if the USD tanks, then this is a more plausible scenario.

gold? well, you know my position on it, but no need to explain why anymore, lest we drag the class dunce back into this discussion again.

"No. Read what you wrote, do the math. Pretax income $100,000. After-tax income $75,000. Mortgage interest $10,000. New after-tax income $77,500.Tax savings $2,500 (25% of $10,000). 10% of $25,000, the former tax bill, not 25%, the marginal tax rate. Sorry."

Hmm? Where did these numbers come from? Where did I ever mention margional tax rate?

Steve, you are making no sense at all and your problem is more serous than I thought. You should post in Spanish. Really.

What I want from StreetEasy for Christmas is a spelling check function.

"What I want from StreetEasy for Christmas is a spelling check function."

It has one. That's what the red underlines mean.

Pick any numbers you want - the result is always the same. Tax benefits are tax benefits. You pay for them. But a tax-exempt bond and you get paid a lower interest rate, which means you pay more for the benefit of not paying taxes.

Your income, in the end, is approximately the same since the lower rate is offset by nonpayment of taxes.

"lest we drag the class dunce back into this discussion again."

LMAO.

Don't discount equities, MMA - they are still very much undersold, even discounting forward p/e's. Commodities seem highly unlikely though there is some pricing control in the market, and suppliers are cutting back production. But don't look for copper to come back anytime soon, until housing recovers since that's where copper is used.

And you know my opinion on gold: eat a lot of candy.

"But a tax-exempt bond" = "Buy a tax-exempt bond"

yes, steve, there could very well be a bear rally like none other than we have seen before... hhaha, eat a lot of candy. lol.

No one can tell if it's a bear rally until it's over. Which is why I'm just sticking to what I have and not investing anything else for at least a month. I've already taken a beating thanks to Lehman.

That said, there is an enormous amount of money in the economy, just no velocity (hence the treasury yield). Talking to my clients they've been taking a haircut since Lehman - again, you know my opinion on that debacle.

This too will end. I think in the stock market sooner rather than later because the worst real-estate markets (California, Las Vegas) are starting to recover. Of course due to foreclosures, but for whatever reason people are buying. Unfortunately, the pain is just starting here.

> Mafia, what is the effect if the cash goes into commodities or equities?

Tech Guy will then rent Trading Places to build up his expertise on that, too.