Talk:Treasury security

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Contents 1 Total Debt 2 Treasury bill 3 Questions 3.1 Maturity 3.2 Spelling 3.3 Historical Treasury Bonds 3.4 Calculation of Yield 3.5 30-year Bond 4 Update on HH bonds 5 explain for non-technical readers? 6 TBill - Bond 7 People pictured on the bonds 8 Pricing 9 Interest rate on T Bonds 10 why are credit rating agency been made? 11 United States of Where? 12 Regarding replacement of lost savings bonds 13 T-Bills and Medicare 14 Basic questions not addressed 15 Why was all the specific information deleted from the article?

[edit] Total Debt

So what is the total debt held in treasury bonds, and by foreigners? Some number here would be nice. The external chart listing foreign holders lists all these different maturity dates- only last one is effective?, but total debt seems way too low (2.4 trillion) —Preceding unsigned comment added by 41.251.11.1 (talk) 23:37, 26 March 2008 (UTC)

[edit] Treasury bill

The way treasury direct is mentioned in this section is too like an advertisment for comfort. Howdoesthiswo 21:01, 17 September 2006 (UTC)

"Very liquid"... numbers please.

[edit] Questions

[edit] Maturity

On newspaper, for example, a treasury note will mature on Nov 08. What does this mean? It will mature on November 1st, 2008 or on November 30th, 2008? Thanks. Jackzhp 19:21, 15 November 2006 (UTC)

Every issue has a specific day that it matures and that is cited when the bond or note is announced. It so happens that the most recent 3, 10, and 30 year bonds (notes) are issued and mature on the 15th of February, May, August, and November. The schedule is changed as the needs of debt management change. For example, 5-year notes used to mature on the 15th of the month. Those issued in the past two years or so, will mature at the end of the month. 18:55, 14 December 2007 (UTC) —Preceding unsigned comment added by Vajs (talk • contribs)

[edit] Spelling

The New York Times (and some of my friends who work in the finance industry) use the spelling "Treasurys" instead of "Treasuries". Can anyone give a reason for the preferred spelling?

Thanks, dyker_2000@yahoo.com

In the eyes of the NY Times, "Treasury" is an abbreviation for "Treasury Bond" with the word "Bond" removed. "Treasuries" means "more than one department responsible for money", e.g. "The U.S. and Japanese Treasuries today issued a joint press release that they would defend the U.S. dollar against currency manipulation". "Treasurys" is supposed to remind you that the word "Bond" is supposed to be in there.

This should be noted in the article, which incorrectly says "Treasuries."

[edit] Historical Treasury Bonds

This is a question requesting an answer, please.

I need to know if Treasury bonds purchased in 1880 would still be negotiable today. If so, when did they stop interst bearing. For instance a $1,000. treasury bond purchased in 1880. What would it be worth if presented for payment today? And is that possible? I have none. This information is for a book of fiction I am working writing.

Thank you. kelkraf@earthlink.net

I think you need to find a good history or reference work that covers this topic. I note however, that the Fed was only just coming together in the early 1900s. It sounds unlikely that you would have anything resembling a normal T-Bond from 1880, although I think it very likely that the government issued a variety of debt instruments prior to 1900. Beyond that, T-Bonds stop paying interest when they reach maturity. The bond would have had physical coupons attached to it, which would have normally been redeemed to collect the interest payments. The bond itself should still be worth the original principal or par value, (say $10,000), and the coupons would be worth the semi-annual interest payments, if they were present. So the ancient bond would not have appreciated to some astronomical value. Its value would have maxed out at maturity, and has remained the same since, except, perhaps, for it's value to collectors.--Fish-man 14:31, 8 August 2005 (UTC)

[edit] Calculation of Yield

CAn anyone tell me the way to calculate yields of these t notes i.e. yield to maturity. abhishek65@hotmail.com

Hi, I have a sheet which explains the calculation, pls mail me on vrajesh.poonawala@citigroup.com

[edit] 30-year Bond

What does it mean that, when the Fed re-introduced the 30-year bond, there was a higher-than-expected demand from foreign investors? Does it mean that foreign investors have more confidence in national security here--i.e. they have no doubts that the US will still be around in 30 years? Or do investors assume that all governments will continue to exist in some form, in which case this high demand reflects simply the expectation of a higher interest rate than EU or ASEAN countries offer? --I.B. iybet@hotmail.com

The all basis of bond trading is that US will never default.There may be higher rates of return elsewhere but the surity that the US will not default takes all investors to the US

[edit] Update on HH bonds

The HH bonds are no longer available per the trasury's website.

Yes, breaking news in govies! Who would have thought. I have poked in a change for this. --Fish-man 16:20, 12 September 2005 (UTC)

[edit] explain for non-technical readers?

I hope this isn't too pedantic, but I added a cleanup tag to the Treasury note section because I, as a non-expert in Treasury matters, could not understand it at first. I added my concerns in these html comments:

explain the calculation here to a non-technical reader; a par value price of 95:7 is 10 times (95 plus 7/32) which is 10 * 95.21875 which is 952.1875; are prices rounded? is : needed to distinguish from decimal point?

Also, Bloomberg and Marketwatch gives T-note prices in number-fraction format, eg. 99 5/8 and 99-25/32 - I could not find any quotes using decimal points. -213.219.161.27 14:50, 15 May 2006 (UTC)

I cleaned this up and removed the tag. I've seen a lot a different notations for quoting bond prices, but never have I seen 95.7 as shorthand for 95 7/32. I believe that was an error. I added the four notations that I'm familiar with to the article. As for the question about rounding $952.1875 to $952.19, I feel that rounding to the nearest penny is such a common practice that it can be left unmentioned. However, I do not know for certain if the actual prices paid in the bond market do this, although I'd be very surprised if it were otherwise.

I added some more documentation with addition so that people can calculate the decimal price in the cases where + and the third digit is used. Riskglossary.com is a great resource for this kind of stuff, and they actually state the the decimal is sometimes substituted for the - or : (I've personally never seen the : myself). --Thesilence 18:02, 9 August 2007 (UTC)

[edit] TBill - Bond

My Question is, how do we identify whether the security is T-Bill or a normal Bond by looking into Security Description?

Is it like, if security is having zero copoun, it means its T-Bill?

If any one has answer to this, pls mail me on [e-mail address removed to divert spam]

—The preceding unsigned comment was added by 192.193.160.8 (talk) 05:18, 14 December 2006 (UTC).

[edit] People pictured on the bonds

Would it be relevant to include who is depicted on the different denominations of bonds here? This page has the information for I Bonds but there's no similar page for EE bonds. —Scott5114↗ 21:38, 18 January 2007 (UTC)

[edit] Pricing

Does anyone know why Treasurys are priced in 32nds and the history behind using 32nds?

Thank you, —The preceding unsigned comment was added by 208.27.111.132 (talk) 16:08, 29 January 2007 (UTC).

[edit] Interest rate on T Bonds

The description of why 30 Year bonds were dropped in the 90's (used surplus), makes a lot of sense. However, with significant increases in the U.S. debit, I don't see why T-Bond (30 year) rates have not gone higher. The 90's rates were 8+%, and the 2006+ rates are under 5%. The discussion indicates "opportunity cost" ... but I'm not sure why this applies. I can understand it if foreign interests are bidding on these and keeping the interest down as a result of high demand (or more deliberate intention; one can envision a country with a massive trade surplus investing much of that in long term notes of the country with the deficit as a matter of agreement or appeasment.) 69.21.251.165 15:20, 31 January 2007 (UTC)Jim

[edit] why are credit rating agency been made?

My name is Parag Ahir and im a Mngt student. —The preceding unsigned comment was added by 59.182.55.191 (talk) 05:51, 28 February 2007 (UTC).

[edit] United States of Where?

Errr, am I to assume the author thinks that there is only one country that issues Treasury Securities? (unsigned)

Agree with complaint about US-centred article. Canada also issues at least one of these types of securities. Since the article isn't "Treasury Securities of the United States", it should be expanded to reflect a world-view. --RealGrouchy 21:54, 27 September 2007 (UTC)

[edit] Regarding replacement of lost savings bonds

It's mentioned that "savings bonds can be replaced if lost or destroyed". Can this process be explained? Thanks. Pzxkys 10:44, 24 September 2007 (UTC)

[edit] T-Bills and Medicare

Are T-Bills protected from Medicare calculations ?15.251.201.70 16:28, 18 October 2007 (UTC)

[edit] Basic questions not addressed

I was trying to learn about the federal bonds and the money system, but found it very difficult to read these artciles, as they ponder some insignificant details without adressing some very simple and natural questions:

• How is the bond interest determined? Is the interest guaranteed at maturity in advance? What are the typical interest rates and who determines them (on basic level, i.e. on the level of basic bonds)?

As mentioned in the article, the interest rate on marketable debt is established by auction. The basic method is as follows. The sale of a particular security is announced to the public - usually market news services report these. The sale will detail the total amount to be sold, the maturity of the security, the time of the auction, and the CUSIP identifying number of the security. You will see, for example, a tiny paragraph in The Wall Street Journal in section C on Fridays and Tuesdays detailing the sale. By the scheduled time (e.g., 1:00 est on Monday) bidders and their dealer representatives will submit bids through a system managed by the Bureau of Public Debt and the Federal Reserve. Each bid will specify how much money and at what interest rate the bidder would be willing to accept. The Treasury starts with the lowest bid (based on lowest interest rate bid, which is also the highest price for the debt bid) and cumulates the total amount of money bid. It continues until the accumulation equals the amount of debt to be sold. The interest rate bid at that point (called the stopout rate) becomes the interest rate for the issue. All bidders who were willing to accept a lower interest rate get their bid at the stopout rate. All other bidders get nothing. I believe one of my earlier versions of this article described that system as a Dutch, or single-price, auction.Vajs (talk) 18:48, 14 December 2007 (UTC)

• From what I have read here, it appears that bonds are sold on discount rates - say, 95 dollars for 100 bond. Does that mean that at maturity I will get 100 dollars for the bond, and that this is the way interest is handled?

That is exactly how discount is done.Vajs (talk) 18:48, 14 December 2007 (UTC)

I really think this basic question - WHAT is the bond, i.e. what do I get if I buy the bond - without resorting to trade, what does the state, issuing the bond, promissing. This is central question, and it should be answered in straightforward way, so that a person not familiar with economic terms can instantly get the answer.

Lolpo —Preceding comment was added at 08:30, 8 November 2007 (UTC)

[edit] Why was all the specific information deleted from the article?

I have undone the edit that removed discussion of other marketable debt beyond Treasury bills. I have done so because the picture of US Treasury securities would be unbalanced otherwise. T-bills make up 21-24% (depending on time of year) of all outstanding marketable US Treasury debt. TIPS currently make up about 10% and notes and bonds make up the remaining 65% of the debt. To eliminate 75% of the topic seemed to create an inaccurate picture. Vajs (talk) 18:48, 14 December 2007 (UTC) —Preceding unsigned comment added by Vajs (talk • contribs) 14:09, 14 December 2007 (UTC)

I will concede that there was a lot of technical information about cash management bills, TIPS, and other questions that could seem fairly specific. The current article, however, is a serious distortion of the financing of the US Treasury.

Here is the breakdown: marketable securities account for about half the outstanding debt (currently at $9 trillion) of the US. The other half - nonmarketable securities - is mostly the holdings of trust funds such as Social Security. To be honest, savings bonds (which are in the class of nonmarketable debt) make up such a miniscule part of the outstanding portfolio that the heavy focus on them in this article would lead to a complete misunderstanding of how the government is financed.

Look at it this way - every week, the Treasury sells between $40 and $75 billion in T-bills alone. The amount of outstanding debt grows on net monthly by an average of $40 billion: $25 B in nonmarketable and $15 billion in marketable. Savings bonds make up no more than 2% of the total current debt and the number is shrinking.

I will concede that it is not easy to read the article and know what a bond is. I would suggest that the entire topic of fixed income securities could stand a review and a fresh outline. Certainly the recent events in the financial markets highlight the impact of fixed income securities. I do not believe that simply cuttting out entire sections is advancing this project. 18:48, 14 December 2007 (UTC) —Preceding unsigned comment added by Vajs (talk • contribs) 13:40, 14 December 2007 (UTC)