The enormity of the Trump administration's assault on reasonable governance and the public welfare has been intellectually and emotionally overwhelming.
As someone who invests in corporate debt securities for a living, it’s hard to even begin to explain how incredibly different US Treasuries are from other forms of “debt.” Every bond I analyze is governed by a bespoke contract (called an Indenture) that was negotiated between the issuer and the lenders and outlines the bond holders’ rights and claims. Liens, collateral, security, ranking, guarantees, restrictive covenants, etc. are all established in the Indenture.
Treasuries have none of these. There’s no indenture/contract. No negotiations over collateral and liens. It’s a completely different animal. It truly is like a savings account, except it’s a marketable security that you can trade. The marketability I think is what throws people off: treasuries can be bought and sold in a brokerage account, like a stock or a bond, so they must be similar. But form-wise, they are completely different.
As someone who invests in corporate debt securities for a living, it’s hard to even begin to explain how incredibly different US Treasuries are from other forms of “debt.” Every bond I analyze is governed by a bespoke contract (called an Indenture) that was negotiated between the issuer and the lenders and outlines the bond holders’ rights and claims. Liens, collateral, security, ranking, guarantees, restrictive covenants, etc. are all established in the Indenture.
Treasuries have none of these. There’s no indenture/contract. No negotiations over collateral and liens. It’s a completely different animal. It truly is like a savings account, except it’s a marketable security that you can trade. The marketability I think is what throws people off: treasuries can be bought and sold in a brokerage account, like a stock or a bond, so they must be similar. But form-wise, they are completely different.