tag:blogger.com,1999:blog-11027528911364475.post8377483852607271406..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Who Wants to Receive 2.5% / Pay LIBOR for 30 Years?Jakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-11027528911364475.post-55560794613157022262008-12-19T07:32:00.000-08:002008-12-19T07:32:00.000-08:00Hi Michael-LIBOR is the rate at which banks lend t...Hi Michael-<BR/><BR/>LIBOR is the rate at which banks lend to one another. The swaps curve is like the Treasury yield curve, but rather than "predicting" the future short-term Treasury rate, the Swaps curve "predicts" the future LIBOR rate.<BR/><BR/>Like Treasuries, one can lock in those future swap rates (i.e. just just someone can buy a 30 Year Treasury at a specific rate now, a Swap counterparty can lock in the 30 Year Swap Rate). More specifically, in the swaps market, someone can receive a fixed payment each period (the swap rate) and pay whatever LIBOR rate is currently priced in the market at each period for the life of the swap.<BR/><BR/>Currently for 30 years, this rate is 2.5%, which is actually lower than Treasury rates (the difference between the Swap rate and Treasury rate is the spread - currently negative), implying that a bank can borrow more cheaply than the U.S. government. <BR/><BR/>My thinking it this is WAY too low.<BR/><BR/>Help?Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-83132317578252994572008-12-19T02:41:00.000-08:002008-12-19T02:41:00.000-08:00Hi,Sorry, but I don´t get what this means. Can you...Hi,<BR/>Sorry, but I don´t get what this means. Can you please try to explain it in a few simple words?<BR/><BR/>thanks MichaelAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-26567227813678034702008-12-18T18:04:00.000-08:002008-12-18T18:04:00.000-08:00I think there's probably lots of money still to be...I think there's probably lots of money still to be made in treasuries--but it's like playing russian roulette with the fed, and they get to choose when the bullet's in the chamber. I don't like this game; we shouldn't be looking for bigger fools, we should be looking for someone we can be of some service to, that's were real prosperity comes from.donnyhttps://www.blogger.com/profile/02107555662488785352noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-85831594009565820862008-12-18T10:45:00.000-08:002008-12-18T10:45:00.000-08:00Not sure which part to explain... please explain.Not sure which part to explain... please explain.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-51666938154959585242008-12-18T06:53:00.000-08:002008-12-18T06:53:00.000-08:00I THINK THIS IDEA IS SO GOOD SO FAR BECASUE FALL O...I THINK THIS IDEA IS SO GOOD SO FAR BECASUE FALL OF WALL STREET.<BR/>BUT YOU HAVE TO EXPLAIN MORE ABUT THE METHOD OF THIS.AND I AM WAITNG FOR YOUR RESPONSE. <BR/> THANKS<BR/>----------------------------------<BR/>RASHID MAHMOOD AZEEMI<BR/><A HREF="http://makemoney.bizoppjunction.com" REL="nofollow">Make Money</A>womenfitnesshttps://www.blogger.com/profile/17111258725925147391noreply@blogger.com