Article by Joel Olave

With all the hoopla about the European debt crisis, a few of the governments in the Euro area are finding it hard to keep their finances in order. If you live in these countries, it would be risky to lend your money to the government because default is always a possibility. But for us Filipinos, lending money to the government is a good opportunity to earn some interest income.

One way to lend money to the government is through buying Retail Treasury Bonds (RTB) issued by the Bureau of the Treasury. RTB’s are government securities which are considered unconditional obligations of the sovereign state. It is backed by the full taxing power of the government. Therefore, government securities are practically free from default. In other words, there is very little risk in investing in these securities.

Retail Treasury Bonds can be bought from banks such as the Development Bank of the Philippines (DBP). The minimum investment is usually 5000 pesos or higher. Interest rates for these bonds vary depending on the term. For example, the coupon interest on the 3-year bond is 8.50% per annum and for the 5-year bond, 9.0%. Interests are usually paid on a quarterly basis subject to a withholding tax of 20%.

Because of the 20% withholding tax, the 8.5% interest would give a net return of 6.8% while a 9% interest will yield a 7.2% return. These interest earnings, however, are paid immediately to the coupon holder. Therefore they do not become part of the investment principal and would not have a compounding effect. Still these are good returns considering how almost risk-free the securities are.

There are several comparative advantages on Retail Treasury Bonds as an investment instrument.
1. Low Risk – Unless the government defaults on its debt, which very rarely happens, the investor will not lose his money. The interest rate will not change even if the market collapses.
2. Liquidity – If you need the money invested, there is a secondary market where you can sell your RTB’s before maturity.
3. Investment Amount – the minimum amount of investment can go as low as 5000 pesos. This makes the securities within the reach of most middle class Filipinos.
4. Quarterly income – the fixed income payments are made on a quarterly basis instead of 1 year which makes the first 3 payments worth much more than the stated interest rate given the added opportunity to invest the earnings.

Government borrowings is an indication that projects will be underway that needs financing. Hopefully, the money will go to projects that make people’s lives better.

“Unfair Advantage” Robert Kiyosaki’s latest book Treasury bills (or T-Bills) mature in one year or less Treasury notes (or T-Notes) mature in one to ten years Treasury bonds (T-Bonds, or the long bond) 20-30 years Treasury Inflation-Protected Securities (or TIPS) The principal is adjusted to the Consumer Price Index en.wikipedia.org

Incoming search terms for the article:

• rtb philippines 2012

Article by Allaric Saltzman

In the financial world, a trading system is the way by which people buy or sell money instruments such as bonds, stocks or commodities for profit. The instructions that allow these transactions to take place are called orders and placing of these orders are governed by a set of rules that go to form the Trading System.

In the trading system, there are various ways in which an order to sell or buy at any pre-determined price is executed such as a market order or a limit order. There is also the stop order that is a useful tool to minimize a loss by fixing a price of a stock at which to stop or end the trade and thereby take in a profit or atleast minimize the loss if any.

Most people have little or no knowledge of the fluctuations of a stock market and yet will risk their life s savings in the hope of making some quick money on the trade markets but one must have a good knowledge and awareness of the events taking place in the markets and the chances you can take by testing the laws of probability.

Futures Trading is the buying or selling of assets like an actual physical commodity or any financial instrument that may have its price set for a future date. The contract obliges the seller or the buyer to transact in that asset at the price which has been determined well before the actual date of the trade. These contracts may require the actual delivery of the assets in physical form or their settlement in cash payments.

The Treasury is the name given usually to the country s Government money house and therefore the treasury bonds are those investments where the investor loans an amount of money to the country s government for a fixed period of time at a fixed rate of interest. These treasury bonds are known to be safe investments as they are risk-free being loaned out to the government who can redeem these bonds by raising special taxes or even creating additional currency to offset any shortfall in cash at the time of maturity of these bonds.

In order for an investor to trade successfully and make a profit in the financial markets, it is imperative that he or she has sufficient and professional knowledge of the trading system, how to trade in futures and also know how and in which treasury bonds to place their trust.

Article by Larry Lane

Seeking Higher Yields? Try These Alternatives to US Treasury Bonds

By Larry Lane for http://www.Investorzoo.com

Let’s face it; it’s tough to get high yields in bonds in our current economic environment. The 10 year bond is currently trade at 3.66%. This means you’re willing to tie up 10 years of possible growth for a return of 3.66%. While there is virtually no risk of default if you hold until maturity, your reward is barely outpacing inflation after you pay your taxes. If you are looking for slightly better returns, consider an alternative to US Treasury bonds.

Federal Agency bonds
Federal agency bonds offer an opportunity to increase yields without increasing risk too much over US Treasury bonds. While agency bonds aren’t backed by the US Government,it would be hard to imagine the federal government letting an agency default. That being said, one doesn’t need to go far to remember the debacle of Freddie Mac and Fannie Mae to recognize that no security is 100% safe.

Maturity of these bonds ranges from one to thirty years and can be purchased in increments of $ 1,000. Interest from most of these agencies is tax exempt from federal and state income taxes. It is for these reasons high net worth investors and those with high incomes benefit the most from these types of investments.

Municipal bonds
Municipal bonds or “muni bonds” are issued from states, cities or local municipalities. Like federal agency bonds, municipal bonds are federal and state tax free. Those individuals in a high income tax states and high income earners may find municipal bonds a good investment due to their tax free nature. These bonds are rated by Standard and Poor’s and Moody’s.

Municipal bonds come into two categories:
1)General obligation bond: These bonds are based upon the municipalities’ ability to collect taxes

2)Revenue Bond: Bondholders of this type of investment will only be paid based upon the revenue the project generates. Examples of a revenue bond would include a bond offering on a bridge project or electrical plants.

The interest rate a bond pays will depend on the credit worthiness that the rating companies assign. As with all investments, the higher the risk the higher the interest rate you can expect to receive.
You can purchase these bonds through a broker, much like you would a stock. You will not receive the actual bond, but a book entry; marking you as the owner of record of the bond. Before purchasing any bond, you should ask for an official offering report. This report will give you financial details of the municipality or bond project you’re financing. In effect, you are lending a municipality or agency money. Unfortunately there are no standard reports for bond issuers to follow unlike a public corporation.

If you’d like to spread your investment risk, you can purchase municipal and federal agency bonds through an ETF or mutual fund for additional portfolio protection.

Since interest rates fluctuate, the value of your bonds will as well. If you are forced to sell before maturity, you may see a net loss or gain on your investment.

As always, please consult your financial advisor to see if bonds fit in your portfolio and investment strategy.

Larry Lane is the editor for InvestorZoo.com, a social networking site dedicated to personal finance. Email questions and comments to Larry.Lane@InvestorZoo.com

The article above is information of a general nature and the information provided may not apply to your personal situation. Please consult your financial planner or licensed professional for investment advice.

Article by Queena

The financial times reported since, according to the Treasury of the monthly data released Tuesday, China in August to sell $ 36.5 billion in U.S. Treasury bonds, China’s total amount which hold down to $ 1.137 trillion m, is the lowest for a year.

Reports say, the month sold $ 36.5 billion in China of American Treasury bonds, among them a long-term national debt sale of up to us $ 40 billion, and the total amount of China held this fall to $ 1.137 trillion, a years the lowest. China is still the largest U.S. debt holders overseas, the second is Japan, its held August totaled $ 936.6 billion, higher than the $ 914.8 billion in July.

However, the foreign investors in the U.S. stocks, bonds and other financial assets of soaring demand in August, investors buy bonds especially fond of the United States, see it as a hedge investment. In early August, the s& will America’s credit rating cut one level to AA +. But the needs of the national debt faces the United States is concerned, the eurozone debt crisis and a sharp slowdown in global stock markets, the effects of the rating was beyond us the influence of reduction. From Britain, Switzerland, Japanese investors, and hedge funds in the Caribbean region of love banking, a lot to buy us treasuries.

Britain and the United States Treasury holdings in August increase total $ 42.5 billion to $ 397.2 billion, and a year ago for $ 181 billion. But with the London as a financial center position, such flow may reflect the purchase of the other countries. In the past, when the United States Treasury once a year fixed international capital flows (Tic) data, have fall sharply British holdings, and at the same time greatly increase China’s holdings.

Switzerland’s us Treasury holdings in August increase total $ 39.1 billion to $ 147.5 billion, but this is regarded as the Swiss central bank reflects the local currency exchange rate down the effort.

August data may Tic, marked the Treasury buying a peak. In September, in the 10-year us Treasury yields fell to 1.72% this year after 1945 since the nineteen seventies, foreign official entity and Japanese private investors sold significant quantities of U.S. Treasury bonds.

The benchmark rate of return has set up a file in the October back up to 2.25%, at the same time the Fed (Fed) data shows, since early September foreign central Banks since sold $ 73.5 billion in U.S. Treasury bonds. Japan’s private investors in the last week of September sold a record $ 29 billion foreign bonds, mostly of American Treasury bonds.

Why yields go down when prices go up
Video Rating: 4 / 5

Article by jekky

Officially released. The day before, the amount of 225 million book-entry in 2008 (22) also started to issue bonds. Treasury rare “get together” behind the issue of national policy to stimulate domestic demand to raise the necessary funds required enormous. So, bonds to raise funds to expand domestic demand in Jiangsu project to the number of drive? Jiangsu enterprises through financial support policies which winter there? Reporter visited yesterday depth. These days, for investors prefer government bonds, is hard times. Ministry of Finance has issued a third of electronic savings bonds will be officially released on November 25, while the 15-year book-entry treasury bonds on Nov. 24 also passed the national interbank bond market, stock market cross-market distribution. Reporters pay, ICBC, China Construction Bank and a number of banks noted that the 2nd firing of the national debt is “in demand”, has not yet started selling a lot of people have been consulting your purchase, and go through the early application process. Reporter on the scene saw at yesterday’s sale, many people long lines to buy government bonds, many banks sold out in a morning network share sale. Bank pointed out that, with the rate cut is expected to become increasingly strong, investment in bonds heat up significantly, so favored by many citizens of Nanjing. In fact, the national debt “get together” behind the issue of expanding domestic demand is driving the huge macroeconomic “Pushing Hands.” Mu Hong, vice director of Development and Reform Commission, said recently that 4 trillion program to stimulate the economy, the central investment will arrange for 1.18 trillion yuan. Expert conclusion that the new central government investment will be financed by issuing bonds, a net increase next year China will send 400 billion to 600 billion yuan treasury bonds. Wang Qing, chief economist for Greater China of Morgan Stanley believes that next year the Chinese government is able to issue 400 billion to 600 billion yuan of treasury bonds. CICC recently released a research report is expected next year, the expansion of government investment to GDP, the proportion of its budget deficit this year of 0.6% to 2.3% next year, while the deficit in order to achieve this, Governments need to send next year’s net increase of 500 billion to 600 billion national debt. It is understood that China’s proactive fiscal policy the last 10 years in the Asian financial crisis, this policy has been extended to 2002. The Asian financial crisis, from 1998 to 2000, China issued about 105 billion yuan every year special treasury bonds, equivalent to 10% of revenue and 1.3% of GDP; in 2001 to 2002 global economic downturn, China issued 150 billion per year special treasury bonds, equivalent to 8.5% of revenue and 1.3% of GDP, to stimulate economic growth. Bond sales and trading department of CITIC Securities research report released Hu Hangyu that, taking into account the scale of government bonds due in 2009 reached 790 billion, can determine the scale of 2009, bonds issued at least 1.3 trillion or more. The report said the issuance of treasury bonds in the past few years, run, do not consider the impact of special treasury bonds in 2007, since 2004 an annual increase of state treasury bonds were at 200 billion to 300 billion, from the absolute point of view, the scale of additional treasury bonds in 2009

The U.S. Treasury bond market has come to receive serious attention in recent trading. When Treasury bonds show action, so does the dollar. If we see a decline in prices for long-term Treasury bonds, the dollar sinks. According to a March 2009 Fed’s Flow of Funds Report, there are $ 14.5 trillion in Treasury securities, agency securities and mortgage-backed securities outstanding.

Foreign countries are heavily invested in U.S. debt as an investment with China being the first holder of U.S. bonds. More than a few economists believe that if China stops buying them, the U.S. economy would face ever increasing interest rates to make U.S. debt more attractive.

With the consequence of huge deficits and out of control government spending, the real value of U.S. Treasury securities are the focus of increased attention. China wants their assets safe and if any question of U.S.

credibility would ensue, the pressure to liquidate a portion of their U.S. assets in self-survival mode may seem a likely option.

If China and other nations refuse to buy U.S. debt, the only alternative is for the U.S. Treasury to purchase Treasury securities which would dramatically increase the money supply. To attract investors, interest rates would need to rise. As is the case, when the Fed starts buying Treasury bills habitually, inflation ensues. The Fed in the mid-2009 scenario has used much of the money to buy over $ 500 billion in mortgage backed securities.

In a normal economic environment, higher interest rates would be associated with the central bank as they try to cool off inflationary pressures associated with an expanding money supply. However, with less demand for Treasuries, higher interest rates to attract buyer demand is the only viable recourse.

Yet higher interest would only push an already declining economy, deeper in the hole. Higher interest rates mean a greater burden on the populace resulting in more mortgage defaults and negative pressure on consumer debt.

Washington’s record breaking Treasury offerings to fund the deficit and the Fed buying the debt through its spinning out of dollar bills is staggering. The floodgate opened by the U.S. Treasury is pushing bond yields higher. Bill Gross, of PIMCO told Bloomberg, “The market is beginning to wonder who is going to be buying these bonds.”

Inflationary deficit spending can destroy a nation. The renowned late economist, Milton Friedman warned that “Inflation is a disease, a dangerous and sometimes fatal disease that, if not checked in time, can destroy a society.”

China remains the number one holder of U.S. debt. Milton Friedman warned, “The Fate of a Country Is Inseparable From the Fate of Its Currency.” Climbing interest rates and inflation scare an already fragile domestic and global economy. As such, the debt onslaught is boosting bond yields as the appetite for money to finance the government’s budget deficit shows no sign of dieting.

Question by Matthew D: If the government is spending money it doesn’t have, why are people buying Treasury Bonds?
People buy Treasury Bonds with money. What happens when the bonds are sold? Does the government then have the money?

Best answer:

Answer by J (Suns fan and Cardinals fan)
no they charge you tax

Know better? Leave your own answer in the comments!

www.eminisource.comPatrick Ceresna DMS, CIM Chief Derivatives Market Strategist at Eminisource.net reviews the previous weeks moves in equities, S&P500, Nasdaq, US Dollar, Gold, Oil, the Treasury bonds and the major currencies and provides an informative outlook for the week to come.
Video Rating: 0 / 5

www.presstv.com Standard & Poor’s (S&P) is a United States-based financial services company that publishes financial research and analysis on stocks and bonds. In its latest rating, the Agency looked at the US Government Treasury bond and said that there is a1 in 3 chance that US will lose its triple A (AAA: the highest rating available) rating. Max is joined by Karl Denninger of market-ticker.org to ask him about his thoughts about the issue.
Video Rating: 4 / 5

How much is profitable trading worth to your bottom line? Suppose you could cut years from the learning curve and start building consistent profits and cool confidence in your trading skills. Imagine… taking profits from the market with ease … knowing when NOT to trade … putting on each trade with the calmness of a real professional … and watching your net worth grow week by week.

Sounds too good to be true? Well, it isn’t if you have the right signals and personal guide. Think about it. Profitable trading is the most powerful skill you could ever learn. Once mastered, you can trade from anywhere in any market … you can make money no matter what the economy or job market looks like … and you’ll have the satisfaction of being a self-made entrepreneur when so many have failed before you. Simply put, good trading skills are the magic bullet for a better life. But acquiring that skill is the hard part…

]]>

It could take you years and can cost you a small fortune to figure out just the right combinations that make trading work for you – while others fall flat on their face. But instead of knocking yourself out trying to come up with just the right mix of trading method and system, you can now get it immediately with a new trading service called ““.

But don’t take my word for it, here’s what customers from all over the country are saying about this unique trading service:

“I may recommend your service to all my members. If so, it will be the first time I have found something worthy enough to endorse!”

~Jason H., USA

“I want to recommend your investment recommendations to a couple of people, but want to make sure you are still taking more subscribers. I have been very impressed with your recommendations.

Thank you.”

~Brad L., USA

“Brian,

You really nailed the morning day trade today….almost to the tick! Thanks for the profit. And yesterday! What a life saver as the trigger came just after the cut off within a few minutes! You have helped me more in less than 2 weeks than most gurus I’ve trusted have in 2 years! Thanks for your genuine interest in other traders!”

~Mike R., USA

I know you’re probably still skeptical and a bit on the conservative side, but think about this – if you keep doing the same things over and over again – you’ll only succeed in getting the same results. That’s why I’m so excited to be telling you about “Market Trigger Alert” — it’s exactly what you’re looking for!

Steven Crowder’s video www.youtube.com This articles comes from back when the Bush Admin tried to privatize social security and it debunks many of the lies that have been told including ones I didn’t address such as the IOU argument. Remember those IOUs are US treasury bonds which the government HAS to pay back. If it doesn’t it would be like defaulting on a loan. Currently US treasury bonds are top sells in the investment community because the US is the safest place you can put your money. When they talk about how much of our debt China holds they are talking about these T bills. You think China put all that money in some worthless IOUs? Will the government payback China and the Banksters but not the American people? Anyone who makes the IOU argument is basically saying that the US shouldn’t. money.cnn.com This is an article by Republican Corporate Hack Paul Ryan. Notice how he conflates the deficit problem with social security even though it is entirely self-funded and claims it will go bankrupt. It’s all there in the first three sentences. articles.businessinsider.com
Video Rating: 4 / 5

At the end of June, the Feds quantitative easing program, QE2, where Bernanke purchased 0 billion worth of long-term U.S. Treasury bonds, is scheduled to end. His motive in creating QE2 was to push down long-term interest rates. Understand, the 0 billion is on top of the .25 trillion the Feds bought of CDO toxic assets (mortgage-backed securities.) Right now Treasury Bonds have been rallying even though they are hitting their lowest yields. So what will happen in a couple of weeks? Let’s look at some possibilities…

First of all, what is the real definition of “quantitative easing”. In reality, it is “printing money,” creating money out of thin air. Here’s the theory behind QE (1,2, or maybe 3). The Feds buy bonds, bank toxic assets (CDO’s that, themselves, were never based on real mortgages but instead were the same mortgages sold again and again), etc. They purchase these, for lack of better word, securities, with a “check”. The banks who sold the securities to the Feds, then deposit the checks into their banks, assumingly with the understanding that they could then make loans to large and small businesses, and voila, the economy improves.

But what really happens. The money supply does not expand, the economy faces double dip recession. We have already experienced a double dip recession in housing. The unemployment number has ticked back up to 9.1%, and that is what the Government admits. Those unemployed for long duration have not found work. Companies have actually been advertising that to be hired, you must already be working. And to add injury to insult, inflation has stormed into “Main Street”, with gas prices at and a gallon, basic commodities, such as milk, bread, meat and vegetables soaring. It is so bad that markets are now decreasing package quantity to try and hide the increasing prices. According to the the SBA’s Office of Advocacy, lending to small business which has been the mainstay of any job growth for the last 2 years, fell by billion (6.2%) in the last two years.

]]>

For the last several auctions of US Treasuries, the Fed has really been buying its own bonds behind the scenes. Last couple of weeks, the Fed bought .68 billion of notes in the 5-6 year range. Why is the Fed buying the bonds and notes it is auctioning? For the last several months, the Chinese have been major sellers of US bonds, not buyers. According to the Fed’s monthly TIC report, the only buyers of bonds and notes were the Japanese and the British. But since the Tsunami, Japan is selling bonds to pay for their own recovery. Why are countries selling bonds? It’s no wonder countries. The 10 year note’s yield is now at 2.97% and the 30 year bond is at 4.18%. Compare that to the yields of other countries. Spain’s 10 year note is at 5.48%, Ireland, 11.25%, Portugal, 10.9%, not to mention Greece which is now at 25.74% (but they may default so it doesn’t matter what that rate is). There is a lot of global competition for bond purchases right now.

So what will happen at the end of June when the Fed stops underwriting its own Treasury auctions? Just how high do bond yields have to go before they become interesting again to foreign investors? And will Congress block the increase in the debt ceiling, forcing bonds even higher? Surprisingly, forecasts today are showing by December the 30year bond yield will still only be at 4.25. The question is…will there be anyone to buy the bonds?

Right now it is not a problem. Why? Because for the last 6 weeks the stock market has been sliding. The NASDAQ has lost all of its profit for the year. Without anyone really taking notice, the Market went into a bearish correction. From its high at 12,807 in May, the Market has fallen below 12,000 to 11,952 in June. That’s nearly a 7% correction. And summer doldrums have just begun. As we know, traders buy stocks and sell bonds OR they buy bonds and sell stocks. With summer just underway, bonds could remain popular until the last week in August. What happens the last week of August and the day after Labor Day…the fall cycle begins. Always remember, the Market spins on just one thing: bonuses. As of now, hedge fund, retirement fund, mutual fund managers are not looking at much of a bonus. Starting the last week of August, beginning September, the Market turns up and becomes bullish. That way the fund managers can make their bonuses and the investors can pay taxes on what they buy and sell.