Wall Street Oasis - Investment Banking & Finance Community: AAA Corps and the Flow of Risk-Off Trading

Wall Street Oasis - Investment Banking & Finance Community The Wall Street Finance Community where investment bankers, consultants, traders, private equity and hedge fund professionals come to learn and play.

AAA Corps and the Flow of Risk-Off Trading Jan 31st 2013, 06:00 The other day, I had the opportunity to attend a presentation by an analyst who's focus is in Rates Trading. During the presentation, he talked about the future outlook of US Tsys and what that said about the US Government's future relating to its credit rating and debt/gdp ratio. The most disturbing and eye opining chart was an overlap with the US Tsy yields and the AVERAGE AAA Corp yields, with the X-axis extending 30 years. Naturally, the AAA yields were a little higher than the Tsys…until year 25, where they intersected. Thus, year 30 showed that the AAA yields were lower than those of US Tsys (suggesting AAA Corps carry less risk in the long run). read more Media files: preview (image/jpeg, 0 MB)

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