Fitch has since received statements from the Trustee that indicate the indenture reserves are now invested in U.S. Treasury Bills
, an investment consistent with the terms of the indenture and with the current 'AAA' rating.
Specifically, we take annual return data from Ibbotson Associates U.S. Treasury Bills
, Long-Term Corporate Bonds, and Large Company Stocks portfolios from 1926 through 2008.
Using observations of the three-month U.S. Treasury bill
yield and the federal funds rate from January 4, 1954 through March 2, 2006, we demonstrate that the estimation results can depend on both the sampling frequency and the proxy that is used for the short-term interest rate.
These profitability rates can be compared with an estimated rate of about 4 basis points estimated by Cammack (1979) in auctions for three-month U.S. treasury bills
during the 1970s, and of about 1.5 basis points estimated by Spindt and Stolz (1993) for auctions during the 1980s.
Currently, the U.S. treasury bill
market serves this purpose admirably.
The federal interest rate is tied to U.S. Treasury bills
but can be safely estimated at 2 percent or less, or $30,000.
The people who bid up the prices of long-term U.S. Treasury bills
in anticipation of interest rate cuts when the Fed overshoots and triggers a recession are the same people who are now on tenterhooks wondering when to start cutting back on investment plans because a recession will soon produce overcapacity.
Republican Abbott, meanwhile, is doing his part to nourish the federal government's appetite for debt-financed budgets by buying more than $8 million in U.S. Treasury bills
; Abbott had over $6 million stashed in safe certificates of deposit, which were also the preferred investment vehicle for Hegar, who bought $2.4 million worth of CDs; Patrick reported $1.8 million in CDs and a savings account.
If China threatens to sell its holdings of U.S. Treasury bills
, which are estimated at $1.17 trillion, it could collapse global financial markets and cause an unprecedented depression.
dollars, and to invest their surplus oil profits in U.S. Treasury bills
"In contrast, short-term U.S. Treasury bills
have retained their specialness after the Great Financial Crisis." During 2007-09, the premium for three-month Treasuries shot up to 280 basis points while the average five-year premium increased 90 basis points.
Treasury notes) and cash (three-month U.S. Treasury bills
) and held on through the end of 2016.
If you must work together, choose investments with few moving parts like U.S. Treasury Bills
or Certificates of Deposit.
2 U.S. Treasury bills
and certificates (table 1, part