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A 50-Year U.S. Bond Makes More Sense Than Ever

By:  Barry Ritholtz

Let’s imagine a nation with the following characteristics:

-1x-1[1]

— large but not unmanageable amounts of long-term debt;

— a very high credit rating;

— low or even negative interest rates;

— a stable but slow-growing economy;

— deteriorating and outdated infrastructure;

— an aging population that entails rising health-care and retirement spending, and;

— a tremendous demand for fixed-income securities, the longer the maturity the better.

Don’t leap to the conclusion that the nation is the U.S.; if it were, I would have had to add a bullet point describing it as having a dysfunctional government paralyzed by partisanship.

But regardless of the nation in question, the appropriate approach to financing this debt suggests a long-term bond — whether with a 30-year or even 50-year maturity. Read More….

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IBM
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-1.09
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30.96
-1.38
-4.27%
PEP
118.79
-0.31
-0.26%
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965.385
-12.795
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ORCL
48.8
-0.45
-0.91%
V
102.68
-0.64
-0.62%
WMT
79.55
-1.43
-1.77%
AAPL
158.76
-2.19
-1.36%
XOM
76.626
-0.844
-1.0891%
MSFT
72.73
-0.92
-1.25%
JNJ
133.58
-0.59
-0.44%
WFC
52.03
-0.66
-1.25%
GE
24.866
-0.234
-0.9311%
JPM
91.1
-0.99
-1.08%
PG
92.49
+0.05
+0.05%
PFE
33.09
-0.27
-0.81%
VZ
48.2
-0.21
-0.43%
CVX
106.22
-0.62
-0.58%
T
37.896
-0.334
-0.8747%
BAC
23.81
-0.38
-1.57%
DIS
102.04
-0.16
-0.16%
FB
167.98
-2.02
-1.19%
C
66.895
-0.815
-1.204%
MRK
62.18
-0.52
-0.83%
GOOG
916.9
-10.06
-1.09%
KO
46.07
-0.13
-0.28%
CMCSA
40.51
-0.73
-1.77%
HD
150.8
-1.45
-0.95%
GILD
72.44
-0.91
-1.24%
INTC
35.351
-0.459
-1.2812%
IBM
141.41
-1.09
-0.76%
CSCO
30.96
-1.38
-4.27%
PEP
118.79
-0.31
-0.26%
AMZN
965.385
-12.795
-1.308%
ORCL
48.8
-0.45
-0.91%
V
102.68
-0.64
-0.62%
WMT
79.55
-1.43
-1.77%