Tuesday, March 23, 2010
The image is the yield curve as posted on the Schwab Institutional web site from a few minutes ago. Last night there was something of a debate about this in the comments of yesterday's post. There were a few mentions of this around the web.
If you click on the image you will see that nine months out is the only point where AAA corporates yield less than treasuries based on Schwab's inventory. Well actually I found a two year corporate rated AAA yielding 1.135% versus the 1.183% on the matrix pictured above. The yields on the matrix are the highest available.
The inventory of three year AAA corporates are multiple offerings of the same issue with yields ranging from 1.564% you see on the matrix down to 1.275% versus 1.530% for treasuries. I should note that the 3 year corporate in question doesn't actually mature until May 15, 2013.
For what it is worth there are several Berkshire Hathaway five years, AA rated, with yields right around 2.7% versus the 2.405 for five year treasuries.
For now this is merely interesting and worth paying attention to. It is either an anomaly that will be explained after the fact or it is significant. I'm not sure and of course paper offered is not paper traded. I have no conclusion yet but it is interesting.