Its a junk bond bobby bought 20c on the dollar (face value 500m and and bought it for 100m) , if the town is able to bring in more tax revenue, it may increase the likely hood if it paying the bond back. The town is supposed to pay the bond back at maturity.
Because the town would be able to pay, the town was going into default remember(that’s why it lost so much value). If it’s able to get a casino, not only would they have a cagr of like 25% but at the end of the duration of the bond they’d get 500 million back.
I forget this episode, but it could also be a lower credit spread if the bond is less risky. Credit spread going down means yield goes down which means price goes up
Government bond only has 1 main risk - default risk. The default risk is so high that the bond is sold (or valued) for 100m with a face value of 500m. If tax revenue goes way up then the government default risk goes way down and the bond value will go up above 100m, hopefully back to 500m par value
No they just build laws to strategize the levels of who they're going to love themselves out as who they're going to cause the blame in their social beliefs
@@reezndukwe9339 why would I? Isn't my point clear enough? Do you yourself even know what usdc or usdt is and why bitcoin is so secure and unstoppable? At this point I can't really tell what you are trying to tell me with your comment.
@@sirius1ishBelive what you want, it won't change the fact that bitcoin is the best store of value. I don't have the time to explain it to you. The only thing I can recommend to you is to educate yourself and be open minded. Maybe there is something to it when even institutions are buying and recommending it. Don't get distracted by all the fake news from special interest groups.
Having faith in Bitcoin and blockchain tech is fine. Calling it the lowest risk investment is incredibly foolish and highlights a distinct lack of understanding of risk.
Its a junk bond bobby bought 20c on the dollar (face value 500m and and bought it for 100m) , if the town is able to bring in more tax revenue, it may increase the likely hood if it paying the bond back. The town is supposed to pay the bond back at maturity.
Unless they were bankrupt why would it go for 20c on the dollar
They were on the brink.
Still doesn't answer why the bond value would go up from increased tax revenue.
Because the town would be able to pay, the town was going into default remember(that’s why it lost so much value). If it’s able to get a casino, not only would they have a cagr of like 25% but at the end of the duration of the bond they’d get 500 million back.
It would be even better if the bond was bought using leverage
I forget this episode, but it could also be a lower credit spread if the bond is less risky. Credit spread going down means yield goes down which means price goes up
Can you explain this to me? This goes againt a lot that Ive learned.
Government bond only has 1 main risk - default risk. The default risk is so high that the bond is sold (or valued) for 100m with a face value of 500m. If tax revenue goes way up then the government default risk goes way down and the bond value will go up above 100m, hopefully back to 500m par value
No they just build laws to strategize the levels of who they're going to love themselves out as who they're going to cause the blame in their social beliefs
I wouldn't be surprised if they defaulted in our lifetime.
This looks illegal
Actually wrong. The lowest risk investment today is bitcoin. Not even the us or any other nation for that matter can stop it.
Bitcoin? U didn't even say usdt or usdc...what a joker 😅
@@reezndukwe9339 why would I?
Isn't my point clear enough?
Do you yourself even know what usdc or usdt is and why bitcoin is so secure and unstoppable?
At this point I can't really tell what you are trying to tell me with your comment.
😂😂😂 The investment that lost almost 3/4 of its value in 2022 and only recently got back to its 2021 highs. Yh lowest risk indeed
@@sirius1ishBelive what you want, it won't change the fact that bitcoin is the best store of value. I don't have the time to explain it to you.
The only thing I can recommend to you is to educate yourself and be open minded. Maybe there is something to it when even institutions are buying and recommending it. Don't get distracted by all the fake news from special interest groups.
Having faith in Bitcoin and blockchain tech is fine. Calling it the lowest risk investment is incredibly foolish and highlights a distinct lack of understanding of risk.