Monday, April 04, 2011

Wanna Get Robbed? Go to the Bank!

Mish makes a good point here.

Inquiring minds investigating Citigroup's cost of funds note that Citigroup 5 year CDs yield a mere 1.5%.

The rate is the same from 30 days through 5 years. How nice.

...the "guarantee" in question is a complete ripoff. It's a ripoff because 5-year US treasuries currently yield 2.35%.

You can buy Treasuries directly, or through a broker. IIRC, the minimum was $10K--not a huge amount--and you could buy 5- or 10-year bonds.


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