Day 3

Today, once again, I arrived at Mr. Dorflinger's house at nine in the morning. When I walked in the door he already had my material for the day waiting for me. After a quick review of corporate debt, money market debt, and equity, Mr. Dorflinger gave me an overview of U.S government debt. After the overview I hit the books. Through reading about government debt I learned that it is the largest most active trading market in the world. The three main securities in government debt are treasury bonds (T-bonds), treasury notes (T-notes), and treasury bills (T-bills). T-bonds' maturities range from ten to thirty years, T-notes range from on to ten years, and T-bills range from one week to fifty-two weeks. Outside of these three securities there are multiple other securities that are classified as government debt. Some of these are treasury strips, pass through certificates, treasury inflation protection securities, and collateralized mortgage obligations. Any time and individual or a firm purchases these securities they are cleared through the Federal Funds as supposed to a clearing house like corporate debt. Also the Federal Reserve itself actively buys and sells government debt to control interest rates.