The Yield on the 3-Month Treasury Bill (IRX) hit a low of .30% today on 3/19/08. Is this lowest yield that it ever went down to? This is a sure sign of pure panic and flight to safety when people are willing to settle for menial yields like this. Maverick
The yield on Treasury Bills went negative in 1932. From the FDIC website: The height of the Depression: 1932 to 1933. The Senate Banking Committee opens an investigation into the abuses that triggered the Great Depression. The interest rate on U.S. Treasury bills goes negative because investors are willing to take a loss if they know that their money is safe. Unemployment is 25 percent. National income is 50 percent below that of 1929. Stock market is 75 percent below its 1929 high. Bank runs and closings are common. In the absence of money, barter becomes a form of exchange.
The yield of the 3-month T-bill hit 0.20% today on 3/20/08 so we're getting close to 1941 levels. If the yield goes negative, we know things must be pretty bad. Maverick
And yet according to all of the "conspiracy" theorists here on ET and the believers in the "PPT". . . There is no real banking crisis and "Helicopter Ben" is simply trying to support the stock market and avoid a stock market correction. The T-Bill rate obviously tells a much different story, but the "ET Conspiracy" theorists refuse to look at that. Instead, people ( like der Kommissar, Aaron Copland, Detective, and S2007S ) have their head stuck in the sand and refuse to look at the facts . . . For them, it's ALL about the stock market, and nothing about the crisis in the banking system; which I might add is what supports job growth and economic expansion in a country where the savings rate is literally negative like back in 2005. Capital formation comes from credit generation in the banking sector. That's basic Econ 101. But for all of the "ET Conspiracy" theorists, Helicopter Ben is merely bailing out and supporting the stock market. Go figure.
imo tbills won't hit negative. tips did recently. foreign bonds is where i think excess liquidity will end up as investors look for yield and the USD turns into the new carry trade
wags don't forget stocktrader and day7793, they blame all this on the media (both) or Obama (huh?) (stocktrader)!