Four week bills just went at 0, (zero), per cent?

Discussion in 'Wall St. News' started by hughb, Dec 9, 2008.

  1. hughb


    I thought I just heard this on Bloomy, this couldn't possibly be right? Can one of you fine ET'ers verify?

    Treasury Sells $30 Billion of Four-Week Bills at Zero Percent

    By Cordell Eddings and Daniel Kruger

    Dec. 9 (Bloomberg) -- The Treasury sold $30 billion of four-week bills at zero percent for the first time since it began selling the securities in 2001 amid persistent demand for the safety of U.S. debt during the worst financial crisis since the Great Depression.

    The bills were sold at a high discount rate of zero percent, the Treasury Department said today in Washington. The government received bids for the bills totaling more than four times the amount sold.

    “It’s the year-end factor with those four-week bills,” said Chris Ahrens, an interest-rate strategist in Greenwich, Connecticut, at UBS Securities LLC, one of the 17 primary dealers that trade directly with the Federal Reserve. “Everyone wants to be in bills going into year-end. Buy now while the opportunity is still there.”

    Indirect bidders, a group that includes foreign central banks, bought 47.2 percent of the amount sold, compared with 31.7 percent in the prior auction. Primary dealers bought 52.1 percent, while direct bidders such as individual investors purchased 0.7 percent.

    Yields on government securities have plummeted this year to record lows as investors have gravitated toward their safety as stocks and emerging-market assets plunged. Rates on three-month bills, viewed as a haven in times of turmoil, traded at a negative rate of 0.01 percent today. The Treasury sold $27 billion in three-month bills yesterday at a rate of 0.005 percent, the lowest rate since it starting auctioning the securities in 1929.

    The rate on four-week bills peaked at 5.175 percent on Jan. 29, 2007. The government began issuing the four-week bills in July 2001, according to Stephen Meyerhardt, a spokesman for the Bureau of Public Debt in Washington. The bills are intended to reduce the government’s reliance on irregularly issued cash management bills.

    To contact the reporter on this story: Cordell Eddings in New York at; Daniel Kruger in New York at
    Last Updated: December 9, 2008 14:03 EST
  3. Why are you suprised? Yesterday 3 month bills sold for $9,999.87 giving a profit of 13 cents over 3 months on your 10 Grand.
  4. Hahaha I want negative yields!
  5. It went negative today. It's officially more safe to put your money under your mattress.

    Treasury Bills Trade at Negative Rates as Haven Demand Surges

    By Daniel Kruger and Cordell Eddings

    Dec. 9 (Bloomberg) -- Treasuries rose, pushing rates on the three-month bill to negative 0.01 percent, as investors gravitate toward the safety of U.S. government debt amid the worse financial crisis since the Great Depression...
  6. I'll sell you T-bills for more than $10,000 each. How many are you bidding for and at what premium?
  7. Me too ! They gotta throw in one of those foreclosed houses and a new GMC car if they expect me to bite ! :D
  8. I don't quite get it.

    There are plenty of safe places for your money that pay way more than zero.

    Now if you have to move 100 million at a time you may have a problem.

    No one with less than 10 million is forced to stick the money in the mattress for zero returns.
  9. I can think of several less-than-looney scenarios where that wouldn't be true - and I don't even have a particularly active imagination.
  10. Many brokerages allow you to use treasury bills/bonds for collateral. People might not trust their brokerages with their cash.

    In this case, it does make sense.
    #10     Dec 9, 2008