Monday, June 14, 2010

ALERT: Further Decline in T-Bill Rates

The continuing mystifying decline in T-Bill rates continues.

The yield on the one-month T-bill is now at  0.005 %. This is a drop of -0.014 or -36.842%, from Friday. Less than a month ago, on May 20, the one month was at a 52 week high, yielding 0.165%.

The decline in rates means, somewhere, somehow, very serious money wants to be in a totally risk free, virtually no yield position. Yet there does not seem to currently be the panic anywhere in the world that would justify this flight into T-bills.

This kind of activity doesn't happen without something breaking in the markets somewhere big time, very soon.

(Thanks to Michael Dunton at Mt. McKinley Bank for the rates update)

3 comments:

  1. Unrelated, but Bob, you may want to reconsider your "Serious Deflation in D.C." advertisement placement. For a couple of days I would surf your page, see the same post, and skip on to the next site. It took me a bit (duh) to realize that this was sticky and your real posts were accumulating below.

    Just a suggestion.

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  2. Bob,

    Is it possible that the huge demand is coming from mutual fund managers terrified about losing more money and just looking for guaranteed (albeit tiny) returns?

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  3. The european banking crisis?
    Or maybe its just short term monetary expansion by the fed?

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