March 22, 2008

UPDATE: The 3-month US treasury bill is now paying 0.37%. This is not a drill.


Some animals are said to be able to sense earthquakes before they happen.

It looks like some bond buyers have the same ability.

March 20 (Bloomberg) -- U.S. Treasury three-month bill rates dropped to the lowest since at least 1954 as investors seek the safety of government debt amid a loss of confidence in credit markets.

Bill rates declined as low as 0.387 percent as finance company CIT Group Inc. drew on $7.3 billion in credit lines after being shut out of short-term debt markets. Institutions worldwide have reported $195 billion in writedowns and losses related to subprime mortgage and collateralized debt obligations since the start of 2007.

``All the evidence out there suggests there's more pain to come,'' said Andrew Milligan, head of global strategy in Edinburgh at Standard Life Investments Ltd., which manages $265 billion in assets. ``Investors are going to say they need safer assets.''

46 comments:

wc said...

absolutely we need safer assets - most ordinary people can't afford to gamble their life savings being that it seems we won't have the safety net of Social Security in our old age. Investments may pay a better return but I don't want to bet my retirement on luck when the cards are so clearly manipulated

Anonymous said...

That's shocking considering the dollar is falling too

Anonymous said...

For those not realizing what a big deal this is, 0.37% is less than the rate of inflation even if you use the completely bogus core CPI.

So just as in the old Bizzarro world comic, these bonds are guarantied to loose you money.

Why would anyone buy such bonds? Because they see no other safer choices.

ahead of the curve said...

HPers, I’ve been looking for a safe place to hide my stash from 2 properties I sold in 2006.
After doing some research I found investing in Israel to be safer then any other investment including precious metals.

I’ve seen many posts here asking were is safe to invest these days,
like Warren Buffet I’ve been investing in Israel for over a year now and it’s been like finding a treasure chest.

A good place to start -- > http://tinyurl.com/yqrdzq

It may not have the tantalizing promises of high returns like we’ve seen in other emerging markets, but if you’re looking for steady and safe returns I would recommend investing in Israeli companies.

It’s been good to me

Think ahead; get in before the so-called ‘analysts’ start recommending it.

Anonymous said...

Is this the start of a run on the dollar?

Hello hyperinflation!

This is NOT a drill... said...

Punish the Guilty NOW.

Begin at the highest levels.

Off with their heads.

SeattleMoose said...

"All the evidence out there suggests there's more pain to come"

Gee...ya think?

what a revelation.....

Gotta love the vision and deep understanding of the MSM quoted experts.

I hope something happens to Bernanke (and no, I don't mean a weenie roast on the "Spitzer")....we need an example of hubris and accountability.

Anonymous said...

Yuo knoa bonds are not a game to be played by children like yuo. Teh bond vigilantes always get it right!

Anonymous said...

I just read on the Financial Times that there are rumors that big central banks in Europe and the Fed are planning a huge synchronized bailout to erase all that cancer paper from fraudsters, at taxpayer expense.

I'm tellin' ya, Europe is scared sh!tless of their gigantic bubble that's about to burst.

Anonymous said...

HPers, I’ve been looking for a safe place to hide my stash from 2 properties I sold in 2006.
After doing some research I found investing in Israel to be safer then any other investment including precious metals.


Why? Just put your money in Switzerland, in Swiss Francs, as it's still the most stable currency around.

Anonymous said...

It may not have the tantalizing promises of high returns like we’ve seen in other emerging markets,

Get out of emerging markets now. Huge credit bubble going on in Brazil, which can attribute its recent growth mostly to hedge funds commodities fiesta. The credit market there grew 30% in 2007, while Brazilian wages grew only 3%. In Jan 08, credit grew 39% over Jan 07. Everyone there is going crazy with easy credit and, get this, financing new cars in 99 months. Yes, you read it right, 99-month car financing. You might ask, what about interest rates? Sure, rates for line of credit and credit cards at banks can run over 200% per year. It's totally unsustainable, especially with commodities collapsing worlwide. Get the f out now!

Anonymous said...

and best I can tell the world did not end in 1954

Anonymous said...

"So just as in the old Bizzarro world comic, these bonds are guarantied to loose you money."

hey Einstein, before providing financial analysis, learn the difference between lose and loose.

moron.

Guitar Girl said...

Hello, my name is Guitar Girl and you will hear me say over and over "Down w/ Bush and I hope he Burns in hell". I don't care what anyone else thinks, he is a sold-out soul. I will never have an ounce of respect or compassion for his tortured legacy and I will say it over and over.

Anonymous said...

Israeli Investments-

My friends brother has a phD in economics from Harvard. Whatever that means today . . . .

He is with a think tank in NYC-Not sure of the details but it's big. I've been hearing for the past year; the Israeli stock market and drug companies are something to watch.

Other than anti-semitic comments does anyone else have any info?

Would you invest here?

There are some great minds on this blog and I've noticed more and more people are asking for advice.

Any Insiders here want to put in some good advice for us sheeple?

Anonymous said...

Hi Guitar Girl!!

Welcome Aboard!!

Anonymous said...

guitar girl, may I suggest you get back on the medication

Anonymous said...

The FB dopes who was denying there was a housing bubble, then clung on to the stock market as proof that home prices would not fall, is now reduced to criticizing grammar errors. Poor dopes, what's a FB to do?

Anonymous said...

Who in the hell is buying this crap? The dollar declines than more than 0.37% in a day!!!

Anonymous said...

NACA & HOMEOWNERS PROTEST BAILOUT OF BEAR STEARNS (March 26, 2008)

“It is clear that the Federal Reserve and the Administration continue to blame homeowners facing hard financial difficulties in making payments on mortgages that were structured to fail, while using billions of taxpayer dollars to bailout the same predators who created this mortgage crisis and have hugely profited from it,” says Bruce Marks, NACA CEO. “The Federal Reserve’s orchestration of JPMorgan/Chase’s takeover of Bear Stearns with taxpayer dollars is an outrage,” continues Bruce Marks. “Not only did they get a fire sale price, but the American taxpayer is now responsible for $30 Billion of their unaffordable and defective mortgages. To further this outrage, JPMorgan/Chase refuses to commit to long-term solutions for the mortgages they service.”

Mitesh Damania said...

World Bnk free trade doesn't work. The peasants in India are worse off than before! Think about NAFTA and why all the hispanics are coming to the US to work.

http://video.google.com/videoplay?docid=-1551578811813630239

guitar girl said...

Hello, my name is Guitar Girl and you will hear me say over and over "Down w/ Bush and I hope he Burns in hell". I don't care what anyone else thinks, he is a sold-out soul. I will never have an ounce of respect or compassion for his tortured legacy and I will say it over and over.

Anonymous said...

Guitar Girl ,don't say it another time ,I got it the first time .

Now the Feds are engaged in a great war on savors .

In a inflationary economy you should have higher interest rates in safe accounts ,not lower .
Another way in which the savers are paying for the gamblers , who never saved a penny in their life, is that savers get low yields ,while gamblers get bail-outs .

On the one hand the government will say to save for retirement or to buy a house ,yet the Fed creates such low savings rates that they force people into bubbles .

When the rates on savings get down to 1% that is about as bad as putting it under your matress .The banks want to use savers money for almost free ,while banks loan to gamblers that they can never colect the money on .What is wrong with this picture?

The Fed Chairman is betraying his country with the current policies .Who gave the Feds the right to set up policies to bail out rich bankers and Wall Street investment firms ,while sitting up long term tax burdens for the middle and upper middle class .

Where does any branch of the government have this kind of power to bail out the rich ,set the interest rates for savings,determine future tax burdens , and determine the future direction for America.

The rich people are dependant on the regular worker to pad their pockets . The game has gotten to unfair . Everybody should pull their money out of banks and than say "Ok ,uless you pay me a decent yield I won't give you the money ,its better under my matress ." Remember ,you are a lender to the banks with your saving deposits . Why should the Fed rates they charge banks determine what yields you should get ?

Anonymous said...

Keith, did you pick up the story about all the silver inventory in us and ca is gone? Big deal bubba!

Anonymous said...

Keith, once again, rates don't matter! they are NOT freemarket.

Bernanke is buying bonds to force real rates negative. He is trying to "scare" peple out of dollars. He is trying to produce inflation.


There is no market here. Only market is what FED wants.

Anonymous said...

The market sets the bond rates not the government. They are indeed free market

Anonymous said...

Everybody should pull their money out of banks and than say "Ok ,uless you pay me a decent yield I won't give you the money ,its better under my matress ."

I extracted a wad of cash and put it into a safety deposit box:
1. Out of spite
2. Incase the S really does hit the F

Anonymous said...

Everybody should pull their money out of banks and than say "Ok ,uless you pay me a decent yield I won't give you the money ,its better under my matress ."
I did it last Friday too. All extra cash goes under mattress. I still have XX,XXX in 5.5%CDs but they will mature in 2 months.
After 2 months my XX,XXX will go under the mattress too. I prefer to lose 2%/year then giving it to the banks. :)
F@ck banks.

Anonymous said...

I think we're turning Japanese I think we're turning Japanese I really think so

http://www.youtube.com/watch?v=EpCcelpvkps

LauraVella said...

"HPers, I’ve been looking for a safe place to hide my stash from 2 properties I sold in 2006.
After doing some research I found investing in Israel to be safer then any other investment including precious metals."


I would put it all in various local 1 year CD's...I know the returns arent great, but preserving capital is the name of the game right now.

I dont know anything about Israel, but I think PM's will go much higher after this pullback. We had the same thing happen in Aug. 2006, where gold fell. It took awhile to recover, but eventually pushed gold over $1000oz.

Anonymous said...

Anon said:
“Why? Just put your money in Switzerland, in Swiss Francs, as it's still the most stable currency around.”

Have ya seen whats been going on with UBS and Credit Suisse lately?
Switzerland owns more junk paper per capita then any other country on this planet.

Anonymous said...

dis must account for the increase in surly old men needing millions to make the interest money in "retirement" to keep the roof over their heads........duh

Anonymous said...

dont forget all the propaganda that you hold to be truths when truth itself was a bought and sold commodity....delusioned brainwashed sheeple

Anonymous said...

history is written by the victors and the victors have the most money to write the "truths"

Anonymous said...

Thing about the Isareli market you have to watch out for is inflation. Israel has historically had a problem with inflation, like 10% a year some time. Oh and of course as everyone knows Jews run the world and will steal your money to fund another 9/11 with the help of the Masons, so you know,keep that in mind as well.

Toby said...

T-Bills = Cash account. Simple. Stop thinking in terms of your paltry $2,200 in savings protected by an FDIC $100k policy. Start thinking in terms of money managers with Billion$ to invest. FDIC won't cut it. T-Bills = Cash. Parking money in T-Bills has always been prudent.

Anonymous said...

I extracted cash a few weeks back and put it into a safe deposit box also, and I've been taking the max outta the ATM's at regular intervals since. It's all worthless anyway, but I'd rather force the issue in my own small way than let events destroy it all on their own. DRAIN YOUR ACCOUNTS - NOW!

Anonymous said...

I assume you guys are familiar with John Williams from Shadowstats.com? He is predicting a hyperinflationary depression due to the increase in M3. Bernanke is debasing the dollar and is going to inflate his way out of debt. I listened to an audio clip of John Williams from 2005 and he saw all this coming 3 years ago:
http://coloyan.com/society/s032208.html

Anonymous said...

Nice picture. Is that a KB home?

Anonymous said...

My friends brother has a phD in economics from Harvard. Whatever that means today

Never trust the academic types who have spent their entire lives in ivory towers. Many of them are unable to apply that knowledge to the real world. Remember LTCM and the financial wizards who almost destroyed the world economy in 1998. It's looks like they came back with a vengeance this time around.

Anonymous said...

OK, after I pay taxes on the less than 2% I would get on some saving account,I end up with even less . So,why should I give the banks my money at rates like that . The banks won't give me a 4% mortgage rate.

Just because the banks are getting a cheap deal from the Feds right now on money doesn't mean that the going rate for market rates should be as low . There is something very strange happening here .

Now the government is taking away any reasonable yield on a safe investment like a FDIC insured account . Just because the Feds like to gamble on bad notes doesn't mean that a reasonable person
would do that.

Why would the Feds contort a entire economy to prevent loan loss that can't be prevented .The Feds can't bring back the mania plus have the people really qualify .Just give it up ,give up the Plan Mr Fed Chairman .

If the Feds just broke down the proposed losses and to whom those losses would fall ,than I can get a better idea of...WHY?

Anonymous said...

I would like to see a separate thread on this website as to whether or not there will be another major revamping of the bankruptcy code after the new president is inaugurated. Has anybody heard any juicy rumors?

I was badly injured in an accident, and ended up defaulting on student loans. I had the student loans paid down to $30,000, and now they have ballooned up to well over $100,000 with all sorts of penalties and interest. I am in my early fifties, and went back to school after a divorce.

If there is going to be a major restructuring of debt, I hope that I can benefit from it. I don't have any debts other than the student loans.

Most college subjects could be learned better and faster with DVDs than at billion-dollar campuses with foreign-born "professors" reading crap their yellowed notes. The education industry is ripe for restructuring, IMO. "College for everybody" now means that jobs that used to require a high school diploma now require a college degree.

Although I have voted Republican all my life, Obama might be the ideal candidate for me this time, as I KNOW he has felt the pain of student loans!

Anonymous said...

ooops, 0.70% today as the market rises. Yet again the world forgot to end. stupid world!

corvinus said...

ooops, 0.70% today as the market rises. Yet again the world forgot to end. stupid world!

Umm... that's because the 3-month rate quite literally could not go down any further.

BondsOfSteel said...

Anon 3/22 7:51 said...
Yuo knoa bonds are not a game to be played by children like yuo. Teh bond vigilantes always get it right!

I love bond investing. It's stocks that are for suckers. Stocks trade on 'expected' earning. Forward PEs.

Bonds trade on risk. The more risk, the higher the yeild. The bond market is pretty good at this.

Sure, this is a credit crisis... but the people who are hurting were the ones chasing the highest yeilds... the most risk.

The market didn't fail... it's just the average yeild was so low for so long, people started chasing yeild. They started chasing risk.

BondsOfSteel said...

Yea, I thought the growth in M3 meant that there was too much cash chasing too little assets.

I'm now come to the conclusion that the M3 numbers were so high because of the huge leverage in the credit markets. Caryle was 32::1... Bear was closer to 40::1!

As the financials unwind their leverage, they are sucking up cash. That's the cause of the margin calls... which could easily cause more margin calls since everyone lent to everyone.

I'm guessing (and it's a guess) that the problem will end up being not enough cash... the M3 numbers will go down.

Loss of liquidity, loss of cash, loss of wealth. Deflation.

P.S. I hope I'm wrong.