This is where the t-bill rate was quoting a few minutes ago.Wow.
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17 comments:
what does this mean? I am a new investor.
my take on this is that all of that liquidity that has been created is going into the most riskless thing there is...so not much confidence.
Nobody's buying the "crisis averted" party line.
Anyone know how the rate is quoted?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXd1ebXsWbjs&refer=home
and the market moves higher ... [grin]
May *you* live in interesting times; *I* want to be bored for a while.
Fred
I too would like to be bored.
I'm not necessarily in either camp, but in my opinion, these are defining moments.
The Economist thinks the crisis is still playing out, and says this:
Because this crisis taps so deeply into the newly devised structures of finance, anyone who says the worst is definitely over is either a fool or someone with a position to protect. As risk has become bewilderingly dispersed, so too has information. Nobody yet knows who will bear what losses from mortgages—because nobody can be sure what those loans are really worth.
The full explanation can be found here:
http://www.economist.com/opinion/displaystory.cfm?story_id=9646451
John
The comment format did not allow me to post the full URL, but the article is the cover feature (I think) and in the opinion section of The Economist.
I used to be against socialism but with these interest rates, Uncle Sam should just LBO the whole stock market. Keep it nationalized for a couple years, then privatize everything over the following couple of years. Probably make a few hundred billion on the trade.
This from CBS Financial:
"Yields have plunged sufficiently enough today to indicate that the psychotic atmosphere that has gripped the financial markets recently remains in place," said Crescenzi.
Yields on Treasury bills declined sharply as money market funds unloaded asset-backed commercial paper in exchange for the shortest-maturity government debt, with three-month yields down the most since the 1987 market crash.
"Heavy buying, particularly in the very shortest dated Treasury bills at rates below 2% reflected craven fear," said analysts at Action Economics LLC. "Investors were reportedly getting out of even supposedly 'safe' money markets, and taking cover in T-bills, especially after several 'enhanced" money market funds were hurt by their exposure to the now shaky commercial paper market"
And also this from The Economist:
"Steep falls in yields on American Treasury bills (the purchase of which is the financial equivalent of stuffing notes under the mattress) would be another sign that investors think this storm will continue for a while."
http://www.economist.com/finance/displaystory.cfm?story_id=9675565
http://www.forbes.com/home/opinions/2007/08/20/croesus-chronicles-liquidity-oped-cz_rl_0820croesus.html
Forbes article August 20th
Roger.
What do you make of this comment from the above Forbes article?
"Watch the debt markets for signs of what to expect in the stock market. The debt markets are twice as large as global equity markets, over $100 trillion, compared with $50 trillion. They are an early warning sign of troubles ahead."
And how does one monitor this debt market? Thanks.
I've asumed that the collapse in T-Bill yields in the last several days was due to concerns about money market funds.
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