Treasury 3-Month Bill Rates Drop to Lowest Since at Least 1954

[Purveyor]

Source: Bloomberg

By Sandra Hernandez

Sept. 17 (Bloomberg) -- U.S. Treasury three-month bill rates dropped to the lowest since at least 1954 as a loss of confidence in credit markets worldwide prompted investors to abandon higher-yielding assets for the safety of the shortest- term government securities.

Investors pushed the rate to 0.0304 percent on concern that credit market losses will widen after the bankruptcy of Lehman Brothers Holdings Inc. and the federal takeover of American International Group Inc. In a sign of banks' reluctance to lend, the rates charged for short-term loans relative to Treasury bill rates rose to the highest at least since the stock market crash of 1987.

``It's scary,'' said E. Craig Coats Jr., who co-heads fixed income at Keefe, Bruyette & Woods Inc. in New York and started trading bonds in 1969. ``This is the worst it's ever been since I've been in the business. Nobody knows what's really going on. Systemic risk is here and there and everywhere.''

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Money Markets

``People are extremely cautious with respect to who they're lending money to at the moment,'' said Richard Bryant, a Treasury trader at Citigroup Global Markets Inc., one of the primary dealers that trade government securities with the Federal Reserve. ``They're willing to buy very short-dated Treasury instruments and forgo returns and in some cases pay for the privilege of knowing their money is safe.''

Three-month bill rates may be the lowest since the 1930s based on monthly figures on the Fed Board of Governors' Web site. Daily figures go back as far as 1954.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aDuzxeT3TsnM&refer=home

[Newsjock]

1. Hm, at 0.0304% ...

... why don't y'all send me $100,000 now, and I'll give you back $100,500 in three months. The First National Bank of Newsjock is better than the U.S. Treasury!

[Doctor Cynic]

2. So when does the US Government AAA Rating get cut?

[crazylikafox]

3. That's not a joke. They were just discussing that on CNBC 5 min ago

[mcollier]

4. SHAMEFUL!

The Fed has just dropped the rate of Money Markets investments... Where they used to be guaranteed $1 in you'd be sure to at least get $1 out.... But now that the Fed had dropped the rate to .97 Cents... Millions of Americans have just seen an Immediate Tax Increase TODAY!!!!


Example: Monday you moved 10s of thousands of dollars out of stocks into money market accounts in anticipation of a rough week... Millions of others followed suit... The Fed bails out a few Big Companies ( on the backs of the tax payers) then the Fed feels the need to punish hard working Americans who move their money into what was long been thought of as safe accounts...( Money Market Accounts), by reducing the rate of guarantee for each dollar. That would be several hundred dollars in way of an Immediate TAX .


That is an unacceptable Tax Increase at a time when we just can't afford it....


WHAT THE FUK!!! I CAN'T STAND THE bush Administration!!!!


DO SOMETHING!

http://www.youtube.com/watch?v=tUSDjd3BGng

[dixiegrrrrl]

5. Chill out....and listen to this.

Only 3 other firms hold Lehman paper in their Money Markets accounts:

1.Wachovia Corp.subsidiary Evergreen Investments,

2.Northerwestern Mutual Life Insurance Co.'s Russell Investments

3.RiverSource Investments, the fund arm of Ameriprise Financial Inc.

All three said they will support their funds to maintain the $1 net asset
value of the funds' shares.


Fidelity Investors, Vanguard Group and BlackRock Inc
had already stressed their money market funds didn't hold any Lehman paper.

The worse that can happen is Money Market accounts in the safe firms will get
lousy returns. My account only came to a grand total of 19.00
last month.

No need for yelling and screaming about the MM accounts at the moment.

Overall, we would be fools to trust anything the government tells us.
This we have known for at least 8 tears.

Calmly and quietly do whatever you have to do to feel secure financially.