Wednesday, December 10, 2008

Federal T-bills become the new mattress, even with furniture stores out of business


The latest shocker in the “business depression” 2008 saga is that now investors are buying T-bills for 0 yield, and that for a while Tuesday they dipped into negative interest rates. That is, investors would pay Uncle Sugar to hold money under the mattress! This looks grim, at the same time that the World Bank officially says we are in global recession, with nothing in sight short of another Roswell invasion to stir it up. Anywhere in the Universe, any civilization advanced enough to have money will experience cyclical business depressions (even among multiple planets) just like we do.

Vikas Bajaj and Michael M/ Grynbnaum have a front page story Dec. 10 2008 in The New York Times “Investors Buy Federal Debt at Zero Yield: No return, but a way to protect cash”, link here.

Renae Merle and Steven Mufson have a story on p D1, Business, of today’s Washington Post, :”In new sign of investor fear, T-bill yields go negative”, link here. It seems that US Treasury bills have gone bald on the legs.

Steven Pearstein has a “Suze Orman” like column (on the same Business front page in the Post) castigating our world’s business leadership, “A Perfect Storm: No, A Failure of Leadership”, link here. The article is called “Executive Indemnity”, as if executives were book authors. He mentions the behavior of the fishermen (Billy Tyne) in Sebastian Junger’s “The Perfect Storm” as motivate by short term focus and indirectly by herd mentality. But I think this is more a matter of what George Soros calls “market fundamentalism” failing on its face.

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