Bill Yields Turn Negative On Safe-Haven Un-Rotation

Tyler Durden's picture

As stocks have vascillated in a worryingly not-straight-up manner for the last few days with today's weakness taking the Dow and S&P 500 pre-holiday lows (with th ebiggest drop in a month), it would appear more than a few 'investors' are greatly unrotating into the very shortest-term Treasuries as a safe-haven from the turbulence. The last few days have seen Treasury-Bill yields swing negative in the less-than-1-month maturity indicating anythng but risk appetite as a scramble for safety is strong enough to warrant paying (albeit marginally) for it. As we noted previously, the driver of Bill Gross' 'bet' on the short-end will not be based on always wrong expectations of what Fed monetary policy does to prices, but the exodus of speculative money from equities into safe havens, call it the Great Unrotation.


The mid-Feb bills are so aggressively bid as to push the yield negative...


Of course, what is also problematic for those seeking safety is the wall of doubt starting in early March over the debt-ceiling debacle...


Charts: Bloomberg

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jcaz's picture

Nice trade, Bill....

rubearish10's picture

That's alright, -20 ES points is the FED daily limit, so, BTFD.

frankTHE COIN's picture

I want my PoMo.
Mapo is too weak.

LawsofPhysics's picture

Ah yes, paying the .gov to lose your money.  What could possibly go wrong?  As far as I can tell, both Mr. Gross and The Fed have tons of junk paper that they need to sell to someone.  The more they try to appear solvent and credible, the more I am inclined to believe that they are not (applies to both The Fed and PIMCO).

CClarity's picture

People do pay for safety. Just ask the Swiss. In the course of world events and history, wealth preservation has been more important than the return on wealth despite what hawkers of so many products say as they attempt to pry your wealth out of your greedy fingers.

LawsofPhysics's picture

As I said in 2008/2009.  The game has indeed changed, from one of seeking a return on capital to simply a return of capital.  However, if those bonds (safety) are "priced" in rapidly devaluing fiat, you are still losing, big time.

Refer to the following;

When fraud is the status quo, possession is the law.  trust me, the swiss possess a few ounces of gold.

Lewshine's picture

If tomorrow end up being "The great D day (as in dissolve)", I think ZeroHedge should go into the truther's hall of fame!! Damn!

AmericasCicero's picture

If that does indeed happen - spot on the day - I will sh*t a Bernanke.

AmericasCicero's picture

If that does indeed happen - spot on the day - I will sh*t a Bernanke.

disabledvet's picture

one does not "un-rotate into treasuries." that's Planet...and moving that market because it is so big should be an impossibility. "Yet Ben Bernanke" (on the record demander of inflation) had no problem dropping those rates to all time record lows. "that should not be possible unless some REALLY bad news is on the way."

CrashisOptimistic's picture

Rates fall because of poor economic prospects. 

This has been so for 30 years.  Why would now be different?

firstdivision's picture

K-Hen taking a long dump?  Woudln't he be required to take his mobile bbg into the restroom with him?

Agent P's picture

Negative yield....does Amazon have anything to do with this? 

Spungo's picture

So they would rather hold negative interest bonds than keep it as cash in an American bank? Go long American banks!

NoDebt's picture

FDIC insurance doesn't apply when you're talking about anything over $250K per individual (not per account) at any one institution.  You gotta have a LOT of accounts at different banks to insure even $5MM, let alone if you're talking about billions.

BORT's picture

Ken Jorgustin of Modern Survival Blog writes:

Is there a major financial crash in our near future? You must check out this stunning analogy between the current day Dow Jones Industrial Index compared with the time period 1928-1929 leading up to the memorable stock market crash…

The pattern of stock price movements looks VERY close to the lead-up to the 1929 top.

A lead-up to just any old top is one thing, but the 1929 top was followed by a memorable decline, which makes it all the more worthy of our attention…

Ken stops short of predicting that stock markets will do the same thing this January as they did in 1929, but take a look at this amazing comparison and decide for yourself if it’s possible that this whole thing will break wide open on or around January 14th of 2014:

Quinvarius's picture

I guess we are supposed to believe rational thinking individuals are choosing to buy these products?  Heh.  This just looks like way too much money floating around and it is all dumb.  Or it is just gov/fed pr.  No investor that understands what they are doing would invest their own money like this.

TheFutureReset's picture

Is this the elites run down for the next step in taper? A taper will hurt EMs and China by association.