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Treasury Sells 3-Month Bills At 0% Yield For First Time Ever
"Investors" are so desperate to hold on to short-term paper that they paid $100 for a 3-month Treasury-bill at today's auction. That is a 0% yield - for the first time ever - lower even than the auction right after Lehman's bankruptcy in Nov 2008.
Chart: Bloomberg
It is probably safe to say that NIRP is next, followed by more negative yields further to the right of the curve, as the US gradually becomes Europe.
But don't worry: as Yellen admitted during her healthcare-scare speech, "nominal interest rates cannot go much below zero", just a little.
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Hey, that's the same interest that I get on my silver coins!
Why didn't Tyler say bubble ? Cuz that's what this garbage is
Excrement of goat to quote Brother of Lehman.
if a 0% bond is just cash with a counterparty, what kinda idiot is buying this shit?
Globally there are many pensions required by law to own "safe" investments in the bond market. Some may be led to slaughter seeking "protection" from equity markets
The idiots are mutual funds, pension funds, insurance cos, etc who are not allowed to hold "cash".
Cash isn't "cash", for most it's just an electronic blip. Real paper cash is the way to go.
Well you see, bonds look expensive now but in a few months when they are negative you'll wish you had some of those sweet sweeeet par bonds in your book.
Call me when the US ten year is negative five percent and we can talk about maybe nearing the top of this bond bubble....
You have gotten 7 percent on those coins in two days, not including premiums.
More to come.
We NIRPED some folks...
Can someone tell me why anyone would lock up their cash for 3 months for no return? Who is buying these things?
This leads eventually to the NIRP bail in scenario in banks.
Avatar aper.
Well, at least your silver is something fucking real! I have never had a hard time exchanging it for the fruit of another's labor.
Yeah, but the treasuries have not lost 50% of their value.
Smart trade is to sell those silver coins while the price is over $10
this guy gets it, silver is going back to 5 dolla, make you holla.
I am still an incremental buyer under 20 on the way to 5 may just get my fill around there then hold on for the moonshot.
Anyone thinking gold and silver cant go another 50-75% lower from here is fooling themselves. How many miners have gone to zero thus far? Not nearly enough is the answer to that.
Of longs its my only one but still, do not think for one second you are not taking a large risk (at least as much risk as buying the indexes here or maybe even more than say a Facebook or Netflix depending on what you buy) buying metals and especially individual miners here are fraught with risks in both directions. The FED and .gov will bail out the Dow S&P Nasdaq issues in probably that order, maybe Russell 2k but they are all pretty much the same. They will not bail out HUI or GDX. They will not bail out ABX or AU or IAG. These things will either go to zero of multiple hundreds of percent higher.
How many miners are on the listed market, anyone know? When 50% have been de-listed buy everything metals and miners until then strong sell on any uptick against short bonds one to one notional.
or if you wanna get crazy 1GC/1SI/1PL/1HG vs 2ZB/4ZN sell em all and let the market gods sort em out, I go a bit moar bond heavy personally.
My book now though is a large bond short paired against a flotilla laden down stem to stern with short facebook deltas and a slight bullish volatility bet in equity and bond volatility, more bullish bond volatility. The flotilla is anchored with metals and miners.
Bad news is I am happy with my bond short, that means the bottom is in for bonds and they will probably go straight higher for the remainder of this decade, next stop the moon....
People say I should act my rate...
Well, what's my rate again...what's my rate again?
Rate hike imminent..., Lol. The countdown to NIRP is on.
I'll put the champagne on ice.
We have odds on when rate hikes are likely to occur, where are the odds on when the nirp is incepted and how much
"Let me just stick the tip in and see how it feels"......
https://www.youtube.com/watch?v=HnEmghSrOig
The Plan is for them to make $$ off their debt. And it has been for decades.
Good thing there is no inflation.
$400 billion in deposits pulled from Fed:
http://i2.wp.com/bawerk.net/wordpress/wp-content/uploads/2015/10/Deposit...
Well ... duh!
PPT has been working overtime this past week and had to do some stealth QE. The problem is that they did not have the printers running so they had to dig into the piggy bank.
yet NY FED pumps up reverse repos by $100 billion more last Friday to give collateral to their friends to short treasuries and maintain an incredibly steep yield curve that has no bearing on reality. what a joke.
ZH and the Tylers don't seem to focus on the NYFED and the William Dudley anymore.
Why is that?
mister dudley doesn't care anymore - he seems to have gone overboard with that mega trading desk of his organization. hopefully he will be gone when the dominos fall. they will fall.
^^^this. Fucking amazing that dollar reserves are not being sold/dumped around the world. Who knew that a "dirty shirt" or "pushing on a string" had so much power....
same as it ever was, at least until the supply lines break in earnest (i.e. the SNAP cards don't work).
The FED sold their constituents/cronies derivatives protection in the form of swaptions.
Rates only matter so much if you have a rate enhancing or minimum rate contract.
-Think 'side letter' in insurance parlance.
The Treasury Market has long since been bifurcated: one set of interest rates for you and another set for the Cartel Banks who are being covered with side-letter/swaption insurance at issuance.
Think of it as a monetary boilermaker: a swaption/shot in every treasury/beer served to the Regulars by Barmaid Yellen.
http://www.federalreserve.gov/monetarypolicy/files/FOMC20030625meeting.pdf
And gold is pushed down at the same time. Everything is awesome!
HUZZAH!
THIS MEANS OUR FEDERAL MONEYS HAVE BECOME INFINITELY VALUABLE!
(and our spiritual one-ness is beyond level 42)
(dick)
When rates on the five, ten, or 30 year go negative in real terms, it is game over for the FRN.
Period.
A ways to go yet.
They are trying as hard as they can and it's hard work destroying an entire economy.....
Retirees I know who did not save big time and getting devastated big time due to the zero returns on their savings. No one could have predicted how much they hated the middle class savers and retirees.
I had to sign in to up 1 you.
I was that saver
I only know two types of Retirees.
1. Public Pensioneer. "PAY ME."
2. Union/Corporate Pensioneer. "APPLE, GOOGLE, HOSPITAL CORP., TENET, COMMUNITY HEALTH.."
Sheeple deserve shearing.
Fedgov notes are parnerships. Sheeple are very very junior. They get, or don't, what they are told to get.
Pubic skools have conditioned farm raised trout like obedienced.
Basically most old people are government bitches. Old ugly ones waiting around for Uncle Nappy to come by with the government chedder.
Good luck with that.
Obamacare deathcamps await. Don't worry about digitalized "savings". That delusion sailed off long ago.
All yer monies belong to the gubbermint!
I'll say one thing, the Fed has done a marvelous job of brainwashing many people. What a scheme. Let's convince nearly everyone that "wealth" and "paper" are synonymous, then create it ad naseum to infinity. What could possibly go wrong with that?
-Argenta
CNBC should recall all those guests who were calling for 3.5-4.00% on a US 10-year & all those "great rotation out of bonds into stocks"
i guess they could do that but it would fill an entire days worth of interviews (and only at 5 seconds at a clip).
im starting to think the feds newsest, biggest fear is that they raise interest rates 25 bps and long rates drop. THAT would show the "investment world" just how fucked things really are.
The Fed doesn't know what to do with the tens of billions of dollars they print everyday so they keep buying worthless US Treasury debt.
Just wait until everyone else tries to dump their dollars too...
Who’s buying? For zero earnings you can just hold cash which has more liquidity, i.e., you don’t tie up your money in case a better opportunity comes along during the next three months.
The only reason I can imagine is if the buyer wants to support government borrowing, and what buyer would be willing to do………..
Oh, right.
Yes, basically it is the same as it ever was!!!!
The only other way to get the same result that has been successfully used in the U.S. is of course war bonds!!!
danger... danger... danger...
betting on negative rates?
Sometime, somewhere, this has to lead to a DIVIDE-BY-ZERO ERROR.
No ?
Put the C+ down.
Round-robin central banks buying each others debts.
Japan, Europe and the US. All doing it to prevent an epic failure.
Doug Caey call's it a "global game of old maid."
The only question is who gets stuck with the bitch card?
'For the first time in 70 years'. Fixed it for ya
Yes, remember those war bonds?
game fucking over when rates go negative!!! maybe sooner as everyone is in the same boat..
Um...only so many seats, comfortibly, in the boat. Everyone else, the too small or systemicaly unimportant..over the side, and no clinging either or you get a FEMA oar down the middle of your skull.
Eeeeeeeeeerrrrccccchhhh
Tires off pavement
Wait till Janet announces QE4.
Not with much of the world positioned to dump their dollar reserves, no fucking way.
Free money Bitches !
Why bother?
last week I told tylers to buy the S&P and sell by the 1983's. After a brief observation between buyers and sellers imbalances, my advice is to exit the LONG position NOW. not that the sellers are present right now, but neither are buyers. SO as a margin of safety, exit the longs, in case you are long.
This Treasury bill auction at 0% interest should not surprise anyone, since the 3-month rate has been below 0 for several weeks now. Today, the 6-month bill has also moved into negative territory. What to do? Hold more cash (in the form of currency), in the expectation that we have a good chance for a bank holiday with ATM's out of order.
For the average person, it’s easier to keep your safety net in things like a savings account at the bank. Besides, they are FDIC insured if you’re within the coverage limits, so why even bother with treasury bills? So, who’s buying these zero-interest bonds and why?
"FDIC insured."
Lol, cute.
Hot money players who want to be able to get back out in a hurry. They are parking money in a safe haven and paying a small fee for the services of the attendant.
If they put it in a bank, it might be frozen in place for months and years even if it is eventually FDIC-ed into life again. If the Treasury goes bye-bye, it's all over everywhere anyhow.
Crazy that it's holding together.
its all shits and giggles till the military is shooting people in the streets and hauling others off to FEMA CAMPS to be killed or inchipped with a super cool RFID chip.................................*grabs popcorn*
At 0% yield, better hold Cash. Better liquidity, and with smaller fees if some is stored in private bank vault (at home and/or office), and some is in Brokerage account for BTFD events.
If you can't afford a multi-million Euro/Dollar painting or fancy digs offshore as an investment in real assets that hold or increase their value, and you have your % fill of PM, and still seek a good ROI or Yield, then try select commodities (Vintage Wine and quality Spirits by the case, Collector Guns...) -- just to diversify and hedge a bit.
And if you're still further down on the food-chain and terminally worried about TSHTF, be sure to stock up on TP, soap and associated products. And don't forget Meat & Pudding*, Vines & Vino, and Beans & Beano.
* How can you have any pudding if you don't eat your meat?
pfft, i'd probably not notice.
TP is a relatively recent invention, prior to that old phone books were the norm (or the sears-roebuck catalog), cornholing comes to mind (cornholio).
soap is easy to make, has been for centurys, and the ingredients take care of the meat/pudding dilemma.
also makes preps easier to hide when they are broken down into component parts, nobody looks for a 50lb block of wax when they want candles...that would require WORK oh the humanity.
More important is to be reconciled to Christ; He came, he worked a perfect work, He died and He rose again, for YOU...now that is "Love Worth Finding" and an impenetrable safety net from all evil.
Up voted cause its true, but commenting to remind you you've still got to buy silver. Trust in Jesus, buy silver.
The Lord helps those who help themselves-- and get prepared to help their fellow man as well.
The Fed will only raise rates if Trump is way ahead in the polls in late Spring.
Saving is the same thing as hoarding, and in times of national crisis hoarders must be punished
Here are some signs of a coming recession.
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
http://michaelekelley.com/2015/09/27/vix-predicts-pits-while-pundits-have-fits/
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Do not touch your dial, there is nothing wrong with anything, everything is awesome, we have entered "The Twilight Zone".
All the numbers are hitting the wall composed of absurdity.
Who would give someone money just for the heck of it? why not just.... keep your money?
Here you want to buy this bond I am selling? give me 100$ and in three months I will maybe give you your 100$ back.
0_0
The only logical reason anyone would doit is to launder money . . . or if they knew that the bond would be payable in a different form of currency than it currently is set in.
IE: People knew that USD'S were going to vaporize and the bonds were payable in whatever comes in and replaces USD's.
Lets say the Dollar goes away (the U.S. govt says that it is no longer a valid currency and that everyone must switch to a new currency USD 2.0 or E-USD or something) what happens to Treasury Bonds and Government Debt obligations? do they become payable in a new currency ? 0o and why would someone hold bonds instead of Gold or Silver.
There is also the possibility that people think the dollars they have now will be more valuable in the future so they would rather put their money in treasury bonds instead of the bank even for zero interest because its "safer"?
wtf why would you buy a bond with no yield 0o?
The only logical conclusion I can come up with is people are buying Bonds with currencies that are worthless and expecting to get paid in USD'S that have appreciated in value relative to the Shit Notes they used to buy the bonds.
This is nuts how long can such a ponzi scheme last 0o?
If thats whats going on the Treasury should liquidate these other currencies ASAP before it pins itself into a bad position or simply demand that consumers buy gold or silver or dollars to exchange for bonds, the U.S. govt should not be hoarding other nations worthless currencies.
Have a beer and a bellow. The Bankers Song
http://www.cdbaby.com/cd/thatguybloke
Something is better than nothing right? Oh wait....