"Cash Is King" Again - 3-Month Bills Yield More Than Stocks

'Reaching for yield' just got a lot easier...

For the first time since February 2008, three-month Treasury bills now have a yield advantage over the S&P 500 dividend yield (and dramatically lower risk).

Investors can earn a guaranteed 1.90% by holding the 3-month bills or a risky 1.89% holding the S&P 500...

The longest period of financial repression in history is coming to an end...

And it would appear TINA is dead as there is now an alternative.

Comments

ElTerco new game Tue, 05/15/2018 - 06:23 Permalink

The implied risk on corporations will be higher than the implied risk on governments. For corporations, all that debt they issued is soon coming home to roost. For the government, they can just print their way out of the problem. There are no winners here, but one of the choices loses more quickly. Don't expect raising prices to be the answer for corporations -- the consumer is already way over-leveraged. Look at car sales and $1000 iPhone sales. Look at the rising percentage of millennials living at home with mom.

In reply to by new game

buzzsaw99 Tue, 05/15/2018 - 05:41 Permalink

cash is king?  $13T in bank deposits drawing zirp would probably disagree.  banker bonuses are loving it though.  they get the gold mine, we get the shaft.

Let it Go Tue, 05/15/2018 - 06:08 Permalink

We never know what the future will bring but if it is a financial crisis liquidity is generally one of the first things to dry up and when it does cash is king.  In my line of work I do a great deal of negotiating and I have found one word people wanting to reach an agreement don't want to hear is "IF"! This is why I will never call the holder of cash stupid unless it is during a long period of massive inflation. More on this subject in the article below.

 http://Stupid To Hold Cash? I Think Not!html

Quinvarius Tue, 05/15/2018 - 07:38 Permalink

You can practically see that moron Kudlow undoing all of Trump's work on the economy last year with his strong dollar mental disorder.  Kudlow is not an economist.  He is a financial engineer.  There is a difference.  He is bad for the real economy, but good financial institutions and traders.  Kudlow is more of the same fail we have had for decades where stocks matter more than real jobs.  Watch Kudlow and his strong dollar enter, while jobs leave.  This isn't the 80's anymore, Kudlow.  The place has already been gutted.

21st.century Tue, 05/15/2018 - 07:43 Permalink

There's always a place for 3mo T-Bills-- they're correct for some cases. 

Cash- whether  digits, gold or paper always have a sense of freedom to offer. Not much else is real, so, a pile of fuck you cash in the safe can feel real nice.

zir realities aside, even if idle money doesn't beat inflation -- always future inflation is warned about-- for some -- cash offers a small throne to rest on.

surf@jm Tue, 05/15/2018 - 08:12 Permalink

Cash is king while earning less than 2% interest in a greater than 5% inflation environment.....

You really need to get off that crack pipe......

Or better yet, quit trying to stick it in our mouths.........