Money for nothing, and your chicks for free...

[GliderGuider]

http://www.businessweek.com/investing/insights/blog/archives/2008/12/investors_are_e.html?chan=top+news_top+news+index+-+temp_news+%2B+analysis">Investors are expecting a lot of deflation

The U.S. Treasury completed a remarkable auction of four-week Treasury bills today. No surprise that there was a ton of demand for the only investment still viewed as a safe haven — there were bids worth $120 billion for the $30 billion of bills being sold. But how low did bidders go on the yield they’d accept to own the bills? All the way down to zero. That’s right, the U.S. government just borrowed $30 billion at a cost of zero percent interest. That follows yesterday’s auction of 3-month T-bills at the microscopic rate of 0.005%, the lowest since the long-running 3-month maturity first hit the market in 1929.

According to a Bloomberg report on the bond market today, the 3-month bills are now trading at a negative yield, meaning buyers get a guaranteed loss, albeit a small one. One trader cited by Bloomberg noted that companies are eager, even desperate, to show they hold only ultra-safe T-bills on their balance sheets for fourth quarter earnings reports so they’re willing to accept the negative or zero yields.

That’s an awfully high price to pay for sleeping soundly at night, but if you have more money than can be easily kept under bank insurance deposit limits, there aren’t many alternatives. And it implies that investors are so worried about the safety and possible decline in value of most investments that they’re willing to lend merely on the assurance of getting their principal back intact. While some analysts fear runaway inflation from all the government bailouts and borrowing, the T-bill market at least is giving a pretty clear signal that’s not what is on big investors’ minds. They’re worried about the opposite, widespread deflation from the ongoing credit crisis, like the falling prices that occurred during the Great Depression.

[ShortnFiery]

1. And the fix is in for the CEOs of the US Auto Industry. There won't be one red cent for "the people"

once Obama is in office. That will suit the Corporate Leadership within both parties just FINE.

The fix is in. :evilgrin: