Investors Buy $32 Billion In Treasury Bills For No Yield

[Purveyor]

NEW YORK (MarketWatch) - The Treasury Department sold $32 billion in four-week bills Tuesday at a yield of zero, implying investors purely wanted the assurance that they would get their principal back.

Investors bid $128 billion at the auction, more than four times the amount available.

Yields on one-month debt have plunged from about 1.80% in June. "I have never seen this before," said Michael Franzese, head of government bond trading at Standard Chartered.

"It's all about capital preservation for the turn of the year, not capital appreciation."

MARKETWATCH: http://www.marketwatch.com/news/story/Investors-buy-32-billion-Treasury/story.aspx?guid={09C98AE8-D50C-4A8D-90D4-B648C42B3555}

[slackmaster]

1. I'm sticking with collecting curio and relic firearms

I'm sure they will hold their value.

[Birthmark]

6. Depends on how hungry you get, no?

[slackmaster]

7. No, not really

My plan is to keep my collection, and expand it as much as possible, until my retirement. After that it will serve as a source of hobby projects, e.g. restoring rifle stocks and building custom firearms. If I need to, I can always sell some for cash.

[originalpckelly]

2. Doubleplusungood.

:scared:

[HamdenRice]

3. Global investors line up to shovel trillions of free money to Obama

That's one of the stories that much of the mainstream and alt press simply don't get.

There is $70 trillion in global savings looking for somewhere to be invested, and right now, "somewhere" is anywhere but the stock markets or the credit markets or the bond markets or the money markets.

The holders of that $70 trillion are so scared, that the only place they want to put their money right now is in US Treasuries. They want to put their money in US treasuries so bad, that they are willing to accept zero interest for the privilege of loaning Uncle Sam money. In economic terms, that's free money.

This article is about 4 week T paper (govt equivalent of commercial paper), but even more shocking, the coupon rate on 2 year Treasuries is zero.

This means Obama can borrow trillions on stimulus and as long as the return on investment is non-zero, the govt will make money on the New New Deal.

What happened to the "let it fail" chicken littles who said that the bailout was making Uncle Sam look so insolvent that no one would lend to him? What happened to the chicken littles who said that the global investment pool thought Uncle Sam was going to default?

Looks like when the shit hits the fan, that $70 trillion wants to be in US T-bills bad, real bad.

[Robbien]

4. Isn't much of that being done by foreign governments

who really really don't want the US system to fail believing their countries will be pulled under in the undertow if it does fail?

[A HERETIC I AM]

5. One of your statements is slightly misleading.

This article is about 4 week T paper (govt equivalent of commercial paper), but even more shocking, the coupon rate on 2 year Treasuries is zero.

(italics mine)

It's not really shocking, because it is not true. The coupon rate of a two-year Treasury is 1.25%. According to Bloomberg, today the yield on a 2-year is .86%. The yield is down because the price is up. 3, 6 & 12 month Treasury paper are "Zeros" meaning they are bought below par, pay no interest payments while owned and mature at par. 2, 5, 10 & 30 year Treasuries all pay a coupon. Zeros that yield nothing do so because they have been bid up to the point where they are sold at or very near par, thus their yield is next to nothing.

A few weeks back, 90 day paper was bid above par so that the yield was actually negative, albeit by a very slight amount. Essentially buying a note for $1000.00 and getting $999.99 back. That situation lasted only a very short time if I recall - like for one day or so.

[Greyhound]

8. It boils down to this; the world economy cannot exist without us, so there's absolutely nothing

they will not do to prop us up.

This is so much bigger than most understand.