Might as well bury it in the backyard!

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Dec 9, 2008 2:21 pm

This is pretty crazy.

 
http://www.marketwatch.com/news/story/Investors-buy-32-billion-Treasury/story.aspx?guid=%7B09C98AE8%2DD50C%2D4A8D%2D90D4%2DB648C42B3555%7D&dist=hplatest
 
They basically gave the government their money to hold for 30 days for free!  And the bonds were oversold by four times! That's crazy.
 
Could this extreme fear be another signal of the bottom?
 
Also, Brian Wesbury (First Trust's economist), argues against a Depression #2 because in the depression there wasn't billions (or even millions) sitting in money market (or free treasuries!).  In the depression, there was a cash shortage, not now. He's got a point.
Dec 9, 2008 2:30 pm

There was a brief time where short term treasuries had a negative yield.  They were actually selling at a premium on the open market, higher than their coupon rate.

Dec 9, 2008 2:39 pm

Let's see...Brian Wesbury...Is he the one who beat his fists saying we weren't in a recession??  Just askin

Dec 9, 2008 2:51 pm
bspears:

Let's see...Brian Wesbury...Is he the one who beat his fists saying we weren't in a recession??  Just askin

 
He's also the one, about a year ago, who said the Dow would be at 14K at the end of 2008.  He may be a little off!
 
Even with that, I think he has some good information.  As I tell all of my clients, my crystal ball is broken, and that if anyone tells you they are sure of something in the future, they are either lying, or they are stupid (or both).
Dec 9, 2008 3:14 pm

And what good information does he have?

Dec 9, 2008 4:03 pm

It does seem irrational. It might -- might --  make some sense if you're trying to figure out what's going to happen next and just want to sit on the sidelines for a month or two.

I'd hate to think those big institutions that buy those treasuries have some kind of inside info that their money isn't safe anywhere else.