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3 MONTH T-BILL TANKING!!!!!

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3 MONTH T-BILL TANKING!!!!!

Unread postby Roccland » Mon 20 Aug 2007, 13:18:39

Holy Fuck!!!

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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby seahorse » Mon 20 Aug 2007, 13:34:34

Hey Roccland,

The graph or link you tried to post isn't showing up.

Also, someone please explain the significance of a tanking of the 3 month bill.
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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby Twilight » Mon 20 Aug 2007, 13:46:00

$this->bbcode_second_pass_quote('seahorse', 'A')lso, someone please explain the significance of a tanking of the 3 month bill.

I am guessing that investors are beginning to flee into government debt en masse, leaving corporate debt markets behind. So if the liquidity problem we had before was like a drought, now people are bringing pumps and jerry cans.

It's a loss of confidence thing. Companies are going to default before governments.

Someone with training could of course correct me.
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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby Roccland » Mon 20 Aug 2007, 13:50:08

IMage Link

Go to the link below for the analysis...looks like the market is in a VERY bad spot...no buyers for our debt so the Fed is trying to intice suckers into buying the 3 month bill by dropping rates.

If the fed lowers again - tomorrow - they will admit to the world they have no control and the market could crash.

Does not look good.

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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby Plantagenet » Mon 20 Aug 2007, 14:08:18

$this->bbcode_second_pass_quote('Roccland', '
')Go to the link below for the analysis...looks like the market is in a VERY bad spot...no buyers for our debt so the Fed is trying to intice suckers into buying the 3 month bill by dropping rates.


You don't entice people into buying T-bills by lowering interest rates....that makes them less attractive to investors.

The effect of lowering interest rates on super-safe T-bills is to make other riskier investments (such as stocks or real estate) relatively more attractive. 8)
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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby Roccland » Mon 20 Aug 2007, 14:18:09

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('Roccland', '
')Go to the link below for the analysis...looks like the market is in a VERY bad spot...no buyers for our debt so the Fed is trying to intice suckers into buying the 3 month bill by dropping rates.


You don't entice people into buying T-bills by lowering interest rates....that makes them less attractive to investors.

The effect of lowering interest rates on super-safe T-bills is to make other riskier investments (such as stocks or real estate) relatively more attractive. 8)


Read the first four words of that post PA.

BTW market down 80 - 7th day in a row...looks great out there eh PA?
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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby BigTex » Mon 20 Aug 2007, 16:54:38

The overall psychology of the market right now seems to be kind of like a habitual risk taker whose nerves finally begin to deteriorate and he says to himself "if I can just get out of this one, I am going to stop taking so many risks." The way this manifests itself is in too many sellers and too few buyers.

Check the dow in the last few minutes of trading today. Dow begins dropping and volume goes way up. What does that mean? More sellers than buyers.

Tomorrow is a new day, but I think there is a foul mood in the market that is slowly building.
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Re: 3 MONTH T-BILL TANKING!!!!!

Unread postby Geko45 » Mon 20 Aug 2007, 17:17:39

$this->bbcode_second_pass_quote('Plantagenet', 'Y')ou don't entice people into buying T-bills by lowering interest rates....that makes them less attractive to investors. The effect of lowering interest rates on super-safe T-bills is to make other riskier investments (such as stocks or real estate) relatively more attractive. 8)

You are of course correct. Roccland made a small mistake. His chart shows the bond yield, not the rate. The plumeting yield indicates that people are buying T-bills (en masse) and paying top dollar to get them. People are willing to pay this premium to acquire the perceived saftey of government bonds and this is causing the effective rate of return to drop (as the price of the bond rises).

The Fed did drop the rate, but that was intended to motivate people to stay out of bonds and stay in other markets (equities, derivatives, commercial paper, etc.). This chart shows that it is not working. People are taking their money out of riskier investments and putting them in a "sure thing". It is a flight to safety.

The yield has dropped so much that it is now probably on par with inflation, that means the bond will perhaps break even and may even represent a small loss. The fact that people are still willing to buy them shows just how desperate the situation is in other markets. They are willing to take a small loss in bonds versus a big loss somewhere else. Expect tomorrow to be a bad day for the Dow.
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