As the U.S. Congress and executives continue the pursuit of political one-upmanship, it seems as if nothing else matters in the global finance. European banks, German politics, the Trans-Pacific Trade Agreement, IMF upgrading the British economic outlook … nope nothing going on except in the BOWELS of Washington. The U.S. has the media’s focus but today the Washington drama affected the bond markets in a very serious way. At 10:30 a.m. CST, Treasury auctioned 4-week TREASURY BILLS at 0.35%, the highest since October 2008, as markets are beginning to WORRY about some type of U.S. government default. There was a lack of bidders for the short-term BILLS as bond traders and market makers worry that default fears will make certain debt instruments unacceptable as collateral.
Posts Tagged ‘Treasury bills’
Notes From Underground: Three Negatives Can’t Make A Positive
July 9, 2012Today in Europe the short-term BILL RATES in Germany, Netherlands and France all had NEGATIVE YIELDS. Think about the meaning of this: The hunger for quality sovereign paper has even driven the FRENCH SHORT RATES negative. (ABSURD as Jean-Claude Trichet might opine.) Again, QUANTITATIVE EASING and the FEAR of non-quality collateral has rendered the BOND MARKETS of the DEVELOPED ECONOMIES MEANINGLESS.