Tuesday, December 09, 2008

When a Loss is an Improvement


From the NY Times:

Investors were so desperate to put their cash into government notes that they were willing to pay a penalty for the privilege: three-month notes traded at a negative yield, meaning that investors will receive about 99 cents on the dollar in return after the note matures. The news sends a sobering signal: in this environment, losing only a small amount of money on an investment is tantamount to coming out ahead.

Four-week Treasury bills, considered one of the safest possible short-term investments, traded at zero percent yields, and investors snapped up $30 billion worth. It was the lowest yield since the Treasury began issuing the notes in 2001.

Oy.


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