US Short-Term Treasuries Have Negative Yield

[Parsad]

We buy some short-term U.S. t-bills with excess cash, and I just took a look...they are running negative yields from January through to the end of May...this did not occur for so many months even during 2008/2009.  I guess a lot of people piled into them worried about the Fiscal Cliff, and thus you have the markets going up like crazy...investors always do the wrong thing.  Probably exagerrated when combined with the Fed's purchases pushing yields down.  Cheers!

[twacowfca]

That means organizations are selling existing t bills to have cash to buy or pay for something like EOY bonuses.  I don't think this is bearish for stocks.

[Parsad]

That means organizations are selling existing t bills to have cash to buy or pay for something like EOY bonuses.  I don't think this is bearish for stocks.

 

No, I don't think it is bearish for stocks at all.  I think people are pouring money into t-bills instead...contrary indicator.  Although, you could be correct about the bonuses, but that's a hell of alot of bonuses!  Cheers!

[biaggio]

That means organizations are selling existing t bills to have cash to buy or pay for something like EOY bonuses.  I don't think this is bearish for stocks.

 

No, I don't think it is bearish for stocks at all.  I think people are pouring money into t-bills instead...contrary indicator.  Although, you could be correct about the bonuses, but that's a hell of alot of bonuses!  Cheers!

 

I think this is the work of the fed - they want corporations and individuals to spend/invest money to get economy going, keep interest rates low so that we (e.g banks) can inflate/grow their way out of their problems (e.g prevent folks from defaulting on their loans that they can t afford if interest rates were higher)

 

I don t think that people are pouring money into T bills. I can t imagine individuals or small organizations purchasing short term T bill to be paid a few weeks/months later for less (e.g buy for $100 get paid $99.9 a few weeks later). As was explained to me here a while ago- may make sense for large player with billions that want the U.S government to guarantee that they get almost all their money back when they need it later i.e. they don t trust their bank for such a large sum?

 

Don t fight the fed. Bullish for stocks, eventually I hope.

[alpha231616967560]

Seems like there must be a mammoth opportunity in shorting treasuries. Has anyone found a particularly smart way to do that?

[ItsAValueTrap]

If you have a lot of money, you can short treasury bond futures.

 

You can short ETFs like TLT.

 

You can short leveraged treasuries ETFs.  I have some notes on leveraged ETFs here which explains why the borrow is slightly expensive:  http://glennchan.wordpress.com/2012/11/07/leveraged-etfs-a-market-inefficiency/

 

*I am short TLT.

**This thread is about short-term US treasuries... I am assuming you are talking about long-term US treasuries.

 

[alpha231616967560]

IAVT,

 

You are correct. I was thinking long-term. Your blog looks interesting. Just subscribed.

 

Cheers,

alpha23