August 21, 2007
TreasuryBills.com
Here’s a chart for people who might be confused by that recent quote from a trader: “Treasury bills right now are trading like dot-coms.” This is what “one way trading” looks like, a mad rush into bills, price be damned. (This is a yield chart for the one month T Bill — it traded as low as 1.25% yesterday, yowza.)
Cat: | Time: 4:29 pm (utc+8)
August 22nd, 2007 at 3:00 am
It has been absolutely amazing the move in short-term treasuries of late. The flight to quality trade is amazing. I expected a move up for short-term treasuries, but not like this. I even pointed out in my recent article that this is the largest rally in short term treasuries since the 1987 market crash.
August 22nd, 2007 at 3:18 am
Would anyone like to take a stab at explaining why German banks in particular seem to be struggling (to put it mildly) in the current environment? It’s not often you see a quote from a bank CEO like this: “If we have a banking crisis in Germany with other countries cutting us off, then other banks will also face difficulties.” - WestLB CEO Alexander Stuhlmann
Should Polish bankers be nervous? :) Or is he referring to other German banks, I wonder?
August 22nd, 2007 at 4:03 am
CM,
Is the decline in Treasury yields due to the fact that investors are now buying them more and thus the yield is decreasing since there is more demand?
August 22nd, 2007 at 4:13 am
one has to wonder how many bankers has john meriwether had meetings with lately?
all i’m implying is that he loves a yield convergence trade - and boy howdy has he got one now!
i would be interested to know how his fund faring these days - and if he’s ok - he’s selling this
August 22nd, 2007 at 7:29 am
@Ollie: The Germans and other Europeans were easy to foist this junk paper on, I guess. You know those gullible German bankers. ;-)
@Amir: Right, yield moves the opposite direction from price so tremendous demand will collapse the yield chart.
@chad: John Who? ;-)
August 22nd, 2007 at 9:23 am
This is people fleeing money market funds right? There were some rumblings that a few of them might be in trouble.
It’s interesting how many people overseas got stuck with mortgage stuff. I guess they didn’t come over here and see how overbuilt and dodgy things got.
August 22nd, 2007 at 9:33 am
Bhh: Yes, and it’s also the money market funds themselves dumping anything non-Treasury and redeploying the proceeds into bills.
The Europeans were probably 1) anxiously reaching for yield, and 2) clueless (didn’t understand what they were buying).
August 22nd, 2007 at 10:40 am
for the lazy cm
August 22nd, 2007 at 10:45 am
groucho: You may have missed the smiley face which followed my “question.”
September 3rd, 2007 at 3:51 pm
[…] The “fright” to quality, in a picture. Cat: […]