T-Bill rates traded to 0% this a.m. Last time that happend, Germany invaded France in 1940.

Something is up?

T-bill rates traded to 0% this morning.

Last time t-bill rates traded at this level was when Germany invaded France in 1940

LIBOR spreads have blown out and banks won’t lend to each other.

The viability of investment banking business model is being questioned……meaning you can’t have an IBANK that needs daily funding…….so people are questioning whether you need a deposit base to run a financial business……since the last two independent IBANKS left (without a deposit base) are Morgan Stanley and Goldman you have:

MS down 38% today

GS down 23% today

AIG has just been sent into a defacto conservatorship and shareholders have lost controll of the company as government takes it over.

Meanwhile a $62B money market fund traded sub $1, meaning that liquidity for money market instruments is drying up as the commercial paper market freezes. This means people could lose liquidity in money market investments. So you guys may want to move significant funds to just a savings account which doesn’t invest in money market say at Schwab or Waterhouse etc….oh and by the way, I wouldn’t have that savings account at any banks which invest in mortgages with leverage (try Schwab, Fidelity or Vanguard for safety)

Make no mistake about it……..this is financial market Armageddon happening as a slow motion train wreck each day.

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One Comment on “T-Bill rates traded to 0% this a.m. Last time that happend, Germany invaded France in 1940.”

  1. highdee Says:

    Something is up?? That something is the age-old greed factor, plain and simple. When you have AIG miscalculating in an attempt to save itself by seeking refuge within the bond market, it becomes quite obvious that this ill-advised decision was driven by nothing more than greed. The mortgage crisis?? Greed again, not just on the part of banks, but by every single individual related to the entire mortgage industry. Greed (with hubris serving in a supporting role) is driving our economy right into the ground. I think the Pope got it right when he recently said that materialism and the love of money are at the root of society’s problems today – and I’m not even Catholic!


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