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Going Over The Cliff In Money Markets, Bill Rates Plunge 95%

Friday, December 14, 2012 - 7:18 PM
Very short-term Treasury rates have already fallen off their own cliff after the Senate failed to pass a bill that would extend an unlimited guarantee program for certain non-interest-bearing transaction accounts through next year, instead of allowing the program to expire on Dec. 31.

One-month bill rates dropped to 0.003% on Friday — just a hair above zero — from 0.0583% a week ago. OK, the rates are razor-thin anyway, but that’s a 95% drop in one week.

Going over the cliff in money markets, bill rates down 95% - The Tell - MarketWatch
3
ShorebreakShorebreak2,380 posts since
Apr 6, 2010
Rep Points: 12,706
1. Friday, December 14, 2012 - 9:11 PM
Why would any one buy these??  This is what confuses me.  The purpose of purchasing financial products (to me that is) is to make at least 1 or 2% on the money.  Anything lower is really a joke.  I know other countries buy our currancy because theirs may be in trouble but other than the safety factor (at least for now) who buys this stuff at these ridiculous rates?
1
paoli2paoli21,148 posts since
Aug 10, 2011
Rep Points: 5,122
2. Friday, December 14, 2012 - 9:19 PM
"Who buys at these ridiculous rates"  Anyone who is more concerned with return of capital than return on capital (deposits in excess of FDIC insurance). Obviously, there is a lot of money is this category.
3
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
3. Friday, December 14, 2012 - 10:38 PM
"Why would any one buy these?? This is what confuses me."

I'd say a billionaire or corporate entity who wishes to park their money for a brief period, like a day or two. No one special of course. 
1
ShorebreakShorebreak2,380 posts since
Apr 6, 2010
Rep Points: 12,706
4. Saturday, December 15, 2012 - 10:09 AM
Shorebreak:  It must be nice for those billionaires to have enough money to "park".  Anything I have has to keep working for me as much as possible.  I don't think we have too many "parkers" in this group. :)
1
paoli2paoli21,148 posts since
Aug 10, 2011
Rep Points: 5,122
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