Treasury Yield Falls to Zero As Investors Seek Safety
Wow, what a headline. All along, the treasury yields were almost zero, but now, it turned slightly down. Common Joe Sixpacks are tired of the volatility, and changing their mutual funds to government funds.
Little did they know, they are actually paying the government money to safeguard the cash... and yet... I know some people who are afraid of FDIC. Talk about irrational behavior.
Six Pack Joe is giving $1 to government, to get back $.99 six months later.
the bottom line is, money is fleeing the market, for now reason, and yet we are holding up fairly well.
When the market settles down and start picking up, around 9500 on the dow as per some of the analysts, it may lead to a strong rally, as six pack joes will be taking their $.99 cents back from US government, and putting it into the market.
Win win for government. Borrow money from people, they are paying you to hold their cash, you (the fed) invests it (TARP/Bailout) into the biggest/strongest US banks, and get paid 8% a year. If they dont pay, the fed seizes the bank.
