The move to nearly 0% on the yield of 3-month Treasuries was really the sign that a modern day bank run was occurring. As investors withdrew money from brokerage, money market, savings, and even checking accounts, one of the only other places to go (other than under the mattress) was into short-term Treasuries. As shown in the chart below, the actions by the US government over the last two days have thwarted an extension of this bank run. With the Fed announcing that all money market funds would be insured, investors have gained confidence back in the system, and the yield on short-term Treasuries has spiked higher.
A $10,000 investment in 3-Month Treasuries will now get you $89 per year. That's much better than the $4 we highlighted earlier in the week.
Comrades: All trading will be suspended as it has been found to interfere with daily government intervention. Paulson will announce the value of your investment and house each morning since the government now essentially owns these.
You will find it much cleaner than our current free market system, and more profitable, moving forward.
Posted by: PTDBD | September 19, 2008 at 10:23 AM