One-Month Treasury Bill Is a Blutarsky

Here’s an arresting stat: The latest Treasury auction for one-month T-bills went off at a Blutarsky—0.0%.
In other words, the government can borrow money for free for the next month. For now, this fact helps the spending brigades in Congress. Just about any spending short of burning money or filling the money hole will likely be a cost benefit for taxpayers. However, I don’t see any chance for second stimulus, plus Bernanke came down against it as well. (By the way, Paul Krugman argues that the very fact that the stimulus has failed is precisely why we need another. This is why more professors don’t get elected.)
The zero-rate auction was incredibly popular. The bid-to-cover was 5.33 which is very high. There’s a technical reason why this bill was so popular. It will be the first one to expire in the new year. This means the institutional guys just want a safe place to park their money until 2010 begins.

Posted by on December 8th, 2009 at 11:52 pm


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