4 ms·

these will not go negative, this yield was a temporary spasm think about it, who is going to volunteer to lose money on short term govt debt? just leave your m

these will not go negative, this yield was a temporary spasm think about it, who is going to volunteer to lose money on short term govt debt? just leave your money in cash. its not like inflation is going to destroy your cash in 90 days. especially considering that we are entering a deflationary period

micks56 18y ago
I think the people buying these are worried that the cash won't exist in 90 days. If the bank they deposit their cash in goes bankrupt they get nothing. The people buying the T-Bills are well above the $100k FDIC limit. Therefore, by buying the T-Bill, they protect their downside by betting the US government does not go broke in the next 90 days. That would be my guess as to why they want to stash their money away for 90 days. After 3 months the buyer can find out which bank still exists to even take a cash deposit. Cash in the T-Bill and decide what to do. In the meantime, buyers have 3 months to figure out what to do in this market. Its almost like hitting a pause button with your money and giving yourself time to think this out. ps. Not a finance guy here by any means.
- quasimojo 18y ago
  The people buying the T-Bills are well above the $100k FDIC limit dude, it is an utter triviality to spread your money in cash-equivalent 100k increment accounts, brokerages do this all the time. no one takes a loss on treasuries because they have $100k + n in their account. the eight people who upmodded you have simply never had to perform this trivial transaction
  - micks56 18y ago
    Yes, it would be trivial for me to spread a few hundred thousand around a few banks so that I could be within the FDIC limit. What is not trivial is a brokerage spreading around $50MM across 500+ banks. What I was trying to explain is that the people buying the T-Bills aren't individuals looking to put their money some place safe. These are large institutional investors looking to park millions (hundreds of millions?) of dollars in a safe place till they can figure out what to do.

micks56 18y ago

I think the people buying these are worried that the cash won't exist in 90 days. If the bank they deposit their cash in goes bankrupt they get nothing. The people buying the T-Bills are well above the $100k FDIC limit. Therefore, by buying the T-Bill, they protect their downside by betting the US government does not go broke in the next 90 days. That would be my guess as to why they want to stash their money away for 90 days. After 3 months the buyer can find out which bank still exists to even take a cash deposit. Cash in the T-Bill and decide what to do. In the meantime, buyers have 3 months to figure out what to do in this market. Its almost like hitting a pause button with your money and giving yourself time to think this out. ps. Not a finance guy here by any means.

quasimojo 18y ago
The people buying the T-Bills are well above the $100k FDIC limit dude, it is an utter triviality to spread your money in cash-equivalent 100k increment accounts, brokerages do this all the time. no one takes a loss on treasuries because they have $100k + n in their account. the eight people who upmodded you have simply never had to perform this trivial transaction
- micks56 18y ago
  Yes, it would be trivial for me to spread a few hundred thousand around a few banks so that I could be within the FDIC limit. What is not trivial is a brokerage spreading around $50MM across 500+ banks. What I was trying to explain is that the people buying the T-Bills aren't individuals looking to put their money some place safe. These are large institutional investors looking to park millions (hundreds of millions?) of dollars in a safe place till they can figure out what to do.