Easy money will continue to keep real rates (or the T-bill rate less inflation) negative.
Zivney and Marcus examined what happened to T-bill interest rates as a result of this small, temporary default.
FORBES: The Last Time the United States Defaulted on Treasuries
Whereas it can indeed, risk free, lend out money at the T-Bill rate.
FORBES: Links 2 March: Apple's Patent Damages Award Slashed. But Why?
Institutions are also nervous, as very short-term T-bill rates have spiked, therefore causing the yield curve to flatten out.
The 100-Minus-Your-Age maxim applied when the 10-year T-bill paid out 9% or 10%, like it did in the 1980s.
Thus, the compensation for having to wait for the money should be that T-Bill rate: the available risk free return.
FORBES: Links 2 March: Apple's Patent Damages Award Slashed. But Why?
T-bill rates spiked upwards four times in the months around the default.
FORBES: The Day the United States Defaulted on Treasury Bills
This volatility is the price we pay for returns above T-Bill rates.
FORBES: Understand The Cycle Of Market Emotions To Make Better Investing Decisions
Right now, the yield on the 12-month T-bill is .25% and the rate of consumer inflation as purported by the government is about 1%.
As best as they can tell, T-bill interest rates increased about 60 basis points after the first default and remained elevated for at least several months thereafter.
FORBES: The Last Time the United States Defaulted on Treasuries
The most violent contraction in RGDP occurred during 4Q2008, when the average spread between the 90-day T-bill rate and the IOR rate was the greatest, at -0.83 percentage points.
FORBES: This Economic Recovery Is Surely Different: It's FUBAR*
While the IOR rate has been constant at 0.25% since December 2008, the 90-day T-bill has fallen from an average of 0.14% in November 2010 (when QE2 commenced) to zero today.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
Each security there pays nearly double the benchmark T-bill.
FORBES: Buffett's Latest Commandment: Higher Taxes Won't Stop Smart Investors
Consider: the 10-year Treasury pays about 1.9%, less than half what it paid five years ago. 100-Minus-Your-Age applied when the benchmark T-bill paid out 9% or 10%, like it did in the 1980s.
Indeed, using more sophisticated means, including comparing T-bill rates to interest on commercial paper, the authors conclude that default led to a persistent increase in T-bill rates and, therefore, higher borrowing costs for the federal government.
FORBES: The Day the United States Defaulted on Treasury Bills
With the IOR rate far above the 90-day T-bill rate, banks had no incentive to do anything with the huge volume of newly created reserves other than to sit on them, and sit on them they did.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
This card can be used towards T-Mobile products and services, or a customer's T-Mobile bill.
ENGADGET: T-Mobile offers Sidekick users olive branch, $100 (update: not for everyone)
For example, in the U.S. an app purchase can be put on a T-Mobile bill.
Indeed, except for a few tv loudmouths and self-help salesmen, there's nobody on the list whose day job is to interpret real events. (We dropped a category for public speakers this year--that's why you don't see Bill Clinton--because it's such a static roster.) No matter: Click here to enjoy the names and faces as useful data points of a personality-obsessed era.
If Washington doesn't change course--and the House vote for a monstrous health care bill demonstrates it won't--incumbents, who these days are mostly Democrats, will suffer severely next November.
Dressed in a stars and stripes t-shirt, 62-year-old Bill Higgins, from Fullerton, California, fought back tears as he talked about the impact of the Boston bombings on the international racing community.
That leaves us with the 10 highest salaries that don't fit that bill--a group that includes quarterbacks with mid-to-low passer ratings (Marc Bulger, Eli Manning, Jay Cutler), those who have struggled for regular playing time (Leinart, Bush, former Raiders quarterback JaMarcus Russell and Steelers offensive lineman Max Starks) and those with middling numbers and no Pro Bowl appearances (Raiders defensive lineman Tommy Kelly and Seahawks receiver Deion Branch).
But the Lieberman-Warner bill isn't the only "cap-and-trade" proposal floating around on Capitol Hill these days, so why is it making waves?
And as part of the health care bill -- a lot of people don't know this -- that as part of the health care bill we also have an education bill in there.
Still Lott is against legislation by body parts, not wanting Clinton to achieve by salami slice what he couldn't with the health-care bill.
The Minneapolis-based bank doesn't plan to charge for its new mobile photo bill-payment service.
But Davison says the richest member of the band - who founded Microsoft with Bill Gates in 1975 - doesn't dominate it.
应用推荐