Investors may not be as jittery as they were when Lehman Brothers Holdings Inc. toppled and American International Group Inc. (NYSE:AIG) flirted with disaster, but they're far from secure about the future in spite of the recent rally in equity markets. Exhibit one: Tuesday's auction of $22 billion in four-week Treasury bills, for which investors were willing to accept the minuscule yield of 0.081% in exchange for the security of knowing they won't lose their money.
Nor does it appear that the federal spending spree is denting demand for T-bills, as the auction was vastly oversubscribed, receiving a whopping $89.66 billion in bids, 4 times the amount Uncle Sam was selling,
according to Dow Jones. Investors willing to pay 99.993778 for U.S. debt may indicate that they aren't coming back into equity and debt markets -- or, on the other hand, it could be panic buying. Yields this low were last seen in December as investors furiously
pulled their money out of markets and looked for anywhere safe to park it. At the time, the Treasury Department sold $30 billion in four-week bills at an auction at a rate of 0% for the first time since the bills began regular sale in 2001, with some investors even willing to take a negative yield to get into the T-bill bunker. -
George White See DJ storySee Dealscape post on T-bills negative yield
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