Under The Matress Is Good

Zero Yield: The flight to safety achieved a new benchmark as Treasury sold four-week bills at a 0% yield yesterday, and the yield on three-month bills briefly turned negative.

This is certainly a sign of fear gone wild. There is no trust left if institutions are willing to pay the government to hold their cash for them.

Remember, the capital markets are predictive mechanisms. They do not reflect what is happening today but rather the combined forecasts of all the participants.


For contrarians this has to be a good sign.