Less Thank Zero

The three-month treasury bill got more stupid than keeping your cash in your mattress today, as the yield dropped into negative territory for the first time in history.

So if you bought $1 million worth of three-month bills at today’s negative discount rate of 0.01%, for a price of 100.002556, at maturity you would receive the par value for a loss of $25.56.

That's right, people are paying the U.S. Treasury to keep their money for 3 months. Paying for the pleasure of just getting most of it back in 90 days.

I smell another bubble. It might be time to short treasuries.

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In related news, the credit-default swap rates on U.S. Treasury debt continue to rise. The idea of the United States defaulting on its debt is more than a little bizarre.

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In related news, Ecuador is on the verge of defaulting on $3.9 billion in government bonds. Ecuador's S&P rating is CCC-, the junkiest of junk and just one step above default...