It has been a wild and woolly week, from the Ford bailout that never was (though it's still closing a few Ford plants) to the Treasury bonds that promise nothing more than negative interest and purchasing fees. Interest rates on six-month Treasury Bills fell to the lowest level on record, 0.27 percent, while four-week Treasury Bills hit and hovered near zero.
Indeed, as one watcher put it, "Things have gotten so bad that investors would rather get nothing than risk further losses." Now that 2 percent offered by Habitat for Humanity looks like a great investment!
Meanwhile, after highs in the $100s, oil tumbled below $40 for first time since the frenzy started in 2004. What a crazy mixed up time.
My take? Those investing in Treasury Bills are doing it as a feel-good measure, akin to donations of metal for previous war efforts. It's not the interest they're after. Indeed, it's knowing there will be government there, when all of this shuffling is over, to not only pay back investors but spearhead hoped-for economic growth.
Meanwhile, while the drop in oil is a direct result of investors falling out of favor with this particular commodity, it's a market shift that could have "who knows what" impact on the automakers who of late have been pushed to make vehicles that don't use oil-made gasoline at all.
Oh, how the world turns.
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| Jennifer D. Meacham, Gather Money Correspondent | ||||
Jennifer's column, "The Bottom Line," is published every week to the Gather Essentials: Money channel. Jennifer is a business and personal finance columnist who regularly covers money matters for RedwoodAge.com, online selling/marketing strategies for Practical Ecommerce magazine, and self-directed real estate investing for RIS Media. She co-authored the best-selling retirement investing guide "IRA Wealth: Revolutionary IRA Strategies for Real Estate Investment" (Square One Publishers, New York). Keep up on the latest news and analysis into how you can take control of your business and personal financial future by joining Jennifer's "Self-Directed Investing 101" network. | ||||
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Comments: 18
i am not worried or scared, but ready to tough things out. I will keep writing my manuscripts, and will submit them when the economy is better, as I feel publishing houses are not likely to publish unknowns during this risky period.
We don't need many new material things, and our kids will just have to accept a smaller Christmas. Long ago, I became used to 'un-addicting' myself of material wants, though I have plenty of clothes, bed and bath, and so on.
People just have to continue to work and pay off the bills, and focus on emotional, spiritual and non-material wants. Eventually, things will get better. 5 - 10 years.
The negative return is not happening at the original sale of the t-bills, but in the secondary market. This is no time to hold a bond fund that invests in treasuries, because most of these funds make their money TRADING, not holding.
The fed is trying to make it cash so unattractive that it compels banks and other investors to move into something else seeking return.
It will bee interesting to see if it works. The reaction of the dollar is an early indicator that it will not, at least not immediately.
We are just now beginning to purchase them again. I just received my $200 bond however it says "Patriot Bond" on it. I do not remember the older ones saying that. It is the same thing?