The interest rate on one-month T-bills went *below zero* on Wednesday

[Newsjock]

This little development didn't seem to get reported by Katie, "Charlie," or Brian, did it.

http://www.reuters.com/article/bondsNews/idUSN2459388620080924?sp=true

Yet on Wednesday, the rush into T-bills sent one-month rates below zero percent overnight and three-month rates below 0.50 percent.

Things were only slightly better today:

http://www.investors.com/editorial/IBDArticles.asp?artsec=31&issue=20080925

The one-month T-bill rate climbed to 0.41% in late trading, up a huge 28 basis points from late Wednesday. Investors were flocking into T-bills and cash earlier this week on anxiety about the struggling financial sector and its toll on credit markets and the economy.

One would think that this would be a somewhat big deal, no?

[liberalmuse]

1. I'm stupid.

What does this mean?

[Ilsa]

2. People are paying to park their money in a safe place. They have

no confidence in the market. They are paying more than face value for the t-bill.

[L. Coyote]

5. Seems like no confidence in banks too. They pay interest.

Until they go bankrupt, that is.

[phusion]

3. Aren't t-bill rates

usually around 3 or 5% ?

[Ilsa]

4. I think it is a big deal, but at this point, almost stating the obvious.

Investors want security over yield. They want a safe place to put their money. I guess this is a "known" by now, but maybe not.

I suppose the fact that it is the one month t-bill versus the three month is a good sign; they hope to place it in an interest-bearing bill in 30 days.