In my closing post I noted that T bill rates arein negative territory and gave some reasons for that. Here is an excerpt from David Ader of CRT on that same topic;
“We instead take our cue from activity in the financing markets, where year end is playing its hand – Jan bills are trading negative. The story here is not a new one as we saw bills negative at the end of the last quarter, but exacerbated by a more intense year end. We say that because 1) it’s clearly the talking point on funding desks, 2) EVERYONE has a Dec 31 year end as we have no investment banks any longer, and 3) as bank holding companies there’s a likelihood that former IBs, too, need to show cash in something other than a mattress.”
Another analyst whom I read suggested that an exacerbating factor was the maturity of some cash management bills which were not replaced.
Whatever the case, I am certain that the present circumstance is not an indicator of financial stress as plunging bill rates have been in the past.