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For The First Time On Record, The US Government Is ‘Riskier’ Than US Banks

Posted By admin On October 8, 2013 @ 10:29 am In Money Watch | Comments Disabled

Zero Hedge [1]
October 8, 2013

During the European crisis, we saw sovereign debt yields rising way above their domestic banking sector’s yields as investors feared systemic crisis and technical flows dominated the price action amid aggressive hedging. Now, with Washington looking increasingly likely to crash upon the shores of a US Treasury technical default, for the first time on record the yield on short-term Treasury-Bills is above the yield on US interbank loans. T-Bill yields (the US government’s “risk”) have surpassed short-term LIBOR (US Banks’ “Risk”)… must be a good reason to BTFATH…

The yield on Treasury Blls (US Government risk) is above that of LIBOR (US bank risk)

For The First Time On Record, The US Government Is Riskier Than US Banks 20131008 invert2 0 [2]

(of course there are many technical issues impacting this spread but the fact that this is the first time on record is critical for investors to recognize that the US equity market’s nonchalance is misplaced)

and the 1m1y inversion continues to invert faster and faster… as our suggested trade [3] pushes further into the money

For The First Time On Record, The US Government Is Riskier Than US Banks 20131008 invert1 0 [4]

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URL to article: http://www.prisonplanet.com/for-the-first-time-on-record-the-us-government-is-riskier-than-us-banks.html

URLs in this post:

[1] Zero Hedge: http://www.zerohedge.com/news/2013-10-08/first-time-record-us-government-riskier-us-banks

[2] Image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/10/20131008_invert2.jpg

[3]  our suggested trade: http://www.zerohedge.com/news/2013-09-26/us-default-risk-spikes-5-month-high-here-how-trade-debt-ceiling-showdown

[4] Image: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/10/20131008_invert1.jpg

[5] Treasury Yields Drop to Record Lows as Recession Concern Rises: http://www.prisonplanet.com/treasury-yields-drop-to-record-lows-as-recession-concern-rises.html

[6] Stressed banks borrow record amount from Fed: http://www.prisonplanet.com/stressed-banks-borrow-record-amount-from-fed.html

[7] Banks borrow record $437.5 billion per day from Fed: http://www.prisonplanet.com/banks-borrow-record-4375-billion-per-day-from-fed.html

[8] The Government Lied When It Said It Only Bailed Out Healthy Banks … 12 of the 13 Big Banks Were Going Bust: http://www.prisonplanet.com/the-government-lied-when-it-said-it-only-bailed-out-healthy-banks-%e2%80%a6-12-of-the-13-big-banks-were-going-bust.html

[9] Central Banks Buying Stocks: http://www.prisonplanet.com/central-banks-buying-stocks.html

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