November 19, 2009
This is not a good sign. The last time this happened was last year right around the Lehman blow up. The fact that yields are negative on the 3-month bills indicates that investors are staying on the sideline. Which raises the question of why (and how) equities have rallied so much if the money is staying out of the market. The durability of the rally really is questionable. Either there is massive liquidity or massive mystery which brings us back to Meredith Whitney’s interview on CNBC where she seemed to have a hard time grasping what exactly was going on with the markets.
U.S. stocks extended a global drop as concern grew that the rally has outpaced the prospects for economic growth. The yen and the dollar strengthened, oil tumbled and yields on Treasury three-month bills turned negative for the first time since financial markets froze last year.
- Roubini on the Carry Trade
- Bill Gross’s Investment Outlook
- Bill Gross Says U.S. Understates Inflation
- Debt Outlook for UK Turns Negative; US Next?
- China Calling For New Reserve Currency