This is panic defined.
Headline: Treasury Bills Trade at Negative Rates as Haven Demand Surges.
Story starts: Treasuries rose, pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of U.S. government debt amid the worst financial crisis since the Great Depression. The Treasury sold $27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The U.S. also sold $30 billion of four-week bills today at zero percent for the first time since it began selling the debt in 2001.
People are actually willing to buy Treasury securities at a loss in order to protect their money. Time to buy the market; this is wholesale panic.
If you invested $1 million in three-month bills at today’s negative discount rate of 0.01 percent, for a price of 100.002556, at maturity you would receive the par value for a loss of $25.56.
Investors are willing to pay the US 25 bucks to take their money. 10 year bonds are yielding around 2.67% -- and 340 year bonds are yielding 3.06%; meaning 20 years gets an investor a third of a percentage point. That is skewed. What a time to arbitrage.