The 3-month treasury bill’s yield at the lowest level since Lehman collapsed

The current three-month Treasury bill's yield is at 0.01%, down from 0.05% late Tuesday, see the table below.

Click the image to enlargeSource: Bloomberg
The yield is essentially zero and reaches at the lowest level since September 17, two days after Lehman Bros filling for bankruptcy. While the current TED spread widens to 2.19%, moves inversely to the three-month Treasury bill's yield. Those sign that credit stress is rising again.

Click the image to enlargeChart courtesy of Chartmechanic.com
On September 17, the yield on 3-month U.S. Treasury bills fell to 0.02% amid investors' panicked scramble into the safe haven of ultra short-dated government securities. There was disappointment in the Fed's decision to hold interest rates unchanged on September 16. Banks were just pulling back and not lending and not being able to get the funding they need. The TED spread topped out around 2.1% (Reuters, September 17: here and here).

From WTop.com:

After data showing a contracting service sector and slowing U.S. productivity, Treasury bill yields hovered near zero. Meanwhile, the yield on the two-year Treasury note fell as low as 0.87 percent, the 10-year yield sank as low as 2.65 percent, and the 30-year yield dropped as low as 3.16 percent.

These were the lowest yields for these Treasuries since the government started issuing them, and the lowest yields for assets equivalent to these Treasuries in more than 50 years, according to Global Financial Data in Los Angeles.

Total consumer credit, which doesn't even include mortgages, jumped from about $700 million in 1988 to $1.4 trillion in 1998 to $2.6 trillion this year, according to Federal Reserve data. And over that period of time, the average personal savings rate fell from about 8 percent in the late 1980s to 4 percent in the late 1990s to negative territory by 2005, according to the Bureau of Economic Analysis.

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