Government Shut Down

[Lamplighter]

The good news today is that both the Treasury and Moody's
have stated that the US will be be able to fully pay for it's debt, even if the debt ceiling is not raised.

THAT is very good news!

Hooray Adak.
But someone forgot to tell the WSJ and the Treasury Dept yesterday
that the debt ceiling hasn't even been voted on yet, and the US has
not yet defaulted on anything. It's still "Full Faith and Credit of the USA"

Wall Street Journal
10/8/13
Default Worry Hammers Short-Term U.S. Debt
...T-bill Yields Climb to Highest Since October 2008

Short-term U.S. debt prices tumbled again Tuesday amid rising investor concern
about the prospect of a government-debt default, sending the yield
on one-month U.S. Treasury bills to its highest level since the financial crisis.

With little sign that Republicans and Democrats will hammer out
a compromise on the partial government shutdown, many in the
financial markets are starting to worry about the prospect of a default.

Treasury bills maturing on Oct. 31
—a date many market participants predict for the Treasury to run out of cash to pay its bills—
sold off sharply Tuesday, driving their yields up to 0.35%, the highest level since October 2008.

One-Month Treasury Bill Yield



Concern about the stalemate in Washington was also evident in Tuesday's auction of new bills.
The Treasury Department sold $30 billion worth of four-week bills maturing on Nov. 7
at a rate of 0.350%, the highest rate the government paid on such short-dated debt in five years.

Money-market funds and banks are typically the biggest buyers of Treasury bills,
where they park their idle cash for a short time. But they shied away from the auction Tuesday.
The bid-to-cover ratio, a gauge of investor demand, was 2.76,
the lowest since July 2009 for four-week bills, according to Nomura Securities.

That's very GOOD news for investors ... Right, Adak ?
Of course, if you have a loan pegged to the T-Bill rate, not so much.