RECENT POSTS
FAST MONEY FEATURES
FAST MONEY POLLGet in the post game. Respond to our "Question of the Day" right now.
TRADE SCHOOLGrab a pencil because school is in session and the Fast Money traders are teaching class.
FAST MONEY PODCASTSDownload Fast Money onto your MP3 Player.
FAST MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
SHOP FOR FAST MONEY MERCHANDISEGet your game on with Fast Money gear.
FAST MONEY PHOTOS!Check out our scrapbook. These "pix" are guaranteed winners.
NEWSLETTERSign up and receive a recap email every Friday after the show!
FAST MONEY MOBILE ALERTSGet advanced information about the next Fast Money.
Text Size 
 |
Make no mistake. America has become the port of choice in this financial storm. There’s even more evidence suggesting that investors are seeking safe haven in government bonds.
History In The Making
| ||
Earlier in the week, 10- and 30-year T-bill yields reached five-decade lows as investors sought out the relative safety of bonds after getting spooked by another sharp sell-off.
And on Friday shorter term T-bill yields neared zero. (Remember yields move opposite to prices). It goes to show that in an increasingly uncertain world, investors would rather earn next to nothing than take on risk. (The three-month bill yields a microscopic 0.02 percent).
| ||
"It's pretty rational what's occurred," explains Mohamed El-Erian, the chief executive of bond giant Pacific Investment Management Co. or PIMCO. "people are scared and Friday's employment number was pretty scary."
"We're already at (yield) levels we've never seen before. It's just difficult to continue buying Treasuries at these prices," adds Kim Rupert, managing director of global fixed-income analysis at Action Economics in San Francisco.
In fact Kim Rupert’s sentiment is shared by many investors. And that’s left them asking, might bonds might be the biggest bubble of them all?
Treasury Bond Bubble?
"If you draw a line it tells the whole story," says Oppenheimer chief market technician Carter Worth on the Fast Money Final Call. "The sheer steep day after day appreciation of Treasuries is no different than the appreciation in tech stocks in 2000, or a REIT in 2006 or an energy stock just 6 months ago.”
In other words, Worth believes the movement in bonds is every bit a bubble like we saw in those other securities. “At some point gravity comes into play. The overshoot in the bonds, is just that. An overshoot,” he says.
Behind The Moves
There's another side to this story. You’ve probably heard the talk about $25 oil. And you might know that gold [US@GC.1
Loading...
()
] had a terrible run when it really should have gone higher. As far as Worth is concerned that’s a "tell"; a major factor in the flight to safety.
"The panic out of commodities is what’s sparking the panic into Treasuries," Worth tells us.
“The race into Treasuries was also fueled by a growing appreciation that the economy was possibly going into more than a recession and talk that the Fed could start buying Treasuries, adds Mohamed El-Erian.
What’s the bottom line? When the panic subsides, the T-Bill bubble could very well burst.
***********************
Charles Schwab Question of the Day
On a related note, if you're like Carter Worth and cautious of T-bills, what do you think is the better investment?
- Your First Move For Tuesday November 9th
- Web Extra: The Dow's Only Loser
- Pops & Drops: Altria, Potash...
- Tech: The Trade of the Year?
- A Revitalized Credit Card Industry?
- Pure Plays For a Weak US Dollar
- Halftime Report: Retail - The Next Sector to Pop
- BEHIND THE MONEY: 'The Onion' as Trading Indicator
- Web Extra: The Final Trade
- Buying Fear: How to Own Volatility
______________________________________________________
Got something to to say? Send us an e-mail at and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to .
Trader disclosure: On Dec. 3rd, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (AMR) And Is Short (AMR) Calls; Pete Najarian Owns (FCX) And Is Short (FCX) Calls; Pete Najarian Owns (HIG) Calls; Pete Najarian Owns (UYG); Pete Najarian Owns (SBUX) Calls; Karabell Owns (AAPL), (FCX), (GLD), (GOOG), (JPM), (UYG), (DRYS); Seymour Owns (AAPL), (BAC), (F), (MER); Seygem Asset Management Owns (FCX)
GE Is The Parent Company Of CNBC
CNBC.com with wires
Data is a real-time snapshot *Data is delayed at least 15 minutes