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| For the first time since Lehman's collapse, Treasury bill rates fell below zero Thursday. They remain negative today... When Lehman collapsed, the negative rates signified a flight to safety. Investors were terrified of the market, and they were willing to lose a fraction of a percent while sitting in cash. Today, the popular trade is long commodities and short the dollar – and it's worked perfectly.
But eventually, the trade has to correct and scare some people out before going back up. So the smart money is taking some money out of their longs – they don't want to unwind their trades completely – and holding it in T-bills. This is a short-term strategy... They want to sit on the sidelines to see what's going to happen. And T-bills are the only option for parking cash right now. If the smart money is right, the next move we'll see is a quick rally in the dollar... | |
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Exactly
