Yesterday: The Lowest Interest Rates in History

[Alan Grayson]

Last edited Mon Jun 4, 2012, 10:24 AM - Edit history (1)

Yesterday, the 10-year Treasury note hit its lowest interest rate in history. For the third day in a row.

I didn't hear that reported. Did you?

Treasury notes started trading in substantial amounts during World War I, almost 100 years ago. Until Wednesday of this week, the lowest interest rate in history on 10-year notes was 1.672%. That was in February 1946, twelve years before I was born. (That rate re-appeared, for a few brief moments, last September.)

On Tuesday, the rate for 10-year notes closed at 1.73%. On Wednesday, the rate dropped past the all-time low, and kept going, finishing at 1.62%. Thursday set a new all-time low, finishing at 1.58%. On Friday, the rate for 10-year notes finished at 1.47%.

That's a 15% drop. In three days.

The yield on 10-year Treasury notes actually plunged all the way down to 1.44% during Friday trading. That's the new all-time low. Until Monday, at least.

Here are some questions that come to mind:

Why is this happening?

Is this good news or bad news? (Hint to Obama Administration: you can take credit for it.)

Will the trend continue?

What does it mean for the middle class? For mortgages and car loans? For corporate profits? For fiscal policy?

Who gains and who loses?

Unfortunately, there are no answers to any of these questions today, because reaching a 100-year low in interest rates is not considered news.

Here are the headlines yesterday from the Associated Press:

1. The unemployment rate rose from 8.1% to 8.2%.
2. The UN Human Rights Council voted to condemn Syria.
3. There was a large fire in New Mexico (video!).
4. A black bear wandered into a schoolyard (more video!).

Here are the headlines yesterday from ABC News:

1. A teacher slapped a student.
2. A roommate issued a humorous apology for taking someone else's milk from the fridge.
3. "Why Idiot Humans Are Best Cyber Weapon"
4. A new record was set for world's longest Ferris wheel ride.
5. A mother choked a bully.

I hate to be a scold. I really do. But important things are happening. Can someone in the media, or among our so-called leaders, please pay some attention? Please?

You can't lead people anywhere if your eyes are closed.

Courage,

Alan Grayson

[Royal Sloan 09]

1. DU K&R,

Oh say, there's no F' in Way!

Our media dropped the ball to report some latest breaking big thing happenin' somewhere to someone, don't forget the tax cuts for rich added for good measure too.

Do tell, Mr. Grayson!

[Zorro]

2. Perhaps a flight to US bond "quality"

They may look very attractive given the international economic uncertainty looming on the horizon, despite the Republican plan to hold the country hostage over the debt ceiling within the next year.

[JDPriestly]

3. Bad news for seniors with savings in the bank and rising medical costs.

Good news for everybody else.

I talked to a friend this morning. He is a bachelor, in his 70s and without family in our area. He just had heart surgery. His surgery had to be delayed after he checked into the hospital because of other health problems. During his stay in the hospital he couldn't pay his bills. When he got out, he paid them right away but found out that the various companies that he owed had added late charges over the course of his hospital stay.

This should not happen. Companies should not be able to charge late fees on debts accrued during a hospital stay for recovery from heart surgery. There are just times when a person cannot pay his bills when he should. The companies should show some humanity on this.

[Mojorabbit]

4. Yes it is bad for seniors. My mother is watching her income fall year by year.

and yes, the media is becoming worse than useless. I totally agree.

[lumberjack_jeff]

5. Maybe some comments from those who predicted runaway interest rates due to spending.

Right now, there's no penalty for government printing money to get the economy going.

[RainDog]

6. k&r n/t

[bemildred]

7. Yeah, I know, I keep waiting for inflation to take off, and it never does.

Which is pretty interesting in itself. Maybe something else is going on?

[CJCRANE]

8. Even with the bailouts and the stimulus

there is still less cash circulating in the real economy than there was before the crisis, that's why I assume inflation isn't going up.

That's also the argument for why the stimulus needed to be worth $2 trillion to make up for the money that was sucked out of the economy in the crash.

[bemildred]

9. Well, that's true, a lot of the cash is sequestered away in piles somewhere "safe". nt

[Odin2005]

10. The American MSM isn't news, it's "infortainment".

And that is deliberate, ignorant people are more easily controlled.