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Three-Month Treasury At Lowest Yield Since 1954

I typically don't link to stories that are so macro-economic and afield from commercial real estate, but the headline says it all. Wow.

Three-month bill rates may be the lowest since April 1934, when they declined to 0.15 percent, based on monthly figures on the Fed Board of Governors' Web site. Daily figures go back as far as 1954.

Reserve Primary Fund, the oldest U.S. money-market fund, yesterday became the first in 14 years to expose investors to losses after writing off $785 million of debt issued by Lehman.

Shareholders pulled more than 60 percent of the fund's $64.8 billion in assets in the two days since Lehman folded. Losses on the securities firm's debt forced the fund to break the buck, meaning its net asset value fell below the $1 a share price paid by investors.

"The panic going round the money market world is what they've been investing in is not as safe as they thought it would be,'' said Dominic Konstam, the head of interest-rate strategy in New York at Credit Suisse Securities USA LLC, another primary dealer. "If the banks don't want to lend to each other they don't want to lend to the banks. That means where else are they going to put their money -- they're going to put it in T-bills for safety.''

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