It used to be that if you bought a Treasury bill, note or bond directly from the U.S. government on its website TreasuryDirect, that you could also sell that security through a service offered by the Treasury called SellDirect.
Well that is now no longer the case. From the TreasuryDirect website comes this announcement:
What is changing?
The U.S. Department of the Treasury is phasing out the SellDirect program. This program allowed investors to sell marketable securities before maturity through the Federal Reserve Bank of Chicago. As of close of business on December 17, 2010, you will no longer be able to sell unmatured marketable securities using SellDirect.
Why is Treasury discontinuing the SellDirect program?
Recent reviews of program costs indicate the fee falls short of full cost recovery. Because of the need to increase fees, the relatively low volumes sold, and the Presidential Administration’s initiative to cut back or eliminate non-mission critical services, Treasury has decided to end SellDirect as of close of business on December 17, 2010.
Finally, since alternative service providers are available to conduct sales, Public Debt determined the SellDirect service is not critical to offerings in TreasuryDirect or Legacy Treasury Direct.
Additional Note: The original regulations for SellDirect contain a termination option for Treasury to end the service at anytime without prior notice at the discretion of the Department.
How does the change affect me?
If selling an unmatured marketable security is necessary, the security must be transferred to a security account with a brokerage firm or financial institution, where the security may be sold.
So now, if you invest directly through the TreasuryDirect site, you have to jump through additional hoops to get out of your Treasury investment. Do you believe the government’s rationale on why it’s ending this service? Or do you think this has something to do with the endless budget deficits and mounting debts of the government? Do they think interjecting this additional step to make selling more difficult will make investors more likely to leave money in Treasuries, just because of inertia?
While I’m not a traditional website “Product Manager”, I do suspect that if you ran a regular Investment Site this way, you wouldn’t be able to get away with it. Imagine if you opened an E*Trade account – and they told you, “You can buy any stock or bond that you want. But if you want to sell it, you have transfer it to someone else to sell for you.” I would think that the Product Manager at E*Trade that came up with that ludicrous idea would be summarily fired, and assets would flow to other sites that provide the ability to buy AND SELL!
But, of course, we’re talking about the U.S. government here – and they have a monopoly on issuing Treasury bonds and notes, and the Fed has a monopoly on printing money . So I don’t know how much they really care about customer service or providing a good “user experience.”
I can’t wait to hear Tyler Durden at Zerohedge’s take on this….
{ 1 comment… read it below or add one }
Voice of Public and Senior Citizen of United States
Recently I received a letter from Treasury their intention of phasing out the Legacy Treasury System which I use to generate my small retirement income and replacing it with Treasury Direct System. This change is forcing me to use the Treasury Direct System if I want to use treasury securities for my investments. I believe this change is unethical and deceiving the public with false information. Here are some my reasons:
1) There is no formal publication or guide similar to Medicare or SSC to provide detail information about the Treasury Direct System. 2) Instructions given on the website to open the account are not complete or do not exist. There are too many items a person has to consider to access the account. Examples are Restriction on passwords, multiple and variations of security questions, computer system resource requirement, internet service speed and more.3) There is no toll free number to call. The number given is 304 480 7711 to call for Treasury Direct assistant. The people working in the call center do not properly identify themselves; the names of representatives are Peggy, Lori, terry, Pat etc. They do not provide their employee Id or reference number. If they take the call they spend lot of time to ask lot of confidential information from the caller before listening to any question or reason for the call. 80% of time you have to leave a message for the call center to call you back and they never call back. This call center does not resolve the problems, they do not escalate the issue, they are unproductive and waist of cost. 4) To log in the system it is very confusing and difficult. To resolve the login problem you have to call the call center at 304 480 7711 which is 100% time can not be reached at first attempt. 5) The web system can not be used by an average citizen of US. Majority of the US senior citizens can not use this system. The claims about ease of the Treasury Direct System are false and deceptive. It is also fraudulent way of collecting your private information by the Department of Treasury. 6) If you don’t have a new computer you can not invest in the Treasury Security because of unpublished minimum computer system requirements. Person has to acquire services of broker or bank and pay fee for the services to invest in treasury securities. This will become again one more H&R block type operations by insurance or investment companies.
2) Treasury must publish and provide free of charge printed handbook similar to Medicare or Social Security document/guide for public. The online information is incomplete, unreliable and can be changed without any warnings.