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$16 Billion 30 Year Auction Closes At 4.469%
More rotation out of long end paper into near maturities. Soon 100% of US Debt will be maturing every few months. Ugly tail and equities are reacting correspondingly.
- Yields 4.469% vs. Exp. 4.424%
- Bid-To-Cover 2.26 vs. Avg. 2.23 (Prev. 2.54)
- Indirects 44% vs. Avg. 38.3% (Prev. 48.1%)
- Indirect Bid-To-Cover: 1.24
- Directs a staggering 12% of Accepted
- Allotted high 18.01%
2s10s is steeper again: next stop: vertical?
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WTF
White House Aims to Cut Deficit With TARP Cashhttp://online.wsj.com/article/SB125799009185344567.html?mod=rss_Today%27...
Hmmm. Borrow $700b, give $200b back, and POOF! you've got deficit reduction!
I'm going to try that with my home finances! Get me Capital One on the phone!
now it makes sense
LOL didn't they learn from us that shuffling debt around doesn't solve anything. Hmmmm maybe they should get some equity from the White House to pay down some of the debt
"Already, some members of Congress have said they won't approve an increase in the $12.1 trillion debt cap unless efforts to reduce the deficit are included."
Let's see, when was the last time Congress tried to grow some short hairs? Oh yes, back last year when they said "No" the first time the bailout bill came up for a vote.
Suddenly the market starts taking a dive thanks to some disappearing liquidity thanks to the Fed and presto chango, they passed the bill.
Let's see what happens when the powers that be really want the debt ceiling raised and the boys say no. Hell, it's time for a correction anyway, right?
not a good auction. yields are increasing - this is where i await the phantom QE.
I contend the only way yields stay down is to transfer from risk assets. There is far too much global issuance. See nyt (or wsj?) article on Japanese long rates inching up and administration concern.
You're looking pretty smart today. Post-auction feels weird, no?
IG had a meltdown, and then bounced right back in the space of 20 minutes. 10s and up not so much.
People scared of that long end...
ya, post-auction feels really weird. someone just mentioned this to me, actually: "feels like when you get to the top of a roller-coaster, those few seconds of weightlessness, just before the plunge back down..."
A smooth ride at the long end:
http://www.youtube.com/watch?v=Jtkg6lr746M
That's what i want to know, who bought the break of 118?
Shit must taste good, millions of flies can't all be wrong...
Big money pull a million strings
Big money hold the prize
Big money weave a mighty web
Big money draw the flies
-N. Peart
riddle me this
interesting.. post-auction complete rebound.
Verticle 2/10....and heavy heavy short interest in usd...but Bob Pasanti on CNBC said it was so easy to short the usd..lol.
Help with the definitions / differences.
indirects (44%) + directs (12%) = 56%???
Is the indirect a bid number?
The Primary dealers have ended up with a bucketful of bonds! Expect there to be some fun as they move to clear this off their books.
I question how meaningful the bid to cover ratio is - given that 67% of the bids are from PDs, but they "only" got one third of their bid filled, isn't it possible that they put in an offer for $15bn at some stupid level, like 10% yield that they knew would not get filled. Everyone knows the old game of price to miss....
Bingo. They were still standing when the music stopped and all the chairs were filled. If you look at recent auctions, this is what the PDs have been doing - shilling. Except here, to avoid a failed auction, their silly high bids (maybe not 10%, but more like 4.75%) had to be accepted, dragging the yield up. Rare recently that the indirects and directs walk away with the same stash. This could be ominous in terms of debt service on the mounting Everest of debt.
Who is buying this paper? Is the next AIG selling some interest rate derivative?
Dollar sellers.
I'm curious and perhaps one of you who no way more about the bond market than I can answer this: What happens next year when the first of the 30-year T's issued during the last 'Great Recesssion' mature? Weren't those issued during '80,'81,'82,'83 at yeilds close to 15%? Won't that have any bearing on the bond market in 2010? Will the holders of those bonds be eager to roll them over at a paltry 4.5% yield? Just askin'.
No it wont make a difference because the yield would have changed with the comparable benchmark based on its residual maturity. So people who bought it originally would have made a nice capital gain in it.
In my country it makes a slight difference due to taxation laws but dont know about US so wont comment
Just about the worst thing one can buy right now...16b of it sold like hot cakes.