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$16 Billion 30 Year Auction Prices At 3.954%, 2.77 Bid To Cover, Lowest Primary Dealer Take Down
Today's auction of $16 billion 30 Years closed at a high yield of 3.954% (55.98% allotted at high), and came at a 2.77 Bid To Cover: the lowest since May. The yield was the third lowest in history, higher only than the February and March 2009 auctions (3.54% and 3.640%). Direct Bidders came in at 18.6% - a surprisingly high number, and bigger than the previous auction, yet nowhere near the record 29.6% from March of 2010. What was most surprising was the record low Primary Dealer participation (blue segment in attached chart) - the Fed's lapdogs took down just 35.3% of the auction: the lowest in many years, if not ever. Are the PDs turning their back on the inflation risk associated with holding LT securities, and/or do they think they would be unable to offload these to retail customers? Keep an eye on PD take down in future auctions for further indications on this.
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Don't know why anyone would loan the bankrupt US gov money for 30 years at these rates.
Default Bitchez!
yep, and default=Hyperinflation because the dollar is backed by the full faith and CREDIT of the US government(ECONOMY)
These bitches aint gonna fly
The yield was the third lowest in history, higher only than the February and March 2010 auctions (3.54% and 3.640%).
I think you meant to say "February and March 2009".
16,000,000,000/300,000,000 = $56.52 each.
3.875% interest over 30 years plus principle would be $553.24 each?
Doesn't seem like a good deal to me.
What's important to market action is the PD takedown on the 10-yr, because that's the stealth ca$h for next weeks opex, right? Or is it the 2-yr bills?
Nothing like a pessimistic Fed and a 260 point drop on the DOW to drive the herd back into the arms of their favorite abuser. Oh look, everything is OK. See, the proof is that Uncle Sam can (still) sell their fine quality toilet paper to their hopelessly captured and permantently indentured population of foreign and domestic slaves.
Gee, aren't those equity market drops all too convenient when the strung out govt needs to pimp out more money and their pimp needs to push some more paper?
And 30 year paper to boot. Ain't it grand when you can get the suckers to buy the whole enchilada lock, stock and barrel?
No flight to safety no sell treasury.
DOW and SP500 bearish megaphone wedge charts continue ...
http://stockmarket618.wordpress.com
Already starting to hear grumblings that the bond market is forming a bubble. Even the mass media has started to report on it. We may get a failed treasury auction sooner than anyone expects.
otherwise known as hyperinflation.
So what would happen if we got a failed treasury auction? Please speculate.
You would most likely get that parabolic move in gold that many people on this site expect. Commodities in general would push significantly higher as investors scramble to scoop up whatever inflation proof assets they could. Equities would take an immediate hit, but after the initial thrust lower I think you would probably get a more measured steady decline. Some money may find it's way back into stocks without a clear indication of what to do with it, so that may actually prevent (at least temporarily) continued violent surges downward. In addition to owning gold and other commodities though, may want to consider holding the physical currencies of some other countries. I know people will argue that holding any fiat money is a mistake in this instance, but if you expect say the Euro or maybe the REAL to hold up with money then finding it's way into overseas markets, it will be easier have actual cash on hand that you can exchange on a day-to-day basis for whatever immediate needs you have. Plus, it doesn't take much to house a shoe box full of paper...
Full results here (under 30 year tab)... Indirect bid still relatively strong (for now)
http://www.treasurydirect.gov/RT/RTGateway?page=institHome
Let's say, for the sake of argument, that we have 0% inflation at the moment. If inflation jumps to 3% how much in percentage terms, would a 30 year bond (that matures in 30 years) lose? Can someone do the math?